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Analysis: Peru - From Garcia to Garcia?

By IAN CAMPBELL, UPI Chief Economics Correspondent

BOSTON, Aug. 1 (UPI) -- This is a tale of three presidents, from three different ethnic groups, and a country. Where is the country heading?

"I think the moment has come to extend to Mr. Toledo my congratulations as the victor. He will have in me a loyal collaborator."

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The person speaking June 3, 2001 was Alan Garcia, Peru's president from 1985 to 1990. He had just lost in the second round of Peru's presidential election. Two-thirds of the vote had been counted and they pointed to a narrow victory for Alejandro Toledo. The final election count gave Toledo victory by 52.5 percent of the vote to 47.5 percent.

The tall, good-looking Garcia, a representative of a left-wing party but a product of Peru's elite of European descent, could afford to be magnanimous.

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He is the first of our three presidents, the youngest of them -- still only in his early 50s -- and the first to be in office, in 1985, when he was in his mid-30s.

His narrow defeat in the presidential election last year was a success, a huge step in his rehabilitation. His term in office was widely judged by Peruvians and outsiders to have been a disaster. He left office with inflation in the thousands and with the Sendero Luminoso (Shining Path) terrorist group on the rampage, a threat to the very survival of the Peruvian state.

Peruvians could not wait for Garcia to be gone. His successor as president, Alberto Fujimori, put out an arrest warrant for him. For 10 years, Garcia remained in exile. Now, the charges against him dropped, he is back in Peru and, a year into Toledo's term, is the politician who commands most popular support.

These days, it is the second of our presidents who is pursued by the law. In the early 1990s, Fujimori was popular, hailed as the country's savior. He stamped out inflation and the Sendero Luminoso with equal rigor and got the economy going.

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But his stamping went on, too wide and too far. He closed the Congress and formed another to help crush the discredited traditional political parties. He intimidated the press. He twisted the constitution to open the way to a third consecutive presidential term. He stamped on democracy and also honesty, meddling more and more in the economy for personal gain.

Then, when the evidence against his utterly disreputable sidekick, Vladimiro Montesinos, became irrefutable, he left on a presidential trip for Japan, where his parents were born, and did not return. He will only do so if obliged to.

Toledo is the third of our presidents, the man who dared to challenge Fujimori in 2000 and 2001 -- and that did take courage -- and who therefore could lay some claim to deserving his victory a year ago. That Toledo was a scion of Peru's indigenous population, in the majority yet little represented politically, was encouraging.

He was also an economist with World Bank experience. The combination looked promising, yet there were also, even in the campaigning days, stories of drug-taking and womanizing, of uncertain veracity, but which created fears that Toledo, the brave challenger, might not prove the ideal president.

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So it has proven. Toledo, in the words of Martin Pickering, a Peru-watcher at the Economist Intelligence Unit in London, has been "appallingly organized, unable to govern, directionless."

Attempts to push ahead with privatization in the largely indigenous south of Peru, near Arequipa, where Toledo had previously had strong support, have proven catastrophic. Toledo failed to appreciate the strength of opposition to plans to privatize electricity plants.

His government did not explain its policy. The local population snapped, rioting in June and provoking a cabinet reshuffle July 11 in which Toledo sacrificed his main proponents of economic reform, the unpopular finance minister, Pedro Pablo Kuczynski, and his prime minister, Roberto Danino.

Pickering's view is that Toledo is already a lame duck. In regional and municipal elections scheduled for November, Pickering expects Toledo's "Peru Posible" party to be hammered -- and Garcia's "Alianza Popular Revolucionaria Americana" to do well. Garcia, smooth and skilled at the political game, if not at running the economy, looks as though he may again be president, perhaps before Toledo's term is scheduled to end.

Just like Fujimori and Toledo before him, Garcia's possible return would reflect the vacuum his predecessor has left. Peru is a country where leadership has departed.

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Here, more perhaps than anywhere else in Latin America, divisions of race and class have widened. The gulf between the country's small elite and its majority is huge. And the small elite is itself bitterly divided. In Peru, there have been few loyal collaborators.

Only a president of great skill would be able to bring Peru back together. Toledo, it seems clear, is not that man. Could Garcia be? Judged on past performance, the idea seems ludicrous. Yet it is not impossible that he has learned. The question then would be if Peru has.


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