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Peru's Blighted Path

THE talk in Peru these days is of the biblical plagues. For a decade, South America's third-largest country has been coping of economic crises and natural disasters that threaten the viability of its democratic system and civil society. This February brought cholera, a disease not seen in Latin America for a century. The epidemic has struck 130,00 people and claimed nearly 1,000 lives. And it is but one of the many crises ``plaguing'' the country. Peru's problems range from the cholera epidemic, to combating the most ruthless guerrilla movement on the Latin continent (the Shining Path), to an economy ravaged by hyperinflation and recession. Blackouts, car bombs, assassinations, kidnapping, and criminal assaults are daily occurrences in Lima. The culprits are two major guerrilla groups, paramilitary squads, and even the police, who are poorly paid and equipped.

Meeting basic food costs is a challenge to all but the wealthiest Peruvians. Much of what is affordable - water and fish, for example - is inedible due to the cholera. What is edible is unaffordable. Last week a 10-ounce bottle of Coca-Cola cost $1.60; a meager lunch for three in a local cafe costs $50. The monthly minimum wage in Lima is $19.75, an income standard much of Peru's population does not even meet.

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The onset of ``plagues'' coincided with Peru's transition to democracy in 1980, when Shining Path launched its armed activity: an attack on a voting station in the Andean town of Chuschi. The group, whose reverence for Mao's cultural revolution, respect for ancient agrarian techniques, and violent attacks on the peasantry liken it to Cambodia's Khmer Rouge, grew steadily for the several years, and now has control over some parts of the country.

Three years after the appearance of Shining Path, the army launched a vicious counterinsurgency campaign. One general said, ``If 10 peasants die for every three terrorists caught, then so be it.'' Some 20,000 people - in a population of 21 million - have died in the war between guerrillas and the military. The majority of victims are civilians. While Shining Path's brutality is unprecedented, the military have been given a free hand in combating them. For the past two years, Peru has had the highest num ber of disappearances in the world. Not one military officer has been tried and sentenced.

The 1985 election of Alan Garcia and his APRA party brought five years of the most corrupt government the country has ever known. The APRA left its successors a bankrupt, bloated, patronage-ridden state. Underemployment is 75 percent. Lima has service facilities for 3 million people; the city has a population of 7 million. Electricity and water shortages are the norm. Infant mortality is 20 deaths per 1,000 births in neighboring Chile, and 48 per 1,000 in Colombia. In Peru it's 90 per 1,000.

The current Fujimori government, elected in June 1990, had no choice but to implement a severe austerity program to stabilize inflation and provide the government with resources. State workers had not been paid in the last two months of the Garcia government. Also necessary was the removal of a whole network of inefficient subsidies in which, for example, a liter of Coca-Cola cost 10 times as much as a liter of gasoline. On Aug. 8, the price of gas was raised by 3,000 percent; other commodities rose 500 percent. The price shocks raised the number of people below the poverty line from 7 million to 12 million. Only 9 percent of Lima's population is now fully employed.

Peru also has a reputation as Latin America's worst debtor, due to Garcia's nonpayment policy. This precludes eligibility for resources from multinational donors and discourages foreign investment. Fujimori committed himself to repairing Peru's relations with its foreign creditors. Yet even if a proposed $800 million bridge loan from friendly countries to the International Monetary Fund (IMF) is realized, the resulting resources will be recycled to creditors.

In addition are revenue losses from the cholera epidemic, which has caused other countries to ban Peru's fish and produce. An estimated $13 million was lost in exports in February. Potential tourist revenue will drop by $8 million for 1991. Thousands of street vendors and restaurants face a dramatic drop in sales. Cholera is a poor man's plague. Most poor peoplelack health care.

Unfortunately, US policy threatens to exacerbate Peru's problems. The Bush administration made $94.9 million in desperately needed Andean Initiative aid contingent on the military's becoming more active in coca eradication. Coca growing employs several hundred thousand peasants in the Upper Huallaga Valley, where Shining Path has a large following. It acts as a protector of sorts for peasants - forcing drug traffickers to pay a ``correct'' price for the crop. A crackdown on coca in an underemployed coun try will play into the hands of Shining Path, particularly if US ``imperialism'' can be blamed. Unlike the US, Peruvians believe defeating Shining Path is a higher priority than combating a drug trade fueled by US demand.

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The solution to Peru's ``plagues'' is not US aid. Help must begin at home. The current government's commitment to a realistic economic strategy - increasing reliance on the market, trimming inefficiency, and removing trade barriers - is an important first step. In conjunction with its economic plan, the government proposed a social program to provide food aid and temporary employment. Yet nothing materialized, due to lack of resources. There is no policy to deal with pressure from laid-off state workers and small businesses that crack under pressure from foreign imports.

US efforts and resources would be better spent on developing a social program than on a policy excusing our demand for drugs. Addressing the needs of the poor is a prerequisite to defeating Shining Path as well as to curbing the coca trade.

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