Uncertainty often encourages mutually suspicious governments to fortify or otherwise militarize the disputed region, creating opportunities for armed skirmishes and wider, more lethal confrontations. 3 Settling disputed borders on a mutually acceptable basis removes an important irritant to relations, though it is of course hardly a guarantee of harmonious relations. Border settlement is therefore usually important for providing the security governments require as a precondition to divert a portion of their military expenditures from the task of defending a disputed border to economic and social development, as Peruvian president Alberto Fujimori himself has often noted. Persuaded by their military establishments, governments may spend more to protect their claims to a contested border through arms than to develop the underlying value of the land. Finally, clearly defined jurisdiction over borders is a precondition of international economic discourse and integration.
Disputed borders act as barriers to bilateral and even multilateral economic relations.
Overall, mutually accepted borders are important in providing the certainty necessary for investment and economic growth. The recent dispute between Ecuador and Peru is a sharp reminder of the costs of such festering uncertainty. The following section places this case in historical context, and examines major trends in territorial disputes and their settlement in Latin America.