GRANMA
May 8, 2003

Peru
Disillusionment

BY MARIA VICTORIA VALDÉS-RODDA
Granma International staff writer

JUST like the overwhelming majority of Latin American peoples,
Peruvians have pinned all their hopes for improvement on the periodic
cycles of electing new leaders. Two years ago they believed that
400,000 new jobs would be created, that there would be fewer
privatizations, and an unquestionable transparency of government.

But after repeated negative experiences of a political discourse
inconsistent with its own postulations, after two years with Alejandro
Toledo as president, 72.4% of Peruvians disapprove of his form of
governing, as revealed by a survey by the Irma and marketing studies
company.

On July 27, 2001 the president affirmed: "I promise to govern for the
95% of the population who have always been excluded." This phrase,
added to his platform of programs entitled A Possible Peru, won adepts
and the necessary votes to conquer Lima.

Shortly after however, he ordered the privatization of the Egasa and
Egesur electricity companies in Arequipa. According to experts, this
was his first error. This attitude, considered by many to be flirting
with the International Monetary Fund (IMF) and the World Bank (WB), has
literally placed this area on a war footing, with popular protests,
militarization and curfews. Faced with the imperative of reducing the
fiscal deficit and cleaning up finances, Toledo's government
transferred a state asset into foreign hands.

The fight to do so was a difficult one, given that Arequipa' s mayor
and the Frente Amplio opposed the sale, unsuccessfully, even though
they put up fierce resistance. But in spite of everything Toledo did
not come out a winner as his initial popularity plummeted within 11
months of taking power.

Two different polls - IMA marketing studies and the CPI - revealed that
70% of those consulted disagreed with the measure; those who approved
barely reached 24%. Unfulfilled promises and job shortages figure among
the main causes of disillusionment.

OTHER PROMISES

In December 2002, Toledo promised WB president James Wolfensohn that he
would clean up finances by any possible means. That assertion even gave
the international agency food for thought, on recalling the need to
reduce Peru's current poverty level (54.8%) by 27.4%.

But the prospect of the above-mentioned turn-around in relation to the
poverty of close to 25 million inhabitants is the delay of such a
reduction to the distant date of 2015 - when presumably Toledo will
have passed into the controversial annals of regional history.

Present day austerity measures have been concentrated in key sectors
such as education, agriculture and public services, with negative
repercussions for employment and to the detriment of life in general.

Reviewing the country's data, in absolute terms it could be said that
Peru registered a 5.2% growth in 2002, according to the IMF one of the
best rates in the world. In the same way, that agency predicts a 4.0%
growth this year, and this is the argument that the executive is
wielding in its favor.

NEW UNFAVORABLE PUBLIC OPINION POLLS

In one of its economic analyses, the Alternative On-line Press Service
(SERPAL) warns of the dangers of the neoliberal "Toledian" strategy and
especially its adoption of IMF guidelines.

The same source states that Peru designates the equivalent of 30% of
its exports to paying off the interest on its foreign debt - valued at
$30 billion USD.

On the other hand, Toledo has now been linked to alleged pressure
brought to bear on a major television channel (Panamerican) which,
according to ANSA, has revived old stories of corruption. Reuters
revealed that discrediting elements of the president's measures include
an accusation by a journalist that the leader's relatives and members
of the governing Peru Posible party have been favored with posts in
Peruvian embassies and consulates abroad."

So much so that, at the behest of Peru daily El Comercio, on April 12
the consultancy firm "Apoyo, Opinión y Mercado (Support, Opinion and
the Market) observed that "the serious problem of Toledo's personal and
political image is reflected in the adverse opinion that citizens have
of the head of state as a credible, respectable, austere, hardworking,
honest, etc. person."

A survey taken in 15 of the country's largest cities, including the
capital, showed that 79% believe Toledo has no credibility; 67% regard
him as irresponsible; 65% consider him to be dishonest; and the same
percentage believe that he lacks leadership qualities, while 71% are
convinced he is unsure of himself. Poverty and hunger (71%),
unemployment (61%) and corruption (23%) are among the other problems
that people consider that the government has not solved.

On May 5, Peruvian officials and businesspeople demonstrated their
concern over a possible fall in private investment due to the result of
a further erosion of stability at the highest national level.

Javier Silva, minister of economy and finance, confirmed that "while
private investment in Peru has increased over the past few months,
there are difficulties that could generate an adverse climate."

Thus Leopoldo Sheelje, president of the National Federation of Private
Business Institutions (CONFIEP), affirmed that political turbulence
could endanger the pace of investments. "The image of the country's
stability is being impaired by so much scandal," he emphasized.