Peru Finances

In an ambitious plan to swap "debt for drugs," a key Senate Democrat proposed Wednesday that the United States offer substantial debt relief to Peru, Colombia and Bolivia in return for commitments that the savings would be used to reduce cocaine production.

World Vision International was trying to help 23,000 Peruvian children whose lives are steeped in poverty. But terrorists killed two officials of the Christian charity agency, and three of its employees disappeared in a guerrilla war zone. So World Vision is pulling out. This month, the organization, based in Monrovia, Calif., will end its main Peruvian aid program, aimed at easing the poverty of the children's families and communities.

Presidents Jose Sarney of Brazil and Alan Garcia of Peru met again Friday after a jungle meeting Thursday to discuss development in one of the world's most remote and impoverished regions along their shared border. The two days of talks were also likely to touch on both contries' foreign debts, a Brazilian diplomat said.

In an ambitious plan to swap "debt for drugs," a key Senate Democrat proposed Wednesday that the United States offer substantial debt relief to Peru, Colombia and Bolivia in return for commitments that the savings would be used to reduce cocaine production.

Peru's navy has agreed to build 80 ships and tugboats for the Soviet Union in a deal that could help reduce Peru's debts to Moscow, a Peruvian spokesman said. Miguel Vargas, chief of services for the navy's Sima shipbuilding company, said the vessels, worth an estimated $375 million, are to be built in the next six years. Many of the ships would augment the Soviet Union's fishing fleet.

President Alan Garcia, beginning his third year in office, moved to gain control over the country's turbulent financial system Tuesday by proposing the nationalization of all banks and credit institutions in Peru. The plan would include the nationalization of the insurance industry and the closure of foreign exchange houses, and would outlaw the street sale and purchasing of foreign currency, which government officials have blamed for causing economic uncertainty.

Guido Pennano, a respected Peruvian economist, held out a 1,000-inti bill and asked, "Do you know how much Peru's biggest bill is worth now?" "Less than $2," he said, answering his own question and sinking back into his chair with a grimace. "Imagine. In January of this year, it was worth $5." He thought for a moment. "No, wait--it was $50!"

As a hurricane of inflation pounds Brazil's economy, wage earners, consumers and savers seek whatever flimsy shelter they can find: They ask the boss for mid-month advances, knowing that their salary will buy a lot less by payday; they stock up whenever possible on food staples and household supplies, whose prices leap frequently.

World Vision International was trying to help 23,000 Peruvian children whose lives are steeped in poverty. But terrorists killed two officials of the Christian charity agency, and three of its employees disappeared in a guerrilla war zone. So World Vision is pulling out. This month, the organization, based in Monrovia, Calif., will end its main Peruvian aid program, aimed at easing the poverty of the children's families and communities.

Guido Pennano, a respected Peruvian economist, held out a 1,000-inti bill and asked, "Do you know how much Peru's biggest bill is worth now?" "Less than $2," he said, answering his own question and sinking back into his chair with a grimace. "Imagine. In January of this year, it was worth $5." He thought for a moment. "No, wait--it was $50!"

As a hurricane of inflation pounds Brazil's economy, wage earners, consumers and savers seek whatever flimsy shelter they can find: They ask the boss for mid-month advances, knowing that their salary will buy a lot less by payday; they stock up whenever possible on food staples and household supplies, whose prices leap frequently.

Peru's navy has agreed to build 80 ships and tugboats for the Soviet Union in a deal that could help reduce Peru's debts to Moscow, a Peruvian spokesman said. Miguel Vargas, chief of services for the navy's Sima shipbuilding company, said the vessels, worth an estimated $375 million, are to be built in the next six years. Many of the ships would augment the Soviet Union's fishing fleet.

President Alan Garcia, beginning his third year in office, moved to gain control over the country's turbulent financial system Tuesday by proposing the nationalization of all banks and credit institutions in Peru. The plan would include the nationalization of the insurance industry and the closure of foreign exchange houses, and would outlaw the street sale and purchasing of foreign currency, which government officials have blamed for causing economic uncertainty.

Presidents Jose Sarney of Brazil and Alan Garcia of Peru met again Friday after a jungle meeting Thursday to discuss development in one of the world's most remote and impoverished regions along their shared border. The two days of talks were also likely to touch on both contries' foreign debts, a Brazilian diplomat said.