- The Washington Times - Sunday, July 29, 2001

Reporters have called his election "a real-life fairy tale in the making." But when Peruvian President-elect Alejandro Toledo is inaugurated on July 28, he'll face a real-life battle to restore the public's trust in government.

First, voters viewed him as the best of two weak choices. And second, his elected predecessor, Alberto Fujimori, helped discredit politicians in general by trampling the country's democratic institutions to prop up his own dictatorial presidency.

Mr. Toledo also will have to revive an economy plagued by flat growth and declining investment one that has been weakened by Peru's uncertain political climate, its arbitrary application of business laws, and a judiciary more interested in repaying political favors than in meting out justice.

And he assumes control of a military that besides being an institution accustomed to getting its own way has been tarnished by arms- and drug-trafficking scandals that link senior Peruvian officers to Colombian drug lords.

Moreover, Mr. Toledo will have to work with the Bush administration to institute more coherent working relations with Peru. Although the United States wisely supported President Fujimori as he tamed the country's 7,000 percent inflation rate and applauded his defeat of the Sendero Luminoso and Tupac Amaru guerrillas, it did little more than gasp when he dissolved the congress and turned the courts into political puppets.

The Clinton administration also acquiesced to seeking government access through unaccountable go-betweens, such as Mr. Fujimori's nefarious intelligence chief, Vladimir Montesinos. And after working with Peru to develop an effective drug-interdiction program, it relegated cooperation on joint interdiction missions to questionably supervised contractors. The result: A mixup that led to a light plane being shot down earlier this year, killing a U.S. missionary's family.

Considering the difficulties Peru now faces, it's time the United States did better.

So far, the Bush administration seems willing. Its Andean Regional Initiative promises to better coordinate counter-narcotics assistance toward the entire troubled Andean region, from Colombia to Bolivia. But beyond this broad gesture, some clear objectives are needed.

In Peru's case, U.S. policy should have three goals: bolstering democracy, reviving the economy, and rebuilding a broken security relationship.

Peru's congress has appointed a commission to suggest constitutional reforms that would undo some of the damage inflicted by Mr. Fujimori. That's a start, but at a time when Peruvian lawmakers are receptive, the Bush administration should offer expertise on separating government powers to help restore needed checks and balances and encourage existing homegrown efforts to strengthen governing authority in Peru's provinces and municipalities. To the extent that Peru can develop independent national powers and more robust local government, it will better weather the occasional crises that inevitably strike the presidency.

Economic growth in Peru is nearly flat; half of its residents live below the poverty line. The United States should encourage further development of free markets to provide the growth and prosperity needed to support Peru's fragile democracy. Although the renewal of the Andean Trade Preferences Act is already being contemplated in Congress, the United States could offer additional trade incentives tied to reforms such as making it easier to start a small company, and ensuring the courts treat businesses more fairly and less politically.

U.S.-Peruvian security ties were shaken by a long-time reliance on access through manipulators such as Montesinos and complacent supervision of U.S.-Peruvian cooperation on drug interdiction. A broader relationship with all government entities will help, but U.S. military and intelligence officials also should encourage local efforts to modernize the armed forces and subordinate them to the civilian elected leadership.

Finally, the United States needs a coordinated regional drug interdiction program where responsibilities are better defined.

In hindsight, it's clear that our previous policy toward Peru was expedient.

While we benefited from the economic stability and substantial cooperation on counter narcotics Mr. Fujimori's government provided, the foundations of Peru's democracy were slowly rotting. Now the United States has a chance to encourage the reconstruction of Peru's political institutions, help revitalize its economy and help it regain momentum in the fight against narcotics.

Mr. Toledo may not have governing experience, but so far he advocates the virtues of democracy and free-market economics. This quality will be quite valuable in the months ahead. With Colombia under siege by rebels and drug traffickers, neighboring Ecuador's government in disarray, and an unpredictable leftist consolidating power in Venezuela, Peru remains critical to any effort to repair the region's deteriorating political stability, its faltering economies, and its shaky defenses against international crime. But Mr. Toledo and Mr. Bush must act soon.

Stephen Johnson is a Latin America policy analyst in the Davis Institute for International Studies at the Heritage Foundation.

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