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THE WORLD : PERU : Fujimori's True Test: Can He Be Democratic?

August 06, 1995|Michael Shifter and Peter Hakim | Michael Shifter is program director for democratic governance at the Inter-American Dialogue. Peter Hakim is the Dialogue's director

WASHINGTON — As Alberto Fujimori begins his second administration, he has an opportunity to become a great Latin American leader. To do so, he needs to become much more democratic. But few of his critics believe that's possible.

Fujimori is widely supported in Peru. Having won overwhelming election victories in 1990 and 1995 against the two best-known Peruvians in the world--Mario Vargas Llosa and Javier Perez de Cuellar--he has brought security and economic growth to the battered country he inherited.

In five years, Fujimori has come close to destroying the Shining Path, probably the most virulent insurgency in Latin American history. When he promised to do precisely this in 1990, few believed him. The insurgency seemed invincible. But sound intelligence and a smart military strategy enabled his government to capture the Shining Path leader Abimael Guzman and largely defeat the insurgency.

Meantime, Fujimori reversed Peru's economic decline. The situation became especially dire during the Alan Garcia government (1985-1990), when the country suffered a decline in growth of 4.5% and a cumulative inflation rate of 2,200,000%. In contrast, Peru's growth rate last year was 12%--the highest in the world--and inflation had dropped to 15%. Privatization is forging ahead, foreign capital is pouring in. Analysts predict that in 1995, Peru's growth rate will once again top that of any other country in the hemisphere.

Fujimori's resounding election triumph was surpassed only by the startling demise of Peru's traditional political parties. Because of their poor performance, all four parties lost their legal status. Combined, they failed to attract 15% of the total vote. The sharp repudiation of incumbent parties in Eastern Europe in the early 1990s seems mild in comparison.

Yet, Fujimori's record is not universally acclaimed. In April, 1992, less than two years into his first term, Fujimori closed the Senate and the Chamber of Deputies and suspended the constitution. In a hemisphere that has recently prided itself on its democratic bias, Fujimori's "self-coup"--along with the September, 1991, coup in Haiti--represent the only reversals in the past 15 years. Although Peru has had four elections since 1992, authoritarian practices persist.

But with Peru's insurgency in check, rampant inflation subdued, an array of inefficient state enterprises privatized and multiple and substantial trade and investment barriers lowered, the foundations for a strong economy have been put in place. Now is the time for Fujimori to move on to the next phase--to build solid institutions not subject to the president's whim and to democratize the country, both politically and socially. Fujimori's performance ought to be judged by progress in the following areas:

* Building state institutions . To sustain economic reform, the government needs to develop the institutional capacity to perform a variety of functions, including regulation. Relying on the market, and "getting the prices right," can only take the country so far. It is important to take on the tough job of improving the efficiency and transparency of Peru's public sector. Promoting greater decentralization is another key challenge. At present, there is only one national electoral district and no basis for local representation; spending authority has been stripped from municipal authorities.

* Addressing the "social question." Peru remains extremely poor. Only one in 10 Peruvians in the work force are fully employed. According to the World Bank, Peru, along with Honduras, has the worst income inequality in the hemisphere. The "invisible hand" may, after all, have its limits. Now that the macroeconomic situation is in order, Fujimori needs to focus on Peru's long-term social challenges, especially in education and health.

* Seeking democratic development and political reconciliation . Since his election victory in April, Fujimori has displayed little interest in building political bridges to opposition political forces, or institutionalizing his own Change 90/New Majority alliance. Capitalizing on an anti-political sensibility that extends well beyond Peru, Fujimori has unabashedly portrayed himself as a "general manager" who serves his "customers" (Peruvians). For him, institutions like political parties only poison his direct relationship to the people. Especially since his "self-coup," which earned Peru the opprobrium of the United States and international community, Fujimori has ruled with the firm support of the armed forces and the national intelligence service.

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