Negotiation between Ecuador and Peru to end the border conflict in 1998

    
A Personal Account by Jamil Mahuad, Former President of Ecuador 
    
A fifty-year boundary dispute between Ecuador and Peru ended through the successful negotiation between Jamil Mahuad, president of Ecuador (1998–2000), and Alberto Fujimori, president of Peru (1990–2000).
President Mahuad has taken two negotiation courses at Harvard University—one several years ago with Roger and a seminar more recently with Roger and Dan that explicitly articulated the core concerns framework. During our seminar, President Mahuad realized the extent to which he intuitively had used the core concerns to help resolve the Peru–Ecuador border dispute. We invited him to contribute this chapter to share with readers his creative use of those concerns. 

I took office as president of Ecuador on August 10, 1998, after serving six years as mayor of Quito, my country’s capital.
The main motivation for entering the presidential race was to alleviate poverty and to reduce inequality in my Nevada-sized Andean country of 12 million people. My political strategy was to replicate at a national level the successful formula that I had used while mayor of Quito’s 1.2 million people. My formula was: “Promise attainable projects, deliver on my promises, and stay close to the people.” While I was mayor, Fortune magazine considered Quito one of the ten Latin American cities that greatly improved the quality of life of its citizens.
As I took office, however, the Ecuadorian economy was spiraling into— arguably—its worst economic crisis of the twentieth century.
Simultaneously, political, military, and diplomatic experts foresaw an imminent and perhaps unavoidable new armed conflict with Peru.

THE PERFECT STORM

If you have read The Perfect Storm or have seen the movie based on the book, you’ll have the right mind-set to understand Ecuador’s situation in 1998 and 1999. The film depicts how, in October 1991, the unique combination of three immense meteorological events produced a storm stronger than any in recorded history. A hurricane from the Caribbean and two fronts from Canada and the Great Lakes converged and fed each other in the Atlantic. The storm trapped a small fishing boat from Gloucester, Massachusetts, and doomed its entire crew.
Here’s where the analogy comes through. In 1998–1999, Ecuador was suffering from the once-in-a-century combined effects of: 

- The coastal destruction left by El Niño floods (the largest in five hundred years) 

- Record low-level oil prices (oil then accounted for around half of the Ecuadorian exports and the government’s revenue) 

- The Asian economic crisis (the first global economic crisis) 

These factors came on top of a fiscal deficit of 7 percent of the GDP; the final puffings of a crashing financial system; and a physically destroyed and paralyzed private sector. The inflation rate was 48 percent and the debt to GDP ratio was more than 70 percent—both the highest in Latin America.
Consequently, international creditors—mistrusting Ecuador’s capacity for servicing its debt—were demanding full repayment of loans at maturity and closing their lines of credit.
This economic meltdown demanded immediate attention. My top shortterm priorities were to reduce the fiscal deficit and consequently decrease the inflation rate; to reconstruct the Pacific coastal area of the country recently devastated by the flood; and to restore the country’s credit worthiness through a program with the International Monetary Fund that would get new financing for my social programs, mainly health and education.
Nevertheless, an unexpected twist in the international front forced me to change priorities and work first to avoid a war with Peru. I considered this situation to be my first and most important responsibility morally, ethically, and economically. An international war would have escalated our already critical situation into a desperate one. How could Ecuador face an international war with the economy already in shambles? I needed a definitive peace accord with Peru in order to reduce the military budget, to dedicate our scarce resources to invest in social infrastructure, and to focus our attention and energies on growth and development.

THE CURRENT SITUATION 

The long, tough, disappointing history of armed conflict with Peru represented for Ecuadorians a painful wound. Ecuadorians felt abused, stripped of their legitimate territories by the force of a powerful neighbor supported by the international community.
Here was the scenario the moment I took office: 

- “The oldest armed conflict in the Western Hemisphere.”

The United States State Department called the Ecuador–Peru border dispute the “oldest armed conflict in the Western Hemisphere.” Its roots can be traced back at least to the discovery of the Amazon River in 1542 by the Spanish conquistador Francisco de Orellana or, even before that, to the 1532 precolonial Indian war for the control of the Inca Empire between the Quiteño Atahualpa (now Ecuador) and the Cusqueño Huascar (now Peru).

- The largest land dispute in Latin America. 

The territory historically claimed by both Ecuador and Peru was bigger than France. It constituted the largest disputed territory in Latin America and one of the largest in the world.

- Numerous attempts to resolve the conflict had failed. 

Since the early nineteenth century attempts to reach a solution consistently failed. The countries had tried war, direct conversation, and amicable intervention by third parties, mediation, and first-class arbiters including the King of Spain and President Franklin Roosevelt. None yielded a positive result.
The last period of this conflict started in 1942. After an international war between Ecuador and Peru in mid-1941 and following the Japanese attack on Pearl Harbor in December 1941, the United States pressed Ecuador and Peru to end definitively their land dispute. In 1942 in Rio de Janeiro, the two countries signed a treaty called the Protocol of Peace, Friendship and Limits. Known in short as the Rio Protocol, this treaty was guaranteed by Argentina, Brazil, Chile, and the United States.
The Rio Protocol established that part of the boundary between Ecuador and Peru would be a watershed (a ridge of high ground) between the Santiago and Zamora rivers. It turned out, however, that between these two rivers there was not a single watershed, but a third river, the Cenepa. As a result, out of a 1500 kilometer-long block of land marked frontier, approximately 78 kilometers remained an “open wound.”
Armed conflict erupted in 1981 and again in 1995, but did not settle the issue. On the contrary, more bitterness and mutual mistrust developed. This zone was epitomized by the outpost of Tiwintza, a small area of land where soldiers from both countries had been killed and buried. Tiwintza became a heroic symbol to each country.
The post-1995 negotiation process had advanced important agreements regarding future joint projects, mutual security, trust, commerce, and navigational rights over some tributaries of the Amazon. Nonetheless, all this progress was contingent on a final agreement over Tiwintza.
As an almost final effort to overcome entrenched positions, Ecuador and Peru asked a special commission for a nonmandatory but morally important opinion (a Parecer) on the issue. The special commission was known as a Juridical–Technical International Commission and included representatives of Argentina, Brazil, and the United States. The opinion of the commission was released a few weeks before I was elected president. It expressed the view that Tiwintza was part of the sovereign territory of Peru. That opinion, contrary to the situation on the ground where Ecuadorian troops had been for decades, stirred up escalating hostility between the two countries.
By the time I took office, the troops from Ecuador and Peru had occupied the previously agreed upon demilitarized zone. They faced one another so closely that, in some places, they could shake hands and say Buenos días before raising their rifles. The Ecuadorian military command briefed me that a Peruvian invasion starting a few hours after my inauguration was a likely scenario. Peru would most likely provoke not a localized but a generalized armed conflict. The magnitude of this risk was perceived only by the most informed echelon of society. The rest of the country was immersed in their struggle to survive the economic difficulties and was distracted temporarily by the new president’s inauguration.

THE CHALLENGE: AGAINST ALL ODDS

Upon stepping into office, pursuing peace with Peru would require: 

- Belief. 

There would have to be the popular belief that the war could be resolved. Myths are almost impossible to debunk; the intractability of the problem with Peru had deep roots in Ecuadorians’ flesh and souls.

- Civic participation. 

Making peace between Ecuador and Peru would have to be a “people’s project,” not a government issue. There would need to be a boost in participation of the people represented by any legitimate organization or group.

- Trust. 

Cooperation and mutual trust would need to be elicited from all sectors in this fragmented country.

- Political support. 

A formula for peace would need to be created. It would have to be acceptable for both countries and for many different sectors in each country.

- Economic stability. 

There would need to be ways to bring economic stability to a country on the verge of war. In such a moment of distress, how could the government go about dictating badly needed, but unpopular, economic adjustments that would compromise the national unity and governability of Ecuador? 

- A clear, coherent, comprehensive action plan. 

The resulting plan would need to be not only military but also economic, political, and international in scope.

PREPARING FOR PEACE 

Since the purpose of this chapter is showing the core concerns in action, I’ll focus my attention on the negotiation strategy of the border conflict and some interactions with my colleague, President Alberto Fujimori of Peru, while ignoring the complications of the economic situation in Ecuador.
I needed a talented governmental cabinet to carry out peace efforts. Dr Jose Ayala, allegedly the most respected Ecuadorian diplomat, had been minister of foreign affairs and had conducted peace negotiations. I asked him to remain in his role. General Jose Gallardo had been minister of defense during the most recent armed conflict in 1995; that conflict had ended with an Ecuadorian military victory. I appointed General Gallardo to be minister of defense. In short, I appointed the chancellor of peace and the general of war as members of my cabinet. This was done to send a clear signal: Although Ecuador was openly inclined to a peaceful solution, we were ready to defend ourselves fiercely if necessary.
Chancellor Ayala informed me of the general perception that nearly every contentious issue had been agreed upon by the two diplomatic delegations. The remaining point, the territorial dispute of the zone symbolized by Tiwintza, was something that only the presidents themselves could decide. It required a final stage of diplomacy at the highest level —“Presidential Diplomacy” as the press labeled it.
I phoned Professor Roger Fisher at his Harvard Law School office and invited him to come to Quito and join the Ecuadorian government team to analyze the current situation, brainstorm possible approaches, and prepare a negotiation strategy.
When Roger arrived in Quito, we worked on various fronts simultaneously. We carefully reviewed with the ministers of defense and foreign affairs the up-to-date military and diplomatic facts. To get everybody on the same page, Roger offered, for the benefit of some cabinet and staff members connected with the negotiation, a half-day presentation of his classic Seven Elements of Negotiation and some useful techniques for their application.
Due to the current tensions, a personal meeting of the two presidents was most unlikely to occur. However, in preparation for an eventual encounter with President Fujimori, Roger and I examined ways to start a personal working relationship.
The first two or three days in any new job can be hectic. A presidential office is no exception. Our meetings were frequently interrupted by urgent events. We had some of our sessions at odd times and places. I remember slipping Roger into my office between two scheduled appointments and meeting him in the dining room of my residence in the palace after eleven at night.

KEY ELEMENTS IN BUILDING EMOTIONAL RAPPORT 

In a negotiation process, the relationship among the negotiators is as important as the substance of the negotiation. My first strategic decision was to build upon the existing working relationship already established between the two national negotiation teams. My nondelegable, crucially important mission was to build personal rapport with President Fujimori, a man I had not met. It was a challenge to figure out how I would do that.
In my third day in office, I received an unexpected call from President Cardoso of Brazil. He invited me to a personal meeting with President Fujimori in Asuncion del Paraguay, where all three of us were scheduled to be thirty-six hours later for the inauguration of President Cubas.
Two facts were clear to me. I badly needed that first encounter. And I was not yet ready to tackle the substance of the problem. How could I communicate the seriousness of my intentions to President Fujimori without giving him the impression that I was just buying time and procrastinating? 

Appreciation: Show Your Understanding of His Merits and Difficulties 

Our team agreed to make it clear to President Fujimori that I appreciated his years of involvement in the boundary problem and the knowledge he must have derived from that experience. That assessment of President Fujimori’s situation would have been plainly true for any dispassionate observer. I expected that such initial recognition would help us find an emotional common ground to serve as a basis for future conversations. My preparation with Roger started like this: 

ROGER: What is the purpose of your first meeting with President Fujimori? 

JAMIL: I see two purposes. I want to get to know him and his vision about the current situation. And I want to get his commitment that we are going to exhaust dialogue before stepping into war. For these purposes, I would like to listen first and ask him questions.

ROGER: Great purposes. But if you go after him with a lot of questions, he may feel as if the FBI is interrogating him. He’s likely to clam up. An easier and perhaps wiser approach would be to have President Fujimori come to feel that he knows you. Be open. Start by laying some of your cards on the table. 

That was precisely what I did. Using stories, historical examples, and anecdotes, I explained to President Fujimori how I understood the difficult situation he was facing. I asked for his reciprocal understanding of the extremely complex scenario I was acting on. He responded well, although cautiously. In a soft, tranquil voice, he stated, “My three goals when I started my presidency were to eliminate hyperinflation, to dismember the Shining Path guerrillas, and to finish the border issue with Ecuador. I have accomplished the first two already. The third one must be concluded as well.”
That gave me the opportunity to express frankly my admiration for his work on both of the first two issues, which was universally applauded, while adopting a wait-and-see attitude about the third.

Affiliation: Find Some Common Ground 

A major task was to change the widespread perception of the bad relationship between the two countries. This task was faced by President Fujimori and myself, as well as by our staff and officials, the media, and the public at large. For years, each country had regarded the other as an enemy.
President Fujimori and I agreed that a goal should be to have the public in each country come to see that we were working together, side by side, toward the settlement of the centuries-old boundary conflict.
Since “one picture is worth a thousand words,” Roger suggested that I arrange for a photograph to be taken of the two presidents. I said that would not be a problem. The media would be present before and after our meeting.
Rather than a picture of us shaking hands or standing next to each other, however, Roger wanted us to be sitting, side by side, each with a pen or pencil in his hand, both looking at a map or a pad on which there might be some kind of draft proposal. We would not be looking at the camera or at each other but rather working. Such a photograph might help convince third parties, the media, and the public that things had started to change for the better. The photograph would make clear that the presidents were in a collaborative effort, tackling the boundary problem together.
When I returned from Paraguay, I showed Roger a newspaper with a front-page photograph of the two presidents working together (image shown below). 
I told Roger that I knew the photograph was intended to influence the public. What surprised me was the extent to which the photograph also influenced President Fujimori and me. Looking at the photograph, President Fujimori said that the public in each country would now be expecting us to settle the boundary. We had publicly undertaken that task, and we owed it to the people in each country to succeed.

Status: “I’ll Recognize His Seniority” 

President Fujimori and I met for the first time in Asuncion. We were in the presidential suite kindly offered by the Argentinean President Carlos Menem as a neutral territory. At that time, President Fujimori had been president of Peru for eight years and I had been president of Ecuador for four days.
“You can make a first impression only once,” I reminded myself.
“Stating the evident will not harm my position. Contrarily, it will convey the image of an open, objective person,” I thought. “I’ll recognize his seniority, a personal matter where there’s no debate, and I will not accept his substantive proposals about delicate matters where there’s a hot debate.”
I said, “President Fujimori, you’ve been president for eight years. I’ve been a president for four days. You have negotiated with four of my predecessors. I would like us to benefit from your extensive experience.” I asked him, “Do you have ideas on how we might deal with this border dispute in a way that would meet the interests of both Peru and Ecuador?”



This photograph on the front page of an Ecuador newspaper helped change the political climate in 1998 by showing presidents Mahuad of Ecuador and Fujimori of Peru working together side by side. 

I recognized his seniority with courteous gestures, which were reciprocated by him. For example, I always made sure he entered rooms first as the senior president. In this way, I acknowledged and respected his seniority, a particular status of President Fujimori. I also acknowledged my own particular status as president and as a connoisseur of the Ecuadorian reality.
To recognize areas where President Fujimori held high status did not imply that I was agreeing with him or with his position. Contrarily, when combined with showing appreciation, honoring his status gave me room to manifest my openly discrepant standings without endangering the relationship.

Autonomy: Do Not Tell Others 

What to Do Autonomy is a core concern for human beings, particularly sensitive for figures like politicians who are in positions of authority. For many years, Ecuador and Peru refused to negotiate with one another, each fearing that they would be seen as “giving in” to the other’s demands. No politician likes to be seen as a puppet of anybody else, especially when each one is on a different side of a centuries-old conflict.
It would be dangerous for a president to do something that would make our constituents suspicious or otherwise put us in a difficult position in our own country.
In all our meetings, I was very conscientious to respect his autonomy and to ensure my own. It would have been deadly wrong, for example, to try to tell President Fujimori what to do. Rather I asked for his perceptions and reactions on how we two presidents might best settle this protracted and costly boundary dispute.
My personal respect for him did not imply that I was agreeing with him or with his demand. “I simply cannot ask Congress and the people to give in to the demands of Peru. I’m not going to do it. Were I to do it, Congress would never agree; nor would any Ecuadorian. That’s a dead-end road.
What are your alternative ideas on how we might move forward toward a peaceful agreement?”
I asked President Fujimori to appreciate the fact that the Ecuadorian president, Congress, and people would never concede to this Peruvian claim. Our autonomy would be crushed.

Role: “Us” Means “Us” for Both Sides 

Negotiators play multiple, simultaneous, sometimes contradictory, overlapping, or complementary roles. In an effort to settle this longstanding boundary dispute, each president would have a crucial job. Each would have the task of bringing his own constituents to accept a settlement of the boundary. I saw my role as leading two simultaneous negotiations. One role, obviously, was as negotiator with President Fujimori. The other role, not so obvious but equally important, was my role as a negotiator with the people of Ecuador, its institutions, and representative organizations.
I recognized that President Fujimori had the same two roles and faced the same tasks. Therefore, I proposed to him we not do anything to harm each other’s legitimacy as authorized representatives of our peoples. For instance, it would have been self-defeating to claim that a treaty was good for Ecuador because it was bad for Peru—or vice versa.
On the contrary, I saw that the role of each president was to demonstrate that an agreement was good for both countries, good for the region, good for trade, good for economic development, and good for the alleviation of poverty. We needed a win-win proposition. In crafting that proposition, our roles were both stressful and full of personal meaning.
Too often in international affairs, the goal is seen as obtaining a commitment from the other side. The media keep asking: “Who backed down?” “Who gave in?” “Did you reach an agreement?” “No? So the negotiations failed?” They want to see us playing the role of the victorious hero defeating a deceitful enemy. But “us” means “us” for both sides. In a negotiation, the most useful and powerful outcome may be an emotional commitment to continue working together in order to implement a peace agreement after signing it. Working together did not suggest that either of us gave up our liberty, our discretion, or our autonomy.
Rather, we transformed a problem into an opportunity. That required a new conception of the roles we played: a shift from opponents to colleagues, from positional bargainers in a merely distributional zero-sum game to joint problem solvers inventing new options to increase the size of the pie and the scope of possible outcomes.

Core Concerns as a Bundle 

At some moments, the situation called for intertwining different core concerns and reinforcing them at different levels. One particularly challenging circumstance stands out. The nonbinding opinion (Parecer) of the international experts gave a big push to Peru’s claim to Tiwintza. It would have been impossible, however, for any Ecuadorian president to yield to the claim without losing legitimacy, demeaning his presidential status, betraying his role, and risking his people’s appreciation and affiliation. I wanted to recognize the strength and merits of the Peruvian case, and at the same time to get appreciation for the Ecuadorian situation, my autonomy, and my role.
My sensitivity to these core concerns helped me navigate this difficult terrain. “President Fujimori,” I said, “Peru has a strong claim to the disputed area. Because of the commission’s Parecer, it may, in fact, be stronger than Ecuador’s claim (appreciating Peru’s point). If I were president of Peru, I’d have no other option than to seek to get every square meter of that land (appreciating merit in Peru’s perspective).
Yet, as president of Ecuador, I cannot agree to give Peru territory that every president and every Congress since Ecuador was born has insisted is part of Ecuador. (I was asking him to reciprocate by appreciating my situation and understanding my difficulties.) We are convinced that we have the moral and legal rights over the area in dispute, and we’re not going to change that conviction because of a nonbinding technical opinion (Parecer). One hundred more opinions like that one wouldn’t be sufficient to change our centuries-old feelings of ownership over those territories. (As a country, we have our autonomy.) Hence, any president of Ecuador should say and do what I’m saying and doing. (Asking for his reciprocal affiliation.) Now, in our role as presidents, we can undertake our new mission, which is to find a formula acceptable for the peoples in both countries.” (I was searching for an additional common ground of affiliation in fairness and justice.) This dialogue had the noticeable effect of committing us both to a joint problem-solving approach. Our predominantly rational, carefully prepared, goal-oriented initial steps were additionally fueled by the rapport built rapidly between us and among our delegations. Peace became a flashing beacon, a powerful magnetic force taking up most of our time and energy during my first seventy-seven days in office.

THE AGREEMENT 

We kept the people of Ecuador permanently informed about the advance of our negotiation. As progress was evident, a virtuous circle replaced the old vicious one. Negotiation became popular and openly a part of our national objectives. Participation increased. Everybody wanted to be part of the process and to express their voices. Common goals enhanced trust. Political actors started giving support because they understood gains were larger than risks if they represented the now popular will for peace. Belief in a negotiated solution replaced the usual pessimism. Overwhelming support at all levels of society boosted the government’s initial action plan. Although this peace process did not stabilize the economy, the menace of war no longer worsened the economic situation.
On October 26, 1998, in Brasilia, ten weeks after our first meeting,
President Fujimori and I signed a final, comprehensive peace treaty that was ratified by the Congress of each country. The two countries agreed that the entire disputed boundary area would become an international conservation park in which there would be no economic or military activities except as the two governments might later agree.
Tiwintza itself required special treatment. We two presidents agreed that if the representatives of the four countries that were helping us could concur on a recommendation for Tiwintza, we would commit ourselves to accept it.
Congresses of both countries voted to give the representatives authority to arbitrate.
A creative agreement for Tiwintza was formulated. The representatives separated sovereignty rights from property rights over Tiwintza. Thus, the land is now within the sovereign territory of Peru. And one square kilometer of land around Tiwintza, just inside Peru and adjoining Ecuador, is now private property owned in perpetuity by the government of Ecuador (just as Ecuador might own some land in Lima, Peru). Neither country “gave up”
Tiwintza. The government of Peru can say, “Tiwintza is part of our sovereign territory.” The government of Ecuador can say, “We own Tiwintza forever.”

A FINAL REFLECTION 

I agree with Roger and Dan that negotiators often assume that the best way to negotiate is purely rational. To be sure, strong hostile emotions easily escalate and cause problems. Yet, more importantly, in my experience, emotions can be helpful. When going into negotiations, I was ready to take the initiative and act upon each of the core concerns—on appreciation, affiliation, autonomy, status, and role. In doing so, President Fujimori and I established good rapport, a strong working relationship, and a stable agreement.
The Ecuador-Peru negotiations of 1998 were in themselves a complete success. The boundary was settled and has remained so. Not a single border military incident has been reported since that time. Binational trade and cooperation have reached historical records, and peace has been praised, valued, and owned by governments and citizens alike on both sides of the border.
My major reason for wanting to establish peace between Ecuador and Peru was to give both countries the benefits that only peace could bring.
Additionally, establishing peace with Peru would enable Ecuador to reduce its military budget. Those resources could then be devoted to programs to alleviate poverty. And that is what my administration did after the treaty was signed in 1998.
In January 2000, a military-backed coup forced me out of office for reasons too complicated to go into in this document. This fate is one I share with many Latin American presidents.
That is part of the official side of the story. On the personal side,
Alberto Fujimori and I gradually developed a personal friendship beyond the call of our duties.
In March 2004, over a cup of coffee in Tokyo’s Royal Park Hotel, we reflected on the lessons we learned. Alberto said, “Peace is consolidated.
Everybody respects it.” In the beginning, few of us believed that peace was possible. Now it was owned by everybody.
Alberto and I remembered a conversation we had in Brazil during the peace process. After a press conference, I had told him: “Things are changing. The situation used to be pretty clear: Ecuadorian journalists on one side, Peruvian journalists on the other. Now they’re mixed together. That’s a good omen for the future.”
Alberto had said, “Yesterday, while reading an article in a Lima newspaper, I felt as if you and I were on the pro-peace side, facing together some opposition to peace in both countries.” I nodded in agreement.
Since the beginning, we had worked together to satisfy our core concerns for affiliation, appreciation, and autonomy. Our status was respected. And our roles were fulfilling. We had created an atmosphere to advance substantive content. As almost always happens, process and substance walked hand in hand.