Peru: Recovery from Crisis

Publication Date: April 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

Type:

Coverage: Peru

Abstract:

Peru survived constitutional and political crises in 1999 and 2000 and now faces the challenges of further strengthening democratic institutions and stimulating the economy. President Alejandro Toledo assumed office on July 28, 2001. He won extraordinary elections that had to be organized following the sudden resignation in November 2000 of President Alberto Fujimori in the wake of electoral, human rights, and corruption scandals.

President Fujimori headed Peru from 1990 to 2000. During that time he did much to bring under control destabilizing factors such as terrorism, drug trafficking, hyperinflation, and border disputes. But Fujimori also led the country into constitutional crises, and his efforts to remain in power eroded democratic institutions. Allegations of electoral fraud and an eruption of scandals involving his top aide led to his sudden resignation, after which constitutional succession passed the presidency to the President of the Congress, Valentin Paniagua, in November 2000.

The immediate challenge facing the interim government was to organize new presidential and parliamentary elections. First and second round elections on April 8 and June 3 were widely praised as being free and fair, and Alejandro Toledo was elected President. The Toledo administration faces the more long-term challenge of maintaining stability while trying to strengthen democratic institutions weakened by 10 years of a democratically elected, but autocratically run, government.

Peru is located along the Andean mountains of South America. Although economic conditions have improved over the last five years, there is still extensive poverty in Peru. Peru has a free market economy.

The United States and Peru have enjoyed generally friendly relations over the past decade, although the recurring political crises of the Fujimori government strained those relations. The primary U.S. interest in Peru has been the reduction of illicit narcotics production and trafficking. Other stated goals of U.S. assistance are: broader citizen participation and more responsive government; increased incomes for Peru's poor; improved health of high risk populations; and improved environmental conditions. The United States pressed the Fujimori government to improve respect for human rights; for much of his term Fujimori's regime had one of the worst human rights record in the hemisphere. Both the interim and the Toledo governments have taken steps to improve respect for human rights. The United States has been concerned about security in Peru and in the Andean region as a whole.

The U.S. Congress has expressed concern about the development of democratic institutions in Peru, and has conditioned aid on the respect for those institutions, and for human rights, and the holding of free and fair elections. Congress has also expressed concern about the case of Lori Berenson, an American prisoner in Peru; the relationship between U.S. agencies and Peru's spy chief, Vladimiro Montesinos; and whether to resume a joint aerial drug-interdiction program that was suspended after the accidental shooting of an American missionary plane.