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Peru Foreign Relations Under Fujimori
Fujimori set out to repair Peru's foreign relations,
particularly with its creditors. He campaigned on, and was
committed to, a strategy of "reinsertion" into the
international
financial community. This commitment forced him to change
his
adherence to "gradualist" economics and to open dialogue
with the
major multilateral institutions.
Peru's foreign relations situation changed dramatically
with
the April 5 self-coup. The international community's
reaction was
appropriately negative. Most international financial
organizations delayed planned or projected loans, and the
United
States government suspended all aid other than
humanitarian
assistance. Germany and Spain also suspended aid to Peru.
Venezuela broke off diplomatic relations, and Argentina
withdrew
its ambassador. The coup threatened the entire economic
recovery
strategy of reinsertion. In addition, the withdrawal of
aid by
key members of Peru's support group made the process of
clearing
arrears with the IMF virtually impossible. Yet, despite
international condemnation, Fujimori refused to rescind
the
suspension of constitutional government, and the armed
forces
reasserted their support for the measures.
Even before the coup, relations with the United States
were
strained, because they were dominated by the drug issue
and
Fujimori's reluctance to sign an accord that would
increase
United States and Peruvian military efforts in eradicating
coca
fields. Although Fujimori eventually signed the accord in
May
1991 in order to get desperately needed aid, the
disagreements
did little to enhance bilateral relations. The Peruvians
saw
drugs as primarily a United States problem, and the least
of
their concerns, given the economic crisis, the SL, and the
outbreak of cholera.
The cholera outbreak at first resulted in neighboring
countries' banning Peruvian food imports, further
straining
relations. Even after the ban was lifted for certain
products,
fear of the spread of cholera was confirmed by cases
reported in
Colombia, Ecuador, Chile, and Brazil.
By the early 1990s, economic trends in Latin America
were
moving increasingly toward free-trade agreements with the
United
States and regional market integration, such as the
Southern Cone Common Market
(Mercado Común del Sur--
Mercosur; see Glossary).
Although the Andean Pact agreed to form a common market in
late
1990, Peru's role, owing to the extent and nature of its
crisis,
remained marginal, at least in the short term. Fujimori
was so
overwhelmed with domestic problems early into his
government,
moreover, that he was unable to attend the
Group of Eight (see Glossary)
meeting in late 1990.
Although Peru could have been eligible for special
drugrelated assistance and trade arrangements with the United
States
under the Andean Initiative, Peruvian-United States
relations
were hardly smooth on the drug front during Fujimori's
first year
in office. Peru's eligibility for debt reduction and
grants for
investment-related reforms under the George H.W. Bush
administration's
Enterprise for the Americas Initiative (see Glossary),
meanwhile, were restricted by its arrears with
multilateral credit agencies and private banks.
On the debt front, relations with international
institutions were improving, and after six months of negotiations, Peru
was able to obtain the US$800-million bridge loan required to
re-establish its borrowing eligibility from the IMF. Yet,
Peru still had to pay US$600 million to international creditors. It
seemed that for the foreseeable future, any credit inflows would
merely be recycled to pay existing debts and arrears
(see Foreign Trade and the Balance of Payments
, ch. 3). Prior to the coup of
April 5, 1992, however, almost all of the US$1.3 billion
necessary to clear arrears with the IMF had been attained.
Peru had established a strong military relationship
with the
Soviets and Eastern Europe during the Velasco years, and
was the
Soviets' largest military client on the continent in the
1970s.
Owing to a reliance on Soviet military equipment, this
relationship has continued, although Peru has diversified
its
source of supply of weapons to countries ranging from
France to
North Korea
(see Changing Foreign Military Missions and Impacts
, ch. 5).
In addition, like its relationship with Cuba,
Peru's
relationship with the Soviets is certain to diminish in
importance as both countries turn inward to deal with
domestic
crises and economic rather than strategic issues dominate
the
agenda. Reflecting this change is a new importance placed
on
relations with the United States and also with Japan,
largely
because of Fujimori's heritage and the emphasis that he
himself
placed on the Japanese role during the electoral campaign.
More
than anything else, Peru's foreign relations were expected
to be
dominated by the nation's need for foreign aid, capital,
and
credit, all of which hinged on the republic's solving its
internal economic problems, cooperating with the United
States on
the drug issue, and dealing with the challenge from
insurgent
groups. Additionally, most of the international community
remained unwilling to provide credit or aid until
democratic
government was restored.
* * *
David Scott Palmer's Peru: The Authoritarian
Tradition
offers a good overview of Peruvian political development
through
the early 1980s. The most comprehensive treatment of the
development of Peru's state sector and public policy
framework is
Rosemary Thorp and Geoffrey Bertram's Peru
1890-1977.
Cynthia McClintock and Abraham F. Lowenthal's edited
collection
of essays, The Peruvian Experiment Reconsidered, is
a
balanced description of the military years and covers a
wide
range of political and economic issues. Peru's transition
to
democracy is detailed in Stephen M. Gorman's PostRevolutionary Peru. Carol Graham's Peru's APRA
is the
first single-volume description of the García government
and APRA
in power. Hernando de Soto's detailed description of the
Peruvian
informal sector and regulatory framework, The Other
Path,
sparked an extensive debate on the role of the informal
sector
and its relation to the state in Latin America. A good
article on
Fujimori's self-coup is Eduardo Ferrero Costa's "Peru's
Presidential Coup." On the challenges to the political
system
posed by the human rights situation, see Angela Cornell
and
Kenneth Roberts's "Democracy, Counterinsurgency, and Human
Rights." (For further information and complete citations,
see
Bibliography.)
Data as of September 1992
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