August 14, 2001

August 14, 2001 | News Releases on Foreign Aid and Development

U.S. Should Help Peru During Its Time of Transition, Analyst Says

WASHINGTON, Aug. 14, 2001-Peru has a new president and congress, which makes this an ideal time for the United States to help a potentially valuable ally effect democratic change, says a new paper from The Heritage Foundation.

Peru stands at a crossroads, says Stephen Johnson, policy analyst for Latin America in Heritage's Davis Institute for International Studies. It can adopt policies that lead to free markets and prosperity, that guide the military to its proper role in civil society and reject the corruption of the Fujimori administration. Or it can struggle as its president-political neophyte Alejandro Toledo Manrique-learns his job, and court increased poverty, drug trafficking, migration, conflict and instability.

The United States, says Johnson, can help Peru help itself by encouraging Toledo and his government to strengthen democratic institutions, implement the kind of free-market reforms that have made Chile the economic success story of the region and make the military less corrupt and more professional.

Toledo faces a difficult task, Johnson says. Not only were checks and balances compromised under Fujimori and his secretive security chief, Vladimiro Montesinos-now jailed on corruption charges-but his administration left behind a chain of compromised politicians, businessmen and military officers.

Interim president Valentin Paniagua's call for a new constitution makes sense, Johnson says, if Peru is willing to reduce the strength of an overly powerful presidency. Peru has had 12 constitutions, all modeled on French or Spanish originals, which go beyond framing the general responsibilities of government to dictating specific laws and business regulations.

"Peru shouldn't necessarily model its constitution on ours," Johnson says. "But we should be willing to share our experiences and perspectives to aid Peru's quest to develop a simpler, more durable document that better defines the relationship between government and citizens and makes civil liberties a priority."

The United States should press Peru-where the poverty rate is 49 percent-to resist borrowing from international institutions such as the World Bank, where Toledo once worked, Johnson says. Instead, it should encourage Peru to revive dormant programs to title unregistered property and streamline procedures for obtaining business licenses, among other free-market reforms, Johnson says. The U.S. Congress can help by renewing the Andean Trade Preferences Act, which will expire at the end of this year.

"President Bush has made relations with Latin America a top priority," Johnson says. "But that must entail more than counter-narcotics measures. If we can encourage democratic habits, bolster free-market economics and build closer professional ties, we can help Peru attract capital, maintain peace, and fulfill its potential as a hub of stability in the region."

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