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PERU: PRESIDENT ALEJANDRO MARKS FIRST ANNIVERSARY.

As Peruvian President Alejandro Toledo completed his first year in office on July 28, he indicated that it was time to start over. Toledo finished making changes in his Cabinet, part of the "relaunching" of his government, and gave his first State of the Nation address. While he referred to "self-criticism," analysts said they saw little to indicate that the president has made any fundamental changes in his leadership style.

In a nationally televised address, Toledo listed what he considered the achievements of his administration and referred to the errors that contributed to the high level of dissatisfaction with his presidency. He said he had learned some important lessons.

"We are convinced that the moment has arrived to incorporate humility and self-criticism to our political culture in Peru," he said in the two-hour speech on the 181st anniversary of the nation's independence. "The major self- criticism of my administration is that it has not been able to reconcile the country or lower social expectations. For that, we assume our due amount of responsibility."

Toledo said his government erred in not communicating quickly and efficiently enough to the population the difficult situation that he inherited, which was, he said, "a legacy of the mafia," referring to the administration of former President Alberto Fujimori (1990-2000).

Toledo reaffirmed his commitment to reactivate the economy and rebuild the country's democracy while asking the people to have patience and remain optimistic.

Toledo promulgated two laws, one designed to resolve the problem of the 20,000 state workers fired during the Fujimori administration who have demanded their jobs back in frequent demonstrations. The other creates the Consejo Nacional de la Juventud, a youth initiative.

Toledo also pledged to make the state the major partner of national small and medium-sized producers and to favor Peruvian products over imports.

"Analysts in the region concur that Peru is the only country in Latin America that is growing," said Toledo. "This analysis is stimulating, particularly given the complex global and regional economic panorama."

He acknowledged, however, that he faces a "titanic task" of helping the 23% of Peruvians "who live in extreme poverty" and survive on the equivalent of about US$0.43 a day.

Toledo promised housing subsidies and educational programs to ensure that economic growth reaches the poor.

He avoided some touchy issues, including whether he would continue with the privatizations that triggered deadly protests in June (see NotiSur, 2002-06-21). Nor did he mention the paternity scandal involving a 14-year-old girl, Zarai Orosco, who claims she is his daughter. Toledo has refused a court-ordered DNA test to determine paternity.

In closing, Toledo called on Peru's often fractious political parties to work together in Congress. Leading the opposition is former President Alan Garcia (1985-1990), head of the Alianza Popular Revolucionaria Americana (APRA).

Garcia last week declared Toledo's honeymoon over and demanded an economic policy change--one that creates jobs and ends the sale of state assets. The Apristas, capitalizing on Toledo's unpopularity, are expected to sweep municipal and regional elections in November.

Toledo finishes Cabinet shuffle

Toledo finished the reorganization of his Cabinet on July 27 by naming Deputy Fausto Alvarado as the new minister of justice, replacing Fernando Olivera. Both the outgoing and new minister belong to the Frente Independiente Moralizador (FIM), which is allied with the government.

On July 20, Ricardo Vega Llona, who headed Peru's privatization agency ProInversion, resigned because of disagreements with the way the administration is promoting investment. Vega Llona had submitted his resignation in June, but Toledo asked him to stay on (see NotiSur, 2002-07-19).

The privatization process was supposed to bring in US$800 million this year, but after the June rioting that put privatization plans on hold, the goal has been reduced to between US$500 and US$550 million.

Critics question Toledo's commitment to change

Analysts consider that Toledo's message had very little self-criticism, making it unlikely that the speech will contribute to improving his image.

Ernesto de la Jara, director of the Instituto de Defensa Legal (IDL), said Toledo's words were contradictory and the only self-criticism was that he failed to communicate adequately the sins of Fujimori. This was followed by a lengthy description of his achievements, ending with another litany of offers for future programs.

"I had the impression that he did the opposite of what everyone advised him to do," said de la Jara. "Everyone had advised him that in the first place he should be very self- critical, that he should express a willingness to rectify those errors." Instead, Toledo was a little "triumphalistic."

"Democracy with difficulties and with many problems is being repaired," said Arequipa mayor Juan Manuel Guillen. "That is the positive tally" of Toledo's first year. "The negative part is that conditions for instability and ungovernability persist. I think that is an enormous risk for the future of the country."

Guillen played a key role in the protests in June against the privatization of two regional electricity companies.

Toledo must "regain what he lost in his first year: credibility and respect," said political analyst Augusto Alvarez Rodrich. "He has to say something that will enable people to believe him."

The government's latest strategy will promote job- creating public-works projects while trying to stimulate private investment. But with the privatization program stalled after the Arequipa riots, the government will have do all that on a tight budget.

Toledo faces increasing problems in second year

Toledo is running out of time to come up with more than promises. As poverty increases and jobs do not, frustration is bound to increase.

The state Instituto Nacional de Estadistica e Informatica (INEI) says that, in the last four years, poverty among Peru's 26.7 million people has increased from 42.7% to 48.4%, while other state estimates put the poverty level at 56%.

Peruvians consider poverty and the lack of jobs the most serious problems in the country, especially upsetting given the expected economic growth of between 3.5% and 4% for the year--the highest in the region.

The International Labor Organization (ILO) said recently that unemployment in Peru has increased by 1.8% since the beginning of the year, minimum salaries have decreased by 1.5%, and the informal economy now accounts for 50% of the economically active population (EAP).

Private-organization estimates in 1999 put the average family income at US$1,200 a year, placing Peru among the countries with the lowest income levels in the world.

Peru also has a high level of child labor. Studies indicate that at least eight of every 100 workers in Peru are children between the ages of six and 14.

All these factors add up to a bleak future for most Peruvians and add to their frustration with the Toledo government. In a survey in June by the Universidad de Lima, 74.3% of respondents said they disapproved of the current administration.

Luis Benavente, who directed the survey, said the increased poverty "is going to intensify the social and labor discontent, which adds up to a very serious crisis in the country, which in turn will add to the lack of confidence in the government."

While support for the president is at rock bottom in Peru, the US government has emphasized its support for the Toledo administration and said that with democracy also comes problems, which are normal in all countries.

"There is a tendency to underestimate President Toledo, but as long as there are successes, the bad image that he might have does not concern us," said Otto Reich, assistant secretary of state for Western Hemisphere affairs. [Sources: CNN, 07/20/02, 07/26/02; Spanish news service EFE, 07/23/02, 07/27/02, 07/28/02; Associated Press, 07/25/02, 07/28/02; Notimex, 07/27/02, 07/28/02; Clarin (Argentina), The Miami Herald, 07/28/02]
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Title Annotation:Alejandro Toledo
Publication:NotiSur - South American Political and Economic Affairs
Geographic Code:3PERU
Date:Aug 2, 2002
Words:1303
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