Peru's Plight

`DESPERATION is our only hope.'' Those are the ironic words of a Peruvian official surveying the wreckage of his nation's economic, political, and social structures. Nothing short of desperation, he was saying, will release the commitment and steam required to tackle the country's enormous problems. Any one of those problems would tax the competence and resources of a government. In combination, they produce the resigned, even despairing tones that creep into the voices of authorities discussing Peru's plight.

Its inflation rate has been rising more steeply than the Andes. The nation's productive energies are dampened by deficit spending and blankets of bureaucracy. Like many of its Latin American neighbors, Peru owes billions to foreign lenders, but, unlike more conscientious borrowers, Peru's economic and debt-service policies have almost been calculated to alienate the international financial community.

As the world's leading grower of coca leaf, Peru is engaged in an ongoing war with cocaine traffickers. At the same time, Lima is battling terrorism by two communist groups, the brutal Sendero Luminoso (Shining Path) and the smaller Tupac Amaru Revolutionary Movement; the counterinsurgency efforts have given rise in turn to widespread human rights abuses by the military. Terrorism and political violence claimed 3,384 lives last year.

This is the disaster, as he put it, that President Alberto Fujimori inherited when he took office last summer. And as if the other problems weren't enough, the country has also been swept by a cholera epidemic. The economic problems are the legacies of years of mismanagement. Rebuffing the traditional parties, exasperated voters turned to the independent Fujimori, an obscure engineer.

It is not clear yet that Fujimori has either the experience or the political backing to pull Peru back from the brink. His anti-inflation measures, called Fujishock, have thrown Peru into recession. His programs to liberalize trade conditions, reduce the size of government, and privatize some state industries appear to be on the right track, however.

Fujimori properly has given high priority to improving relations with the international financial community, which were strained under his predecessor. US Treasury Secretary Nicholas Brady should do what he can to mediate on Peru's behalf with the international lenders and to help restore Peru's place as a debtor in good standing with appropriate access to international credit.

One US expert in Latin American affairs proposes that Peru's neighbors, together with the US, should take on Peru as a special regional reclamation project, as the Contadora countries joined several years ago to help bring peace to Nicaragua. The rationale, he points out, is the same: Problems like those plaguing Peru are not forever contained within a country's borders. National problems can become regional problems, unless neighbors pitch in.

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