Date: Fri, 23 Jul 1993 03:09:33 -0700 (PDT) Subject: News: July 11-21 (211 KB) Copyright 1993 Reuters, Limited July 21, 1993, Wednesday, BC cycle SECTION: Bonds Capital Market. HEADLINE: CENTROMIN HOPES TO AUCTION COMPLEX BY DECEMBER BYLINE: By Mary Powers DATELINE: LIMA, JULY 21 Peru's largest state mining firm Centromin hopes to auction its refinery complex, surrounding mines and accompanying infrastructure by December, a company spokesman said. "We are looking at a date somewhere around December 10," the spokesman said, referring to the timetable for the bidding. Privatization officials are awaiting answers to a questionnaire sent out to more than 160 companies who may be interested in bidding for the complex, he said. A July 26 deadline has been set for receipt of the questionnaires. "The orientation of the sale at this moment is to sell the whole complex - La Oroya refineries, seven mines, four hydro- electric plants, the Antamina deposit and the railway - to a single buyer or a group of investors," the official said. He added, however, that a different privatization strategy could be decided upon depending on the response of potential investors. "We could modify the privatization rules according to the proposals received," he said. Privatization officials have said that the investment required to reactivate the complex could make it difficult to the sell the company as a single unit. Centromin is Peru's largest producer of zinc, lead and silver. Within 15 days of the July 26 cut-off date, Centromin will publish a preliminary list of the firms pre-qualified to bidding, using criteria such as technical and economic capacity and demonstrated interest in reactivating the firm. From August to November, these firms will have the opportunity to visit the refineries and mines and seek additional information needed for the bidding, the officials said. He said it was too soon to determine how many firms or investors might be interested in Centromin. Centromin chief Hernan Barreto has traveled to Asia and the United States in recent weeks to promote the firm. He is currently in Europe to meet with potential investors. London-based International Mining Consultants evaluated the firm's assets last year. Chase Manhattan Bank and Coopers and Lybrand accountants are now promoting the firm. Centromin registered sales of $404 million last year. It has dug its way out of debt and last year made a small operating profit through a rationalization program aimed at reducing costs and personnel, extracting maximum mineral content out of ore mined and eliminating bottlenecks in the refining process. With a 12,500-strong workforce, it produced 659,006 fine tonnes of minerals in 1991, according to company figures. Copyright 1993 Reuters, Limited July 21, 1993, Wednesday, BC cycle SECTION: Financial Report. HEADLINE: FOREIGN FIRMS SUBJECT TO PERU COURTS--CONSTITUTION DATELINE: LIMA, JULY 21, REUTER Foreigners who enter into contracts with the state will be subject to Peruvian laws and courts and will have no diplomatic claim, according to the text of constitution approved by Peru's congress. The clause was added during debate of the proposed constitutional articles pertaining to the economy. "In all contracts between the state and foreigners, the latter will be subject to the laws and the courts of Republic and renounce all diplomatic claim," the text says. Opposition congressman Manuel Moreyra had said it would be dangerous to leave such a clause out of the constitution. The text adds the state can submit economic controversies to tribunals constituted in virture of exisiting contracts or submit them to national or international arbitration. The approved text also says foreign and national investment will operate under the same conditions; commerce is free but if other states adopt discriminatory measures the Peruvian government can adopt analagous ones. Another clause says the state guarantees the availability of foreign exchange. Others in the proposed constitution defend free enterprise, free competition, expressly prohibit monopolies and promulgation of any law which modifies contractual obligations. Congress president Jaime Yoshiyama told a business grouping that the proposed constitution, which is expected to be submitted to a referendum, will make the private sector the engine of the economy after years of state intervention. He said he expected congress to end debate on the constitution in time for Independence Day on July 28. Copyright 1993 Reuters, Limited July 21, 1993, Wednesday, BC cycle SECTION: Money Report. Bonds Capital Market. HEADLINE: LATAM BRADY BONDS DRIFT SOUTH, EXOTICS STAY FIRM BYLINE: By Henry Tricks DATELINE: NEW YORK, JULY 21 Latin American Brady bonds were dragged down partly by the falling U.S. long bond, but "exotic" countries held firm and real rarities like Nicaragua rose, traders said. In the Eurobond market, Banco do Brazil launched a $200 million five- year issue at 400 basis points over Treasuries, a price that an official from co-lead manager Chemical Bank said would make this a benchmark five- year issue. Several other market players described the price level as aggressive. "The exotics are obviously not tied to U.S. yields and are moving higher in expectations of (eventual Brady-style debt restructuring) deals," the head of one trading department said, noting that the rally had been continuing for weeks. He said the price of barely traded Nicaraguan loans had even inched up to about 9-1/2 to 10 cents on the dollar from eight cents because of dealer demand. Peru Citi was steady at 36-1/8 percent of face value bid, Panama at 33- 1/2 and Ecuador MYRA at 32-1/2. Poland DDRAs and Bulgaria dollar paper were both a bit weaker than Tuesday's close at 35-1/4 and 26-3/8 percent respectively. The full point drop in the U.S. 30-year Treasury bond pressured the price of some fixed-rate Bradies, which are collateralized by U.S. securities. Argentine pars were at 55-1/8 percent bid, down 3/8 from Tuesday's close, Mexican pars slipped 3/8 to 73-3/8 and Venezuela pars fell 3/8 to 70-5/8. Brazil IDU's were down 1/4 at 74-3/4. But some profit-taking was also seen, and floating-rate instruments also declined. One trader said Argentine FRBs may outpace other assets in hopes that their price will jump when they are released from escrow as part of the Brady plan debt accord on September 1, but they too fell Wednesday. The trader also said some Venezuelan paper has been sold to make room for a landmark $1 billion yankee deal led by Salomon Brothers for a unit of Venezulan oil giant PDVSA that market sources expect to be launched Thursday. Juan Lacroze, managing director of global distibution for Latin American Eurobonds at Chemical Bank in New York, said the deal it co-led Wednesday for Banco do Brasil was 75 pct pre-sold before launch and that the low 400 basis point spread was no hurdle. "It is the new benchmark for five-year deals," he said. The deal was co- lead by Paribas Capital Markets. Traders at several other banks reserved judgement, however, saying the deal may have been a bit tightly priced. Two traders compared the 400 basis point spread with IDU bonds of similar maturity, which offer about double the yield and said it made the IDUs look a good buy. They noted that the two bonds are completely different animals, however, chiefly because of the huge amount of IDUs outstanding -- about $7 billion. A trader said the entire deal looks to have been placed by late Wednesday. It was trading at the re-offer price of 99.566 pct, he said. Copyright 1993 Reuters, Limited July 21, 1993, Wednesday, BC cycle SECTION: Financial Report. HEADLINE: SOUTHERN PERU COPPER UNIONS SET STRIKE DATELINE: LIMA, July 21 Four unions at Southern Peru Copper Corp presented notice of a strike to begin July 27 to protest the company's refusal to negotiate with blue-collar unions as a single unit. Andres Angulo, secretary of defense for the metallurgical workers union at the llo smelter, said the strike notice was presented to labor authorities in the port of Ilo, 1,000 kms south of Lima, earlier this week. By law, the notice must be presented five working days before the start of the strike. Angulo said the company's intention was to negotiate a three-year contract instead of the current one-year contract, with each of the four blue-collar unions representing workers at the Cuajone and Toquepala mines and Ilo smelter. He said unions have met all legal requirements to call a strike, including a secret vote by the majority of workers. "Labor peace" accords signed by some workers in which they receive a bonus in return for a pledge to ignore a strike are not binding, he said. Southern Peru produces about two-thirds of Peru's copper. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts/The Monitoring Report July 21, 1993, Wednesday SECTION: Part 4 The Middle East, Africa and Latin America; 4(D). LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1746/III HEADLINE: Peru: cabinet resigns for "routine reasons" The 14 cabinet members had placed their posts "at President Alberto Fujimori's disposal", Radioprogramas del Peru (Lima) reported Foreign Minister Oscar de la Puente as saying on 19th July. According to the German agency DPA, the cabinet had resigned "for protocol and routine reasons, leaving the President free to make changes". Copyright 1993 The Financial Times Limited; Financial Times July 20, 1993, Tuesday SECTION: Commodities and Agriculture; Pg. 22 HEADLINE: State companies slip in non-fuel mine output league BYLINE: By KENNETH GOODING, Mining Correspondent THE SHARE OF western world non-fuels mineral production accounted for by state-owned mining companies is falling - not via privatisation but because of lack of investment. This is one of the main conclusions reached by the Raw Material Group of Sweden when compiling data for the latest edition of Who Owns Who in the Mining Industry. Although programmes to sell state-controlled mining companies have started in, among others, Argentina, Bolivia, Nicaragua and Peru, these had not seen any substantial capacity sold to the private sector by the end of 1992. RMG says the few privatisations included the Canadian asbestos producer, Societe Nationale de l'Amiante; Peru's Empresa Mineral del Hierro Peru and the Condestable mine in that country. 'But even if the privatisation programmes had not yet had their full impact, the state share of western world production fell in 1991. This was primarily because of diminishing production levels in some state controlled mining companies where there was a lack of replacement investments,' says RMG. It points to Zaire as an example. Gecamines and other Zaire state mining companies dropped from eighth to 15th place in the list of the western world's top 50 mining groups. Anglo American Corporation of South Africa is the world's most important mining company, according to RMG, which drew up its league table by reference to the value of non-fuels minerals production controlled by each company in 1991. By this measurement, Anglo is nearly twice as big as its closest rival, RTZ Corporation of the UK. RMG admits, however: 'RTZ can claim to be the world's largest mining company using many other criteria'. RMG's method of assessment naturally gives most weight to production of high-value metals and minerals such as gold and diamonds. Gold production controlled by Anglo rose by 2 per cent to 410 tonnes between 1990 and 1991 while RMG counts De Beers, one of the world's biggest diamond producers, as an integral part of the Anglo group, not a separate mining company even though it is quoted separately. Similarly, RTZ's 49-per-cent-owned associate in Australia, CRA, is considered by RMG as part of the UK group. RGM points out that the fastest-growing big mining companies between 1990 and 1991 were Broken Hill Proprietary, Australia's biggest company, MIM Holdings, another Australian group, and Freeport-McMoRan of the US. BHP increased its share of western world non-fuels minerals output from 1.5 per cent to 2.1 per cent, mainly because of the huge growth in copper production from its partly-owned Escondida mine in Chile. MIM moved from 13th to 8th in the league table after it doubled its shareholding in Cominco, the Canadian zinc producer and because of increased output from its joint-ventured Porgera gold mine in Papua New Guinea. Freeport-McMoRan saw the value of its output rise by about one quarter because of increased production from its Indonesian copper-gold mine. If the proposed merger between Cyprus Minerals and Amax of the US goes through, the combined group would become one of the ten or 12 biggest western mining companies, depending on which of their core assets are included in the deal. Who Owns Who in Mining 1993, Pounds 140 or USDollars 310, and Roskill's Metals Databook, Pounds 190 or USDollars 420: from Roskill Information Services, 2 Clapham Road, London SW90JA, England. Raw Materials Group data on 7,000 mining and refining companies and 35 metals and minerals are also available on computer disc at Dollars 1,850, including a half-year update, from the same address. --------------------------------------------------------------- TOP WESTERN WORLD MININING COMPANIES IN 1991 --------------------------------------------------------------- Ranked by approximate share of total value of production of non- fuel minerals --------------------------------------------------------------- Controlling company Country % share or state of total ------------------------------------------------------------- Anglo American South Africa 8.3 RTZ UK 4.6 State of Chile Chile 2.7 State of Brazil Brazil 2.3 Broken Hill Pty Australia 2.1 Inco Canada 1.7 Brascan/Noranda Canada 1.6 MIM Holdings Australia 1.5 Phelps Dodge US 1.3 Asarco US 1.3 State of France France 1.2 Gencor South Africa 1.2 Western Mining Australia 1.2 State of Zaire Zaire 1.1 Placer Dome Canada 1.1 IMCERA Group US 1.1 Freeport-McMoRan US 1.1 State of Malaysia Malaysia 1.0 State of Morocco Morocco 0.9 Trelleborg Sweden 0.9 Cyprus Minerals US 0.9 -------------------------------------------------------------- Controlling company Country % share or state of total ------------------------------------------------------------- General Oriental UK 0.8 State of India India 0.8 Metallgesellschaft Germany 0.7 Barlow Rand South Africa 0.7 State of Zambia Zambia 0.6 Anglovaal South Africa 0.6 State of Peru Peru 0.6 Rembrandt Group South Africa 0.6 Amax US 0.6 Magma Copper US 0.6 Hanson UK 0.6 CAEMI Brazil 0.6 IMM Mexico 0.5 North Broken Hill Peko Australia 0.5 Lac Minerals Canada 0.5 Homestake Mining US 0.5 Outokumpu Finland 0.5 Former Yugoslavia Yugoslavia 0.5 State of Botswana Botswana 0.5 State of Indonesia Indonesia 0.5 State of Venezuela Venezuela 0.5 ------------------------------------------------------------- Source: Who Owns Who in Mining 1993 ------------------------------------------------------------- Copyright 1993 Inter Press Service Inter Press Service July 20, 1993, Tuesday HEADLINE: PERU: JOURNALISTS WANT GOVERNMENT TO STOP SQUEEZING THE PRESS BYLINE: by Ana Maria Lazo DATELINE: LIMA, July 20 Peru's press association says it wants the government to stop harassing the media and instead back a project which, they claim, would benefit both journalists and the state. The association has asked the government of President Alberto Fujimori to allow it to operate radio stations closed down because they did not have licenses. It has also asked the administration to cede to it the installations of a defunct state newspaper which it would use to publish an independent daily that practices "honest journalism". The association has proposed to contribute to the state some of the money it would make from the project. The newspaper would compensate for revenue the association has lost as a result of the government's recent move to scrap an allowance that used to be paid to professional organizations, says press association president Miguel Calderon. "That measure deprived the journalists association of annual earnings to the sum of one million dollars which it used to obtain from advertisements published in national dailies," Calderon said. While Peru's government says press freedom has no bounds here, journalists and media directors say they are subjected to pressures which are not always subtle. "How can you speak of freedom of expression in a country where the government channels all state advertisements to media that are devoted to President Alberto Fujimori?" asked Calderon. The media are constantly harassed, parliamentarians publicly threaten reporters, seven journalists have been detained for presumably being linked to guerrilla groups and 12 have disappeared in the past three years, he told IPS. And the future looks anything but bright since "a sword of damocles hangs over journalists with the promulgation soon of a new constitution that congress is preparing," Calderon said. The proposed constitution, which has the backing of the congressional majority loyal to Fujimori, includes clauses that could make refusal to reveal one's sources of information an offence, "something which does not happen in any country," said the journalist. It would also empower judges to ban the media from publishing information if a person or institution requests such a prohibition on the grounds that it would harm them, Calderon explained. Citing examples of official pressure on the media, he said that since 1991, two opposition magazines, "Caretas" and "Oiga" have been subjected to veiled harassment by the government for publishing reports that it does not like. Two years ago, "Caretas" was hailed before a court for printing a photograph of presidential adviser Vladimiro Montesinos with the caption "Rasputin," a reference to the monk who exerted great influence in the court of Russian Czar Nicholas II. Montesinos sued Caretas director Enrique Zileri for libel and the court ordered the journalist to refrain from any further mention of the presidential adviser. But the case did not end there. Two months ago, the Supreme Court imposed a 30-day suspended prison sentence on Zileri, along with a $50,000 fine and banned him from leaving the country without permission from the justice authorities. For journalist Maria Cornejo, "freedom of expression has never existed in Peru and now less than ever, since opposition media are harassed in a very subtle way." Cutbacks on state advertisements, which were always a big source of income for the non-daily press, is evidence of this, she said. And according to Francisco Igartua, director of the weekly "Oiga," the government has pressured magazines even further by slapping an 18- percent tax on the paper they use. However, some journalists, mainly those employed in the state media, feel that freedom of expression does, in fact, exist. In Peru "you can report on anything and anyone," IPS was toldby Jano Echeverria of the state information agency. The press association intends to put this to the test. Calderon said his organization "aims to edit a national daily that would practice free, honest journalism and defend freedom of expression and human rights." With this in mind the association has asked the government to give it "La Cronica," a state daily that went bankrupt in 1991. The association has also asked the government to allow it to operate 100 radio stations located in various parts of the country, which were closed down because they had no broadcasting licenses. Calderon said that his organization had the physical capacity but not the money to take over these media and generate jobs and create earnings for itself and for the state. He recalled that 65 percent of the almost 5,000 journalists affiliated to the association were jobless or under-employed and that, in the past three years, the country's prolonged economic crisis has forced eight dailies out of business. "We will finance these communications media with the advertisements we publish. We already have offers from trading enterprises to sign one- year advertisement contracts," Calderon said. He added that 60 percent of the funds the association would generate from advertising would be pumped back into the media and 30 percent would go to a fund for social assistance for journalists. The remaining 10 percent could go to the state, Calderon said. Copyright 1993 The Press Association Limited Press Association Newsfile July 20, 1993, Tuesday SECTION: QFF TV; Extra; Pick BYLINE: David Richards [deleted] Thursday, July 29 WE AIN'T WINNIN': PERU, WASHINGTON AND THE WAR ON DRUGS: The harsh reality of the US-sponsored war on Latin American drugs suppliers - one that is becoming a real war in Peru, source of 60% of the world's coca leaf crop, the raw material for cocaine. The US plan is to destroy drugs at their source but Peru's internal politics means this is not happening. The vicious insurgency movement, the Shining Path, has stepped into the conflict between anti-narcotics forces and traffickers by protecting the coca leaf growers and their plantations and taking a cut of the revenue in the process. This has led to the US forces confronting Shining Path, a movement that could soon be in power in Peru. (Channel 4, 11.10pm) [deleted] Copyright 1993 Reuters, Limited July 20, 1993, Tuesday, BC cycle SECTION: Money Report. Bonds Capital Market. HEADLINE: LATIN AMERICAN DEBT PRICES TAKE A SLIGHT BREATHER BYLINE: By Henry Tricks DATELINE: NEW YORK, JULY 20 Prices of most Latin American sovereign debt ebbed Tuesday, but traders said the market remains bouyant with investors casting far and wide for rich-yielding paper. "The market is fairly mixed at the moment -- it's neutral to mildly positve," said Alan Boyle, a trader at Continental Bank. "Traders are looking for the direction of institutional investment which has tended to dictate the direction of the market." Among Latin American credits, Venezuela and Argentina have led in volatility and performance recently, analysts said. A $1 billion yankee bond deal expected this week for a unit of Venezuela's PDVSA oil company has caught a lot of people's attention. It is to be led by Salomon Brothers. Bankers said the use of a so-called "enabling law" to press through important economic legislation is also brightening the country's economic prospects. In Argentina, they said, a recent sovereign deal with a three-year and seven-year maturity has helped tighten the spreads of other paper from that country. "When U.S. investors talk about Latin America you always hear Argentina mentioned in the conversation," said a trader, explaining the recent investor enthusiasm for its Brady bonds. Argentine pars were quoted at 55-1/2 pct bid at Tuesday's close off slightly higher levels earlier in the day. FRBs were up a fraction at 72-3/4. Venezuelan pars were off 1/8 of a point at 71 pct and DCBs were flat at the same price. A large Argentine industrial group, Compania Naviera Perez Companc, issued a $200 million five-year Eurobond Tuesday, yielding 340 basis points over U.S. Treasuries. Some of the most telling investor purchases recently have been in non- Latin paper such as Nigeria, Morocco and Bulgaria, because of the rich yields they are paying in comparison with rock bottom U.S. interest rates, traders said. Indeed, one of the reasons traders gave for the go-slow in LDC activity Tuesday has been the lack of direction in the U.S. bond market. Nigeria pars closed at 48-7/8 Tuesday, down from 49-1/2 early Monday. Morocco was at 69-7/8 and Bulgaria at 26-3/8. "On a yield basis, this is the only market left," said a trader, referring to the double-digit spreads in many assets. Mexico remained flat, with pars around 73-5/8 pct bid. NAFTA free trade negotiations between Mexico, the U.S. and Canada resume Wednesday in Ottawa and traders said these could help give some new direction to Mexican paper. Brazil IDUs were off the day's upper levels at 75, with the market stil waiting the outcome of negotiations over a new wage policy that some fear will have an inflationary impact. Peru firmed, with Citi loans hitting 36-1/4, up 1/2 over morning levels. One trader said there was a short squeeze in the paper, which may have been brought on by hopes it will be valuable currency in the country's privatization program. Copyright 1993 Reuters, Limited July 20, 1993, Tuesday, BC cycle SECTION: Money Report. Bonds Capital Market. HEADLINE: PERU CABINET QUITS TO ALLOW FUJIMORI TO RESHUFFLE DATELINE: LIMA, JULY 20, REUTER The 14 ministers in Peru's cabinet have submitted their resignations, a traditional practice in the run-up to the Independence Day celebrations when Peruvian presidents often make ministerial changes. Prime Minister Oscar de la Puente, whose announced the resignations, said he did not know if there would be changes. "In any case, the announcement will come from the president," de la Puente said. The last time the cabinet resigned en masse in December, Prseident Alberto Fujimori decided to change Economy MInister Carlos Bolona and Transport Minister Alfredo Ross. Copyright 1993 Reuters, Limited July 20, 1993, Tuesday, BC cycle SECTION: Money Report. Bonds Capital Market. HEADLINE: PERU MONEY SUPPLY UP 13 PCT IN FIRST HALF OF 1993 DATELINE: LIMA, JULY 20, REUTER Peru's money supply rose by 13 percent in the first half of 1993 compared with 20.1 percent in the same period of last year, the central bank said. Money supply increased by 175.6 million nuevos soles, or 13 percent, in the first half of the year, the bank said in a report. Inflation in that period reached 23.2 percent. Monthly monetary supply rates in the same period (3.2 percent; 2.8 percent; 2.3 percent; 1.9 percent; 1.2 percent and 1.0 percent respectively) decreased consecutively in a bid to bring inflation down, it added. External factors were mainly responsible for the contraction in money supply, including the purchase of $122 million in foreign exchange by the Central Reserve Bank of Peru, the bank said. Internal factors included the deposit of 39 million nuevos soles in sterling bank certificates and the withdrawl of 23.4 million nuevos soles by the central government, it added. In the first six months of 1993, liquidity in local currency in the monetary system increased by 14.1 percent, representing a decrease of 7.4 percent in real terms, the report said. Peru's monetary system saw an increased liquidity in foreign currency (principally the U.S. dollar) of $658 million, or 23.1 percent, in the first half of 1993, the bank said. Of the total liquidity, participation of foreign exchange in the first half of the year reached 71.2 percent, up 5.9 percent from last December, the report added. Credit by banks to the private sector expanded in nominal terms by 43.6 pct, according to the report. Of this, credit in foreign exchange represented 23.3 percent. In real terms, credit to the private sector increased by 16.5 percent. Figures in the report were based on the M1 measure of money supply, the bank said. Copyright 1993 Reuters, Limited July 20, 1993, Tuesday, BC cycle SECTION: Money Report. Bonds Capital Market. HEADLINE: PERU NET RESERVES FELL $53 MILLION IN JUNE DATELINE: LIMA, JULY 20 International net reserves in Peru's central bank fell $53 million in June compared with May, bringing the total to $2,469 million, a bank report said. The main factor in the decrease was the withdrawl of deposits by financial institutions ($84 million), offset by the net purchase of dollars ($26 million), it said. Net international reserves the first semester of the year grew by $468 million, the report said. In June 1992, net reserves in the Central Reserve Bank of Peru were at $1,578 million. Copyright 1993 Reuters, Limited July 20, 1993, Tuesday, BC cycle SECTION: Energy News. Bonds Capital Market. HEADLINE: SEPT 8 AUCTION SET FOR PERU OIL SHIPPING UNIT DATELINE: LIMA, JULY 20 Petrolera Transoceanica, the shipping subsidiary of the state-owned oil company Petroperu, will hold a second bid offering for 100 pct of the firm's shares on September 8, a privatization committee official said. The base price of the firm, which owns four tankers of 25,000 DWT each, has been reduced to $21,250,000 after no bids were presented in the first offering, he said. The New York-based shipping firm Jack Perot Jr and Sons has been contracted to promote the sale, the official added. He said Greek and U.S. shipping firms had shown interest. "The auction is for the entire company but we have not ruled out the receipt of offers for the tanker fleet or for individual ships," the official told Reuters. He added that the Petrolera Transoceanica would guarantee a 3-year contract with Petroperu, representing some $15 million a year for the buyer. The contract would not be affected by the expected privatization of Petroperu's refineries, he said. Petrolera Transoceanica transports crude to refineries around the country and ships refined crude to Peruvian ports. Copyright 1993 Chicago Tribune Company Chicago Tribune July 19, 1993, Monday, NORTH SPORTS FINAL EDITION SECTION: NEWS; Pg. 3; ZONE: N GRAPHIC: PHOTO: Peru hopes for peace: Vanessa Quiroga, 6, whose leg was blown off last year by a car bomb in Lima, Peru, releases a dove and watches it take flight Sunday. A symbol of Peru's long guerrilla war, she was in a parade by 20,000 people commemorating the bombing that killed 25. AP photo. Copyright 1993 Reuters, Limited July 19, 1993, Monday, BC cycle SECTION: Financial Report. HEADLINE: PERU STOCKS ROSE 1.49 PCT IN LAST WEEK OF TRADING DATELINE: LIMA, JULY 19 Shares on the Lima stock exchange (BVL) showed modest gains in the last week, boosted mainly by sharp rises in certain non-blue chip shares, stock market figures showed. The stock index closed on Friday at 672.59, up 9.87 points or 1.49 pct over the previous week, when shares rose 2.46 pct. The selective blue chip index, which registers 15 of the most actively- traded shares, fell 2.57 pct in the last week. Daily volume in the last week averaged $4,721,408, down some $1.5 million from the previous week's daily average. Sharpest gains were seen in shares of the Molinera Santa Rosa (41.2 pct) food company, the Lima Caucho tire firm (36.9 pct), the Vencedor paint company (34.4 pct), La Fenix Peruana insurance company (33.6 pct), the Industria de Cobre Peruana copper firm (31.9 pct) and the Arturo Field y La Estrella S.A. cookie company (24.5 pct). Brokers said the sharp rises in these stocks showed investors had taken notice of undervalued shares and were seeking to diversify their portfolios. By sector, industrial stocks showed the highest gains in the last week, rising 6.47 pct, followed by banking stocks with 5 pct and insurance stocks with 4.1 pct. Since June 14, Lima's stock market index has risen 130.75 points, or 22.2 pct, BVL figures showed. Brokers and stock market officials said the rise is due to increased foreign investment since the start-up of the pension fund system on June 21. The Lima stock market has showed gains of 80.34 pct since the beginning of the year, according to the BVL. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts/The Monitoring Report July 19, 1993, Monday SECTION: Part 4 The Middle East, Africa and Latin America; 4(D). LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1744/III HEADLINE: Peru: government extends state of emergency in various regions (ME/1738 iii) The government had extended the state of emergency for 60 days in the department of Lima; the constitutional province of El Callao; the provinces of Coronel Portillo and Padre Abad in Ucayali, Puerto Inca in Huanuco and Ucayali in Loreto, Radioprogramas del Peru (Lima) reported on 17th July. Copyright 1993 Agence France Presse Agence France Presse July 18, 1993 SECTION: News HEADLINE: 13 die in violence in Peru DATELINE: LIMA LIMA, July 18 (AFP) - An antiterrorist police patrol killed at least 10 members of the Shining Path guerrilla organization in a clash in northern Peru, officials said Sunday. In the incident Friday near the community of San Marcos, the so-called "Sinchis" patroll also captured eight members of the rebel group and wounded 10, said Colonel Eduardo Mendoza. Police seized a large quantity of arms, ammunition and explosives following the clash. There was no information about casualties among security forces. In a separate incident Saturday, police said three members of a family were slain in an attack by a Shining Path death squad in the southeastern Peruvian community of Carmen Alto, near Ayacucho. Police said one of the victims was the mother who was shot and killed while breastfeeding her one-year-old child, who survived the attack. Copyright 1993 Chicago Tribune Company Chicago Tribune July 18, 1993, Sunday, FINAL EDITION SECTION: NEWS; Pg. 17; ZONE: C HEADLINE: Bargain technology allows Chile to harvest fog for thirsty village BYLINE: By Gary Marx, Tribune Staff Writer DATELINE: CHUNGUNGO, Chile The landscape around this poor fishing village is rocky and bone dry. But Daisy Sasmayo's garden is in full bloom, with flowers, vegetables and a young apple tree. This once-parched community now has its first fresh water in decades, thanks to an ingenious system of plastic nets fixed on a nearby mountain to capture fog as it rolls in from the ocean. "When the water first started flowing last year, we went crazy," Sasmayo said as she gently watered her garden. "We had a huge party and were dousing each other with water. It has changed our lives 100 percent." In a village where 350 residents had survived on a limited supply of often-contaminated water trucked in from distant wells, townsfolk are building crude showers and their first flush toilets. They're washing their clothes more than once a week, planning a communal vegetable garden and allocating more water to their donkeys, chickens and other animals - and to soothe their own parched throats. Scientists say the new system, bankrolled by Canada and a handful of international aid agencies, will not solve the problem of providing fresh drinking water to the world's rapidly growing population. But the new technology - which is cheap to build, easy to maintain and requires no power - could alleviate water shortages in hundreds of rural communities in arid and semi-arid climates. At least 20 countries, including China, India, Mexico and Kenya, have been identified as places where the fog harvesting technology could be used. In 1990, Chilean and Canadian scientists set up a pilot project in Oman that captures fog to replenish underground aquifers. In a project just starting in Peru, fog-water captured in the nets is being used to grow cactus fruit and improve the diets of the poor. In Ecuador, nets on a 6,000- foot volcano near the capital, Quito, collect fog for drinking water. In Chile, scientists are building a fog-water collection system in Paposa, 600 miles north of Chungungo. They hope one day to use the technology to settle much of the nation's 1,000-mile northern coast, which is rich in marine life and minerals like copper and iron but is one of the driest places on Earth. "If there was a cheap, dependable way to get water, people would move to the coast," said Pilar Cereceda, a geographer at Chile's Catholic University who helped develop Chungungo's fog-harvesting system. "The problem is convincing people the technology will work." Harvesting fog droplets is not new. Ancient mariners often collected fog- borne water from large-leafed plants on distant islands, and Middle Eastern nomads are thought to have built small stone reservoirs under large trees to collect fog droplets. Chilean scientists began studying fog harvesting in the 1950s. But the research didn't take off until about five years ago when the International Development Research Center, a non-profit organization backed by the Canadian government, kicked in more than $350,000 to purchase equipment for a pilot project at Chungungo. The town has had a chronic water shortage since the 1970s when Bethlehem Steel Co. shut a nearby iron mine and dismantled its water system, which also supplied the village. Cereceda and other scientists say three conditions are needed for the fog-collection system to work: fog, wind and a town that is less than 12 miles from a mountain at least 1,500 feet tall. Two-thirds of the year, Chungungo is covered by a thick fog produced by the frigid Humboldt current that sweeps along Chile's coast. It is four miles from a 2,600-foot mountain, El Tofo, where winds at the peak average 12 m.p.h. The concept is simple. When the fog rolls in, individual droplets hit the nets, where they form larger water drops. These flow slowly down the nets into pipes that carry it by gravity to a tank outside the village. The water then is distributed through pipes to individual homes. Cereceda and other scientists spent several years determining the size, shape and thickness of the nets - the same type of nets used to shade crops - and the right altitude to place them. El Tofo now has 75 collectors, each 40 by 13 feet, stacked side-by-side and anchored by wooden poles and steel cables along a ridge that runs 200 to 500 feet below the peak. Each net captures an average of 38 gallons of water a day - or 8.2 gallons for each of Chungungo's residents. Per capita water consumption in Chungungo - where most residents earn about $250 a year - has increased from about 3.7 gallons a day to 8 gallons a day since the system began operating in March 1992. Each household pays an average of $2.25 a month for water. "The project now pays for itself," said Claudio Masson, Chungungo's project director, who works for the Chilean forestry service. To duplicate the system in another village would cost about $130,000. But the system is not without problems. Some nets have blown down during storms, and scientists installed filters in January after discovering insects, leaves and dirt snagged in the nets were contaminating the water. Chungungo's 26,000-gallon water tank has bottomed out three times since last year and a committee has been set up to fine villagers for overconsumption. It shuts off their water and charges $12.50 to resume service. Some offenders have used fog water to wash their automobiles; others have left water taps running all night. A red flag over the water tank warns villagers there is sufficient water stored only for drinking and cooking. "It's difficult to teach people to be more conscientious," said Patricio Pinones, head of Chungungo's water works. "This is all new for us." GRAPHIC: PHOTO: Claudio Masson, project director, shows the netting that captures droplets of fog used for fresh water in Chungungo, Chile. The nets are set about 2,000 feet up a 2,600-foot mountain. Tribune photo by Gary Marx. Copyright 1993 Reuters, Limited The Reuter Library Report July 18, 1993, Sunday, BC cycle HEADLINE: BUS ACCIDENT KILLS AT LEAST 25 IN PERU DATELINE: LIMA, July 18 At least 25 people died when a bus carrying about 60 passengers to a religious festival in northern Peru tumbled down a 300-metre (yard) cliff, police sources said. Police rescue teams on Sunday were working to clear debris and bodies from the site about 400 km (250 miles) north of Lima, the sources said. The cause of the accident, which took place on Saturday when the bus was travelling towards the northern province of Pallasca, has not yet been determined. Copyright 1993 The New York Times Company The New York Times July 18, 1993, Sunday, Late Edition - Final SECTION: Section 1; Page 18; Column 1; National Desk HEADLINE: Built for Cold War, Bunker Shifts Its Weaponry to Drug Battle BYLINE: By ERIC SCHMITT, Special to The New York Times DATELINE: CHEYENNE MOUNTAIN, Colo. In a bunker deep inside this granite peak, a small cadre of military analysts are fighting a threat that caused them to scramble a waiting fleet of jet fighters more than 100 times last year. But the targets they trace in multi-hued flight paths on glowing consoles and computer screens here at the nerve center of the North American Aerospace Defense Command, better known as Norad, are not Soviet bombers or nuclear-tipped missiles. They are pesky Cessnas and Beechcrafts ferrying cocaine from Latin America. With the cold war over, commanders throughout the military are scrambling to preserve their shrinking budgets by finding new missions. In this durable fortress just outside Colorado Springs, generals are training their formidable weaponry against a new villain: drug smugglers. The trouble is that the air defenses that Canada and the United States built in the 1960's and 1970's to protect North America's borders from airborne intruders may not be nimble enough to foil drug lords today. Planes flying low along the border with Mexico can often slip through Norad's radars, which were designed to spot high-flying bombers. Like Missiles at Mosquitoes Stormy weather grounds radar-carrying balloons. And the American fighter jets that outgunned Iraq's Air Force in the Persian Gulf war fly too fast, even at subsonic speeds, for pilots to see tail numbers on suspicious aircraft. Using Norad's weaponry against drug smugglers, many Administration officials and independent experts say, is like firing Stinger missiles to kill mosquitoes. "We want to do things more efficiently, but Norad uses very high technology that has much greater capability than law enforcement really needs," said Gary F. Crosby, an acting deputy director at the Office of National Drug Control Policy in Washington. The Pentagon spends more than $1.1 billion a year to fight drug smuggling, but only about 5 percent of the illegal narcotics enter the country by air. Norad officials say that small amount is proof that their anti-drug efforts, which cost more than $80 million a year, force smugglers to use sea or land routes. But law-enforcement agencies say other Federal efforts are more responsible for grounding drug flights than Norad's sometimes leaky defenses. White House officials plan to review the military's anti-drug assistance next year, and costly missions like Norad's could be casualties. "With most of the cocaine coming in by land, we'll be looking at Norad and other military commands," Mr. Crosby said. "Whether Norad has as great a role as it does now is open to question." Missile-Launching Monitor As Pentagon budget-cutting pressures grow, even Norad commanders note ruefully that their anti-drug mission could shrink. "One thing that's a downer is the realization that very small amounts of total drugs come by air," Gen. Charles A. Horner of the Air Force, who heads Norad and the United States Space Command, said in a recent interview here. Norad's main job is still to watch North America's borders for airborne intruders, and to monitor ballistic missile launchings around the world. >From its spy satellites, Norad alerted commanders in Saudi Arabia to Iraqi Scud missile launchings during the gulf war. Norad's anti-drug role was tacked on four years ago by Congress at little additional cost or effort, given that planes and radars were operating anyway. Since then, however, the number of missile launchings has dropped to 200 a year from 600, and the threat of attack from the former Soviet Union has diminished greatly. Suddenly, the anti-drug mission has assumed a higher profile here, accounting for 50 percent of Norad's air defense mission. Norad commanders direct their anti-drug effort from inside the cave-like complex bored 1,700 feet into the side of this mountain. When the complex was built in the 1960's, it was designed to withstand any Soviet nuclear strike. American commanders acknowledge that the far more destructive weapons now available would level the entire mountain. But commanders persist in keeping up appearances. A huge three-foot thick steel door swings open to allow a visitor to enter a 6.5-acre city of 15 three-story buildings erected on a metal base sitting atop giant metal coils. Designers figured if the Big One ever hit, the command post could sway on its giant shock absorbers and direct a retaliatory attack. The complex has food and water supplies for 30 days, and operates an air-purification system. Every so often, commanders shut up the mountain, and rehearse for the apocalypse. Revised Role Since '89 Since 1989, the Pentagon has worked closely with Federal law- enforcement agencies like the Customs Service and the Coast Guard to nab drug smugglers. Anti-drug aircraft at the military's Southern Command in Panama fly surveillance missions over Peru, Bolivia and Colombia. Long- range radars and ships assigned to the Atlantic Command in Norfolk, Va., scan the Caribbean. Norad's military radar and jets track and intercept suspicious aircraft, and join with law-enforcement aircraft to follow the planes until they land. "Norad is not going to shoot down a suspected drug-runner," said General Horner. "It's beyond the scope of our charter." Norad keeps 44 American and Canadian fighter jets on alert. The 40 American F-15's and F-16's at bases around the country can roar off in pursuit of possible smugglers on five minutes' notice, a service that costs the Air Force $22 million a year. Last year, the jets scrambled 104 times to intercept drug smugglers. There is just one problem: "Against slow, low-flying aircraft, it's difficult to maintain surveillance," said Lieut. Col. David Watt, a former chief of the air defense operations division here. "Two fighters have to work as a team. Normally, they can't even get a tail number." Slower, twin-engine Coast Guard Falcon or Customs Service Citation aircraft follow suspicious planes closer to the United States border. "Norad is a very good backstop for our efforts, but we're pretty self-sustaining," said a senior Customs Service official in Washington, who spoke on the condition of anonymity. Balloons Vulnerable to Weather Norad also points 40 fixed and mobile ground radars, some of which it shares with the Federal Aviation Administration, south toward the Mexican border. But the radars were designed to spot high-flying Soviet bombers, and are blind to aircraft flying below 10,000 feet. Perhaps the most debated arrow in Norad's anti-drug quiver is a fleet of 16 radar-carrying balloons, which watch for suspicious aircraft flying below 10,000 feet. The balloons, which this year will cost $58 million to operate, must be lowered in bad weather, limiting their deterrence. Inside the air defense operations center, a small, dimly lit office, military analysts watch computer screens and wall monitors that display maps of the southern United States and the Caribbean. Arcs on the screens that once tracked Soviet aircraft now plot courses of planes flying north from Latin America. "Norad is not taking the world as an unchanging place," said Lieut. Col. David Tillotson 3d, a senior air defense specialist here. "We're not pretending that the cold war threats still exist, but rather than reinvent the wheel, we should adapt to new missions." GRAPHIC: Photos: The entrance to the headquarters of the North American Aerospace Defense Command, known as Norad, outside Colorado Springs; At Norad's Space Command Center, generals are trying to preserve their shrinking budgets by training some of their formidable weapons against new villains: drug smugglers. Brig. Gen. Don Peterson, center, worked with Lieut. Col. Dale Goodell, left, and Capt. Stephen B. Cichocki. (Photographs by Jim Wilson/The New York Times) Copyright 1993 The New York Times Company The New York Times July 18, 1993, Sunday, Late Edition - Final SECTION: Section 1; Page 15; Column 1; Foreign Desk HEADLINE: Vargas Llosa Disparages Peru, and Vice Versa BYLINE: By NATHANIEL C. NASH, Special to The New York Times DATELINE: BUENOS AIRES Ask Peruvians about Mario Vargas Llosa and more often than not the reaction is surprisingly bitter. "He hasn't lived here for three years," said Luis San Martin, a cabdriver who used to run a steel fabricating business. "How does he know what we need, what we are going through? It's easy to talk from Spain or London. But he doesn't live with the reality of the country, people getting killed every day, misery and poverty." The writer, who almost became Peru's President three years ago, is now among the country's most disliked figures. President Alberto K. Fujimori, who edged out Mr. Vargas Llosa in June 1990, has more than 60 percent popular support in polls. Mr. Vargas Llosa's ratings hover around 10 percent. In his latest book, "El Pez en el Agua, Memorias," or "The Fish in the Water, Memories," he tries to shake off feelings of betrayal by Peru and to unveil the perpetual dirtiness of politics there, but he only succeeded in fueling his countrymen's anger. The book devotes 10 chapters to his youth, particularly his troubled relationship with an autocratic and brutal father, interspersed with 10 chapters about his political career, which ended when he left Lima in 1990 for Europe, promising never to re-enter politics. What angers Peruvians most is that Mr. Vargas Llosa spares no one, including former supporters of his Libertad movement. He describes as "cheap intellectuals" those leftists who denounced American expansionism, then sought lucrative positions at American universities. And he excoriates a number of former conservative allies who have supported President Fujimori since he seized near-dictatorial power on April 5, 1992. Hernando de Soto, one of Peru's most noted political and economic thinkers, was described as "pompous and ridiculous" by Mr. Vargas Llosa. Sitting in the comfortable Plaza Hotel here, in the middle of a book tour, Mr. Vargas Llosa said the attacks against him did not sting that much. "There is nothing that they can say to me that they didn't say during the campaign," he said. "I had to be specific and use names, otherwise the book would have no real weight." He says unequivocably that he is done with politics, was a bad politician -- being too honest with the public -- and will never run for office again. "I am returning to the ranks of the intellectuals and from there I plan, as I have always done, to be critical and express opinions and engage in polemics," he said. Perhaps the most explosive pronouncement was his call for the United States to impose the same economic sanctions on Peru as on Haiti, after Mr. Fujimori closed Congress and the courts. Peruvians, beaten down by poverty, guerrilla violence and economic recession, took great offense, since in large measure they saw Mr. Fujimori's actions as the only way to combat terrorism. "The attitude here is that Vargas Llosa looks upon Peru as a Haitian dictatorship, and according to the polls the people do not think that way," said Alfredo Torres, president of the Apoyo polling group. "He is seen as elitist, an aloof intellectual who is against the country. I don't think he could ever come back to Peru. He would be insulted in the streets." Mr. Vargas Llosa, apparently recognizing that fact, talks almost as a man without a country. "I am a Peruvian by geographical accident," he said, adding that he felt the current outcry was an attempt by enemies in the military "to use me as a scapegoat." He concedes there could be some connection between his bitterness toward his autocratic father and his harsh pronouncements on the troubles of his country and his preference for living outside its borders. "One thing my father instilled in me was an intense desire for liberty, to be free and not bound by anything," he said. "They criticize me for not living in Peru, but I am going to live where I please, wherever I write best." Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts July 17, 1993, Saturday SECTION: Part 4 The Middle East, Africa and Latin America; D. LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1743/D HEADLINE: IBERO-AMERICAN SUMMIT IN BRAZIL; PERUVIAN PRESIDENT SAYS CHANGES IN PERU'S POLITICAL SYSTEM HAVE BEEN ESSENTIAL SOURCE: Radioprogramas del Peru, Lima 1929 gmt 15 Jul 93 Text of relay of speech by Peruvian President Alberto Fujimori at the third Ibero-American Summit in Salvador, Bahia, Brazil; monitored in progress - one of the richest countries on the continent is plunged into underdevelopment and backwardness. Why have we not been able to build a more just society, a better society for the majority? Common citizens are asking these questions with increasing insistence. They are citizens who, living in a system they do not trust because of its existing inequalities, have always viewed themselves as silent witnesses. I have no doubt that the main cause behind this situation in my country has been the prevailing political system. It is an ambivalent political system that would become a dictatorship or a pseudo-democracy, but in either case it would wind up forgetting the main national interests. An opposition party was victorious because the ruling party failed, and so on. That is how a wealthy country like ours was running the serious risk of not surviving. What would have happened in Peru, the most difficult country to rule in the region, if drastic measures had not been taken to avoid total anarchy caused by the criminal violence of two terrorist groups? As in other times and other countries, the political system was collapsing, thus threatening Peruvian society with the abyss of a Pol Pot-style or fascist totalitarianism. My view of my country's political reality and democracy is completely opposed to a myopic conformity devoid of real and practical solutions. Can we call it a democracy and defend the system knowing that it is based on a permanent balance between the [word indistinct] and top classes that have always held power at various levels? Of course not. However, that reality has generated violence, corruption and a lack of attention to the basic needs of the country's majorities. If institutions and power groups are governing for their own interests, is it too bold to say that the system is outdated and that the concept of true democracy needs to be revisited and, consequently, the ruling political system redesigned? In Peru, the ill- named democratic institutions were incapable of resolving the enormous social problems or closing the gap that separates us from the developed world. As part of this Ibero-American community that has converged upon this warm and friendly country, allow me to make my contribution by telling you a little about our efforts, which are directed at laying the foundations for development with equality. These efforts are having undeniable results. We can now reaffirm our conviction that recovery in Peru is completely feasible. Much has been achieved during these three years of government. We are controlling the inflation rate. We have brought it down from the 50% we received to the current 2%, thanks to strict fiscal discipline. We have also exchanged the negative reserves we inherited for reserves of more than 2.5 billion dollars, again thanks to fiscal discipline. We have re-entered the international financial community. We are now eligible for credit, and foreign capital has begun to flow into the country after many years. During this time we have begun a moralisation process within the judicial administration system so the people will have access to its benefits. Beyond all this, we are defeating terrorism within an unconditional framework of human rights. This means that we are managing the recovery of a country whose primary asset is to be able to [word indistinct] again. To manage this, we made the firm decision to govern; to overcome the unsurpassable barrier between the impossibility of governing and the right to live in peace. Of course we still have a long way to go, but we cherish the hope that by the end of my administration, Peru will be a totally different country from the one we inherited. Of all the challenges we face, achieving national peace is the most important. Once terrorism is defeated there will be no more killing. It will benefit not only our country but the whole region as it will eliminate the possibility of this plague spreading to neighbouring countries, thus preventing the terror and violence we Peruvians have suffered from touching others. As a significant part of this unique government experience, I must highlight the enormous determination of the Peruvian people, both civilian and military; their understanding and sacrifice in withstanding radical changes with the conviction that it will be worth all their efforts to create a truly democratic country with opportunities for all. That would be the fulfilment of the historic aspiration of all Peruvians. Thank you. Copyright 1993 Agence France Presse Agence France Presse July 17, 1993 SECTION: News HEADLINE: Latin American Parliament dedicates headquarters DATELINE: SAO PAULO SAO PAULO, July 17 (AFP) - Latin American countries inaugurated the permanent headquarters of the Latin American Parliament here Saturday. Brazilian President Itamar Franco, host of the opening ceremonies, said the Parliament's headquarters would be "the house of Latin American democracy, which will be a privileged forum for dialogue and understanding." Ten 10 Latin American presidents, the president of Portugal and representatives of 22 Latin American countries attended the inaugural ceremonies, which were marked by a walkout during a speech and a street demonstration. Peru's foreign minister, Oscar de la Puente-Rayagada, stormed out after Parliament President Humberto Celli criticized power grabs by elected presidents. Peruvian President Alberto Fujimori seized nearly dictatorial powers in an April 1992 self-coup. Outside the building, demonstrators gathered in the streets to protest the [sic] In his speech to the assembly, Celli criticized "neo-liberal" proposals to reduce the roles of the member states, defending accelerated regional economic integration and underscoring the need for continental integration. Celli warned that without resolving "terrible social problems" brought on by unorganized economic growth, democracy would be incomplete. Celli also called for the International Court in The Hague to rule on the morality of banks that in the 1980s lent money to Latin America, raising its debt to more than 450 million dollars. Leaders of Argentina, Brazil, Colombia, Cuba, Chile, Ecuador, Honduras, Nicaragua, Panama, Paraguay and Portugal attended the ceremony dedicating the the modernistic, cylindrical cement-and-glass building designed by architect Oscar Niemayer. Niemayer was one of the designers of the city of Brasilia, Brazil's capital and seat of government. The parliament, which is holding its 14th assembly, is to meet through Sunday. Copyright 1993 Reuters, Limited July 17, 1993, Saturday, AM cycle HEADLINE: PERUVIAN FAMILY MEMBERS KILLED BY SUSPECTED GUERRILLAS DATELINE: AYACUCHO, Peru Three members of a family of Peruvian merchants were gunned down by a hooded group of suspected Maoist Shining Path guerrillas in this Andean city, police sources said Saturday. The murder of a father, mother and one of their sons, gunned down in their Ayacucho home, broke four months of peace in the mountainous region which is the cradle of the leftist guerrilla movement. Police, however, said the killings were an isolated incident, adding that they did expect a resurgence of guerrilla violence in the region. The Shining Path, whose 13-year war to install a peasant state in Peru has cost some 26,000 lives, has been badly crippled since the capture of its legendary leader and founder Abimael Guzman, now serving a life in jail term. Increasing government pressure against the leftist guerrillas has also insured the capture of other leaders and thousands of militants since Guzman's fall. Copyright 1993 The Daily Telegraph plc The Daily Telegraph July 17, 1993, Saturday HEADLINE: The Telegraph Magazine: The Warlords ABIMAEL GUZMAN Leader of Peruvian Maoist terrorists Sendero Luminoso (Shining Path), former professor of philosophy. Base: El Fronton island penitentiary, near Lima. Territory: one third of Peru, including Huallaga valley. Forces: estimated core of 200, with possibly 30,000 supporters WHEN Abimael Guzman was arrested last September, in a room above a ballet studio in a smart suburb of Lima, he been living underground for 12 years and was advertised as the most dangerous man in South America. He probably still is. It matters not that President Gonzalo, as he prefers to style himself, is now in prison; nor that the rigid brand of Maoism he champions has been superseded in other parts of the world - even in backward Albania. By his uncompromising example Guzman has shown that an indigenous population, without any external aid or finance, can challenge the ideologies of any superpower. Guzman, now a bearded, overweight psoriasis sufferer, was born illegitimate on December 4, 1934 - an anniversary which is regularly commemorated by Sendero with an electrical blackout. He was educated at San Agustin University, in Arequipa, where he studied philosophy and law and was known as a quiet and studious pupil. Following an earthquake in 1960, Guzman led a damage assessment team through the barrios of Arequipa and the misery he witnessed was to have a profound effect. In 1962 he joined the staff of Ayacucho University, where an ethnologist colleague determined Guzman's political development by pointing out a potent similarity between Peru's pre-conquest society and Chairman Mao's China. In 1965, Guzman made the first of three visits there. He learned a lot from Peru's catastrophic Castro-inspired rebellion of the same year, in which only a handful of revolutionaries spoke the language of the people they were trying to liberate. By contrast, his own revolution would be meticulously planned. For the next 15 years Guzman used Ayacucho University as a base from which to recruit and infiltrate the local community. On March 17, 1980, he launched the 'armed struggle' and disappeared. Since then it is estimated that 27,000 people have lost their lives, many victims being executed with ritualistic brutality. Damage amounting to more than @10 billion has reduced Peru to a state of emergency with a suspended constitution. His arrest and subsequent sentencing to life imprisonment have done little to staunch the violence. Among the mysteries which cling to Guzman are the circumstances surrounding the death of his fanatical wife, Augusta de la Torre, one theory being that he killed her. Also not proved are the links, much publicised by army officers, between Sendero Luminoso and drug traffickers. But Sendero has demonstrated pretty efficiently that it does not need coca-dollars to effect its revolution - it can make do with beer- can bombs and stolen weapons. Copyright 1993 The Economist Newspaper, Ltd. The Economist July 17, 1993 SECTION: World politics and current affairs; INTERNATIONAL; Pg. 38 (U.K. Edition Pg. 50) HEADLINE: Infrastructure in Latin America; Public services, private pesos IN MONTEVIDEO and Mexico city, businessmen fed up with inefficient public telephones have embraced cellular technology. In Buenos Aires and Caracas, private courier services compete vigorously with the state-run postal system. In Cartagena and Lima many put their faith not in the national energy system but in private power generators. Across Latin America, consumers and businesses have been turning to private suppliers for services that had long been available only from the state. The reason is the crumbling of state-run services. Debt crises and budget crunches in the 1980s led many governments to neglect their infrastructure. Politics made things worse. In many countries, politicians keen on re-election have not allowed state firms to charge enough for the public services they run, leaving them short of cash for new investment or even for the maintenance of what they have. Politicians have also often picked their friends to run these state firms, and they in turn have let facilities crumble and then handed out contracts for replacement at swollen prices to their cronies. The result generally hits the poor hardest. Bad roads and public transport cost farmers undue time and money getting their crops to market or children to school. Often the roads are so bad that neither the produce nor the children make it. The Pan-American Health Organisation estimates that nearly a third of the region's population does not have decent sewerage systems or permanent access to medical care; over a quarter lack access to safe drinking water. Business suffers too. The region's ports are one example. While most of the world has moved to modern methods of handling cargo, most of Latin America's state-run ports -- except in Chile, which modernised its ports a decade ago -- have retained their labour-intensive ways. Imports and exports alike are hit. In Brazil, port handling costs for steel were until recently about $ 20 a tonne, five times the cost of Rotterdam. Roads too have been neglected. From the 1950s to the 1970s, governments spent heavily to build extensive road systems. But, as a recent UN report points out, during the 1980s they then failed to maintain the new roads or to adapt them to users' needs. The World Bank reckons past bad maintenance will cost some $ 25 billion to put right, three times what proper and timely maintenance would have cost. And each dollar skimped on maintenance has cost road users three dollars in operating costs, adds the UN. Not everyone agrees that these burdens have slowed down economic growth, however. Some economists think last year's severe power shortages in Colombia hit growth by as much as 1% of GDP. No, say some government officials. They admit the shortages were undesirable, but argue that they unleased private-sector creativity which let businesses carry on, using their own generators and flexible work schedules. The ordinary citizen has undoubtedly suffered from neglected public services. But some enterprising firms have flourished in recent years by setting up industrial complexes with their own energy supply, port services and satellite communications. Lincoln Rathman, of Scudder, Stevens & Clark, a New York investment-management company, believes such "islands of ultra-modernity" show that ropey infrastructure will not hinder future growth decisively. His firm, along with the International Finance Corporation, the private-sector arm of the World Bank, and two American energy firms, recently launched the first fund for private investment in smaller-scale power-generation projects in the region. Private-sector infrastructure has drawbacks. Many small power suppliers have used outdated technology, more polluting than that of centrally provided services. They are not necessarily efficient; privately generated power often goes to waste, as operators usually cannot sell their excess power to others through a national grid. Yet the power is there. And the rapid growth of such private suppliers in various sectors of infrastructure has made the failure of public providers painfully obvious. It has helped to spur central planners, and the international agencies that finance their projects, to consider what was once unthinkable; bringing in private capital and reducing the role of the state in providing and maintaining infrastructure. Attracting the investor This change of philosophy, along with the need for large sums to fix up the region's services, has led to a spurt of experiments designed to attract private investment. In Mexico some 4,000 kilometres (2,500 miles) of four-lane toll roads are being built and financed by the private sector. Peru, Brazil and mexico, following Chile's lead, have all started to reform their inefficient ports. The toll collection on the main road connecting Caracas to its airport (and -- more important to sun-loving caraquenos -- to its beaches) was long notorious for inefficiency and pilferage. Now a private firm does the job, properly; revenues are up and the firm is even contributing towards maintenance of the road. One daring scheme is the Tiete-Parana waterway project is Sao Paulo state, in Brazil, which will cost over $ 13 billion to complete. This is a public-private partnership, and its decentralised decision-making gives the leading role to private partners. The IFC estimates that over $ 35 billion is currently invested in such public-private projects in Latin America. There could be plenty more: Salomon Brothers, an American investment bank, reckons that Argentina alone will need that much investment in infrastructure by the end of the decade. On July 13th American and Mexican officials announced a new programme of infrastructure investment along their 2,000-mile border, for which they hope to win $ 15 billion-$ 20 billion in private capital. Not all these experiments will succeed. Investors, domestic and foreign, remain wary of putting money into long-term projects in countries known for economic and political instability. Money for the Brazilian waterway project may prove hard or impossible to find. Mexico's toll-road project has already run into financing problems. Road-users have balked at the high tolls on the first roads completed. Combined with cost overruns and poor government planning, this has made Mexican investors reluctant to finance more. There is reason for optimism, however. The Inter-American Development Bank (IDB) reckons that some $ 50 billion of net capital flowed into Latin America last year alone, three times the 1990 figure; Citibank says $ 57 billion. More should be on its way. Continued macroeconomic stability combined with legal and regulatory reforms in many countries, notably Mexico, have provided investors with clearer rules about repatriation of profits and greater protection for long-term investments. Formerly state-owned services will get their share. Last month saw the successful sale of 45 of YPF, Argentina's oil company, for $ 3 billion. Multilateral lending institutions are looking about for ways to aid long- term financing. Shahid Husain, vice-president for Latin America at the World Bank, believes that decentralising the financing and management of infrastructure by increasing private participation is essential to the region's future. His bank and the IDB are planning a new fund which would guarantee longer-term private investments in infrastructure. Insiders say the launch -- planned first for Argentina, with other countries to follow -- will probably happen early next year. Domestic investors will play their part. The privatisation of pensions, which as just begun in Peru and Mexico and is under consideration in several other countries, should open up new sources of capital and much strengthen local capital markets. Chile reformed its pensions in this way a decade ago, with remarkable results. Chilean electric-power companies can now do what many thought unthinkable a few years ago: raise long- term money at competitive rates. Despite these promising changes, some signs of the old order remain. Confidence in the region's commitment to modernity and the welcome foreign investors hardly received a boost when an executive of Edenor, a newly privatised energy firm in Argentina, was thrown in jail last month. He had turned off the power to hundreds of thousands of slum dwellers who were siphoning off electricity without paying. Plenty of potholes still lie ahead on Latin America's road to the private-service future. GRAPHIC: Picture, The superstructure looks pretty ropey too Copyright 1993 The Economist Newspaper, Ltd. The Economist July 17, 1993 SECTION: Leaders; Pg. 16 (U.K. Edition Pg. 18) HEADLINE: Reforming Latin America HIGHLIGHT: Don't let a fiesta become a fiasco LATIN Americans are usually quick to explain how much they differ from one another, and seldom dwell on anything they have in common with Spaniards or Portuguese. Yet, when the leaders of the Spanish- and Portuguese-speaking world met this week in Brazil for their annual fiesta, they were not just celebrating a shared cultural heritage, but were also recognising a common commitment to reform. That commitment, always fragile, now faces new threats, from both within and without. It would be a tragedy if the chance to transform the whole of Latin America were lost for want of proper guidance at home and necessary support from abroad. The theme of this year's meeting was social development, a tacit acknowledgment by the Latin Americans that the course of reform is in trouble. In the past few years almost all of them have renounced authoritarian governments and closed economies, and espoused instead democracy and free markets. Admittedly, some countries -- notably Brazil -- have been discarding old habits and acquiring new ones with much less enthusiasm than others. And one, Cuba, has yet to start reform at all. But it is not just the laggards that are causing concern. The wider problem is that several years of austerity have begun to give way to impatience and a feeling that it is time to hit the tequila. Hence the search for social development. For most Latin Americans the past ten years have indeed been hard. Whereas one in four lived in absolute poverty in 1980, by the end of the decade it was the lot of nearly one in three. At the same time the distribution of income, already hideously skewed, grew even less equal. Some countries have recently seen spectacular economic growth (7.3% in Venezuela last year, 9% in Argentina, 10.4% in Chile), but others have fared less well (Brazil's and Peru's economies both shrank in 1992). This year the region as a whole may grow little more than 2%. Against this background, politicians are beginning to notice the poor. Their minds are being concentrated by a round of elections. Bolivia and Paraguay have recently voted; Argentina, Chile and Venezuela go to the polls later this year, and Brazil, Colombia, Ecuador and Mexico next year. The difficulty is that in general Latin Americans already spend quite a high proportion of their national incomes on social welfare. Spending more risks adding to budget deficits, inflation and the nervousness of investors, all of which would in turn jeopardise the successes of the past few years. In some countries -- such as Chile, which has travelled farthest down the road to economic reform -- it might be safe to spend a higher share of the budget on, say, education, especially if cuts were made in defence. Education brings benefits to health and even income distribution, as well as to economic prosperity. But most countries would be wise just to make better use of the money already spent: fewer new schools to please politicians' contractor cronies; less money for universities that benefit the middle class, more for basic education. The effort to spend more wisely should not stop there, if politicians want to head off riots in the streets -- or even coups. Latin Americans are becoming ever less tolerant of the corruption that use to be such a feature of the old days. In the past year popular impatience with corruption has helped to bring down two presidents, in Brazil and Venezuela; and it was cited by another, in Peru, when with military backing he suspended democracy. If Latin America's leaders want to win support for measures such as privatisation (often seen by the poor as legalised theft for the benefit of the rich, see page 38), they must open up the activities of the state to inspection, bring in regulation and give up the old practice of suborning judges. Their best course, however, is the least glamorous: to continue the fight against inflation. Unless they are outside the money economy, the poor gain more than anyone from stable prices; unlike the rich, they cannot insulate themselves from inflation, either by sending their capital abroad or through systems of indexation like the one that enables Brazil to survive with inflation of around 30% a month. A record of honest government and victory against inflation will provide a formidable combination for any reformer worried about re-election. Stable prices, stable friendships Formidable but perhaps not sufficient. Latin America's delicate reforms could yet be shrivelled by the indifference of the outside world, especially by the rich countries' reluctance to accept Latin America's exports (see page 63). Obstructionism in the GATT talks is bad enough. Even worse would be a failure by the United States to ratify NAFTA, the North American Free Trade Agreement. That would be a blow not so much to the Mexican economy as to the entire political edifice on which that country's reform is built: an understanding that the United States will use trade to underwrite economic reform, democratisation and stability in its southern neighbour. In August 1982 Latin America went into a decade of misery when Mexico announced it could not pay its debts. A rebuff to Mexico on NAFTA would be a rebuff to all of Latin America. Perhaps only Chile's reforms would survive. The United States should not under-estimate what is at stake. GRAPHIC: Illustration, no caption Copyright 1993 The Financial Times Limited; Financial Times July 16, 1993, Friday SECTION: Commodities and Agriculture; Pg. 24 HEADLINE: Sale date set for Cerro Verde mine BYLINE: By REUTER DATELINE: LIMA STATE-OWNED Minero Peru has set September 10 as the date for the sale of its Cerro Verde copper mine, a 'world-class deposit' that has attracted keen interest among top international companies, according to Mr Raul Otero, the company's president, Reuter reports from Lima. Distribution of the privatisation rules to the 19 mining companies prequalified to bid for Peru's fourth most important copper mine was to begin this week, he said. The minimum price and minimum investment requirement for Cerro Verde, 1,000km south of Lima in the southern region of Arequipa, would be announced a month before the sale, Mr Otero added. 'We have yet to fix the minimum price and we still have to determine how we'll fix the minimum investment because we need to look at the alternatives and what is acceptable for us,' he said. Copyright 1993 The Atlanta Constitution The Atlanta Journal and Constitution July 16, 1993 SECTION: LOCAL NEWS; Section A; Page 2 HEADLINE: Q&A ON THE NEWS BYLINE: Betty Parham and Gerrie Ferris Do you have a question about the news - local, national or international? Betty Parham and Gerrie Ferris will try to get an anaswer for you. Call 222-2002 on a touch-tone phone and follow the instructions. Q: Calvin Trillin's column mentioned a State Department document listing the 50 countries most important to the United States. He said Canada was No. 9. I'm interested in knowing what the other countries are. Can you find out? Glenn Kramer, Atlanta A: An as yet unreleased State Department report called "State 2000" was commissioned during the Bush administration to "re-evaluate and overhaul" the manner in which our foreign policy is formulated and executed. Results were to reflect the changing dynamics of international relations, with less emphasis on the threat of war and more on global economics, technology and trade. The 50 countries ranked "most important according to an evaluation of U.S. interests" are, in descending order: Germany, France, Britain, China, Japan, Russia, Mexico, Israel, Canada and Iraq. The next 40, in order, are Italy, Nigeria, Egypt, India, Saudi Arabia, South Africa, Australia, Pakistan, Cuba, Libya, Argentina, Spain, El Salvador, South Korea, Indonesia, Turkey, Thailand, Ethiopia, Syria, Peru, Greece, Zaire, Jordan, Kenya, Venezuela, Brazil, Sudan, Iran, Chile, Jamaica, Lebanon, Senegal, Singapore, Malaysia, Sweden, Netherlands, Colombia, Zimbabwe, Ivory Coast and Bolivia. The report says Iraq's importance will diminish and Ukraine's will increase. Copyright 1993 Inter Press Service Inter Press Service July 16, 1993, Friday HEADLINE: ENVIRONMENT: BIODIVERSITY PACT CHANGE "THREATENS ECOLOGY" BYLINE: by Pratap Chatterjee DATELINE: AMSTERDAM, July 16 European and U.S. plans to protect drug industry copyrights threaten to gut an international convention on biodiversity of its most important elements, say activists and parliamentarians. They say governments from the European Community and the U.S. plan to add legal language to the convention to protect the "intellectual property" (patents and copyrights) of Northern corporations -- instead of the millions of species the convention was originally designed to protect. A total of 167 countries signed the convention that was drawn up for the Earth Summit in Rio de Janeiro last June. The convention requires them to catalogue all the species in their countries, meet safety regulations when experimenting with new species, and share the rewards of any research on species with the communities that have protected the species for centuries. For example, over half of the commercially marketed medicines today are derived from the world's forests. Many of these species that provide cures for diseases such as cancer have been used for centuries by local communities and the knowledge about the properties of plants come from these communities. Furthermore the communities have painstakingly protected thousands of varieties of each plant for their different properties. The same is true of vegetables such as the potato which comes from the high mountains of Peru where peasants have looked after 3,000 varieties of potatoes for centuries. But profits for the multi-billion dollar trade in these medicines and agricultural products such as seeds go to large multinational companies like Merck and Cargill who market them internationally. The changes that the European Community (EC) and the U.S. are suggesting will ensure that the companies retain the right to these profits and not have to share them with the communities. Yet according to activists like Vandana Shiva of Third World Network in India, it is these very companies that are threatening this diversity that the communities have nurtured. Shiva says that the companies have selected certain species and grown them in large quantities that have wiped out the smaller varieties. In addition activists complain that corporations are harvesting many species at such a rate that they will not be able to regenerate before they are wiped out completely. The biodiversity convention was supposed to change this by ensuring that the communities that had protected the species would be able to continue their work and derive some benefits from it. To ensure that this convention enters into force a minimum of 30 countries must ratify that they will implement it. So far 21 countries have taken that measure and the 12 countries of the EC together with the U.S. hope to join their ranks later this year, which will give the convention the necessary extra ratification to become legally binding. When the convention was first drawn up for last year's Earth Summit, then President George Bush created considerable controversyby refusing to sign it on the grounds that it would not protect the "intellectual property rights" (patents and copyrights) of U.S. corporations such as patents on chemicals or medicines derived from natural plant and animal species. This year the new president Bill Clinton announced he would sign the biodiversity convention but activists soon discovered that there was a catch. The new administration had negotiated with several companies and environmental groups to draw a special legal text (officially called an "interpretative statement") to add to the convention that would allow them to protect patents and ignore the safety regulations. Shiva raised the alarm among groups around the world on the new legal text and after numerous protests letters and faxes, the U.S. government agreed to drop the additional text when it signed the convention in June. But now, according to Gareth Porter, of the U.S.-based Environmental and Energy Study Institute who worked on the special text, the U.S. is planning to re-introduce a modified version of the text when it ratifies the convention in September. Meanwhile across the Atlantic, a similar text is being examinedby the EC that says for example that "compliance with intellectual property rights constitutes an essential pre-condition for the implementation of policies for technology transfer and co-investment." EC Development Commissioner Manuel Marin says that the text offers "the best possible guarantee that the private sector will play a role" in implementing the convention. Earlier this month the environmental ministers of the 12 countries met in Belgium to consider the text and 11 of them approved it. The single exception was Dutch Environment Minister Hans Alders. Because the EC countries want to ratify the convention together, this has presented them with a problem and they don't expect to come up with a consensus until December. Just before the ministers voted, the members of the European Parliament took a look at the additional text, and decided that it was "unsatisfactory and premature." Leading the complaint against the EC text was Hemmo Muntingh, a Dutch member of the Strasbourg-based European Parliament and rapporteur for the parliamentary environment committee, who said that the text suggests that "the rights to patents and the like are more important than countries' sovereign rights over their natural resources." Unfortunately for him, the ministers can choose to ignore his plea for such sovereignty because they are not bound by decisions of the European Parliament. But he does have other powerful allies -- the environmental movement. Backing Muntingh's position are groups like Greenpeace. Its chief forests campaigner, Patrick Anderson, says: "The EC apparently thinks the rights of corporations are more important that the rights of groups such as indigenous people." And others like Shiva say that the activists must not allow the governments to destroy the spirit of the biodiversity convention. "The issue is not just a matter of interpretation. It is a matter of rights. The U.S. interpretation is seriously weighted in favor of Northern corporations and against Southern communities," she says. Yet time is running short for them to protect the language of the convention. This September the countries that have signed the convention will meet in Nairobi to examine how to implement and pay for the convention and the ratification process is expected to be completed by December. Copyright 1993 Inter Press Service Inter Press Service July 16, 1993, Friday HEADLINE: PERU: FUJIMORI ADMITS POSSIBLE EXISTENCE OF DEATH SQUADS BYLINE: by Abraham Lama DATELINE: LIMA, July 16 President Alberto Fujimori's acknowledgement that death squads may exist in Peru brought calls from politicians and the civil sector that the government end its dirty war against the insurgency. Opposition representatives in Peru's constituent congress said it was not enough to admit to the probable existence of the death squads, but that the government must investigate and eliminate these groups. Fujimori, in Salvador, Brazil. for the Ibero-American Summit, responded cautiously when questioned by the press about denunciations made by General Rodolfo Robles concerning the presence of death squads in the military. "Robles has given no proof nor revealed any sources. He has only mentioned names . . . I can't deny that perhaps they are doing things, but if they exist, I imagine they are left over from previous regimes because my government has ordered the armed forces to respect human rights," Fujimori said. Fujimori reiterated claims made in Lima that his government has implemented stricter laws and wants to institute the death penalty against the insurgents, who are currently tried by anonymous judges. Peru's civil war, which began in 1980, has left over 29,000 dead or disappeared. Both the Maoist Sendero Luminoso guerrillas and the armed forces have been responsible for massive human rights violations against the civilian population. "The first reaction of governments against the subversives was to use violence against violence and terror against terror, and this resulted in some things that I am trying to avoid," Fujimori said. Since Fujimori took power in July 1990, there have been two actions in Lima that appeared to be the work of military death squads and left a total of 25 people dead. The first occurred in Nov. 1991, when a group of masked men assaulted a house in central Lima, killing everyone attending a party. Witnesses said the killers appeared to be from the military. According to some testimonies, the victims were members of the Sendero Luminoso and the party was held to raise funds for the organization. The second incident occurred in July 1992, at the National Teachers University, which at the time was closely guarded by the army. Two days before, 40 people were killed and more than 200 injured by car bombs set off by Sendero Luminoso in a residential neighborhood in Lima. Nine students and a professor, suspected of being members of the guerrilla, were kidnapped by masked men who appeared to be members of the military. In April, an anonymous source approached leftist congressman Henry Pease with the claim that both crimes were committed by members of a military intelligence unit. A similar accusation was made by General Rodolfo Robles, who sought asylum and said he would later reveal proof of the existence of death squads within the military. Robles' denunciation, made from Buenos Aires, was given further credibility last week, when four clandestine graves were discovered outside of Lima, apparently containing the corpses of the nine students and professor who disappeared in 1992. The graves were discovered after another anonymous tip was given to the weekly "Si," along with a document claiming to prove the existence of the death squads. An investigative commission appointed by congress has been unable to indict officers named in the anonymous denunciations because they were already under investigation by the military justice system. Representatives from all of the opposition parties, as well as some from the ruling "Cambio 90" party, said that Fujimori's comments in Salvador commit him to initiating an investigation into and purging of the death squads. Nevertheless, popular Christian Congresswoman Antero Flores Araoz and ruling party member Carlos Ferrero Costa petitioned the Justice Department to begin an investigation immediately in response to the admission by Fujimori. However, Pease and Social Democratic Congressman Jose Barba Caballero said that Fujimori could be risking his presidency if he were to demand that the army hand over those responsible for death squad activity. Copyright 1993 The Times Mirror Company Los Angeles Times July 16, 1993, Friday, Home Edition SECTION: Metro; Part B; Page 7; Column 1; Metro Desk HEADLINE: GLOOMY PROSPECTS FROM LATIN AMERICA'S SUMMIT; HEMISPHERE: DEMOCRACY IS HOLDING, BUT THE ECONOMIC MIRACLE REMAINS ELUSIVE. BYLINE: By JORGE G. CASTANEDA, Jorge G. Castaneda is a graduate professor of political science at the National Autonomous University of Mexico in Mexico City. The 30-odd Latin American and Iberian heads of state and government gathered today in Salvador de Bahia, Brazil, are quite a different group than those who met in Madrid last year and in Guadalajara in 1991. This is a summit of far less confident leaders, a reflection of how the so-called Latin American miracle has lost its luster. Some of the heads of state who preened at the last two summits are no longer heads of anything. Brazil's Fernando Collor de Mello has been impeached for corruption and faces criminal charges; he may be reading about the next summit in jail. Carlos Andres Perez of Venezuela, one of the sponsors of the summit idea, has been removed from office too, also on charges of corruption. Jorge Serrano Elias of Guatemala, who manipulated last year's meeting into endorsing his "intellectual" summit of the Americas in Guatemala last April, was caught with his hand in the till also; he is now in exile in Panama. This year, the longevity award goes again to Fidel Castro. He has outlasted every other leader in the Americas -- and survived the unrelenting hostility of nine U.S. presidents -- proving the durability that a legitimate revolution confers upon its jefe, aged and authoritarian as he might be. The Bahia summit comes at a time when the optimism and heady expectations of the past few years are sputtering out. The expectations were understandable. After a decade of economic stagnation, Latin America seemed to be emerging as a hot prospect, doing what everyone said should be done: Open up to trade and investment; privatize state- owned industries; be friendly with the United States; embrace democratic rule. In the glorious aftermath of the fall of the Berlin Wall, this was the land of the future. Today, three broad traits characterize the region's lackluster situation (Chile, which is increasingly a case apart, being the exception). After a smattering of economic growth in a few of the larger nations, recession has set in, partly as a product of world trends, partly for local reasons. Regardless of previous situations, regardless even of whether the "right" policies were fully implemented, in Mexico, Colombia and Peru (to name but three countries), economic stagnation is now the rule. Low or negative per-capita growth, rising unemployment, cutbacks in government spending and the growing presence and consequences of drug trafficking are all the byproducts of this sorry state of affairs. In Central America and the Caribbean, the situation is different only by degree. In those countries where there is growth -- Argentina, Venezuela -- it has been accompanied by a dramatic widening of social disparities. Aggregate statistics, while impressive, mask severely deteriorating living standards for what is probably the majority of the population. In an impoverished middle-class Argentina, or in an oil-rich but typically Third World Venezuela, the implementation of trickle-down policies has ushered in results not unlike those they delivered in the United States: growth and prosperity for some, deprivation and injustice for most. Except that in Latin America all of this takes place without a safety net, and in societies that were already grossly unequal. Finally, Latin America is rediscovering that, whatever it does, certain internal and international realities cannot be modified easily, if at all. The huge inflow of speculative foreign investment into Latin America, for example, hailed as part of the "miracle," has been attributed to economic reforms. But recent studies are showing that the in-rush of resources is much less policy- and country-specific and much more a result of the conjunction of low yields in the industrialized nations and high ones in the stock exchanges of Mexico City, Buenos Aires and Sao Paulo. The best proof lies in the fact that Brazil, which is generally considered a laggard in the rush toward liberalization and privatization, is as much a magnet for speculative investment as are "model pupils" such as Mexico or Argentina. In fact, the host country of the Bahia summit is the sleeper of the hemisphere. In another of the region's endless paradoxes, this year Brazil, the supposed basket case of Latin America's economies, will grow more than Mexico and Argentina, the presumed success stories. Mexico, the jewel in the neo-liberal crown, will run a trade deficit of around $20 billion; Brazil, the plodder, will enjoy a trade surplus of around $20 billion, one of the highest in the world after Japan. And it will have built up reserves higher than Mexico's or Argentina's despite having privatized less -- and making less of a fuss about it. The picture painted at the Bahia summit is not a pretty one, although the staying power of democracy in the hemisphere, despite all its shortcomings, is encouraging. That picture has a moral to it: It takes more than free markets and fair elections to make a miracle. Copyright 1993 Latin America Institute, University of New Mexico NotiSur - Latin American Political Affairs July 16, 1993 SECTION: Political violence & peace initiatives HEADLINE: COLOMBIA & PERU: 2.5 MILLION PERSONS DISPLACED BY POLITICAL VIOLENCE On June 29, Mohammed Benamar, an official from the UN Office of the High Commissioner for Refugees (UNHCR), told reporters that approximately 2.5 million people have been uprooted from their homes in Peru and Colombia due to political violence. Benamar said that the situation faced by these internally displaced persons is often more difficult and complicated than that faced by refugees who leave their homeland. At present, most of the funds from the UNHCR's annual budget of US$1.3 billion goes for refugee assistance efforts in the former Yugoslavia, Afghanistan and Somalia. "The degree to which these conflicts are resolved will determine whether or not more assistance will be available for other countries," such as Colombia and Peru, he said. (Source: Agence France-Presse, 06/29/93) Copyright 1993 Latin America Institute, University of New Mexico NotiSur - Latin American Political Affairs July 16, 1993 SECTION: Political violence & peace initiatives HEADLINE: PERU: GOVERNMENT CLAIMS TO HAVE KILLED OR CAPTURED VIRTUALLY ALL LEADERS FROM REBEL GROUPS In a July 6 communique released by the National Anti- Terrorism Police (Direccion Nacional Contra el Terrorismo, DINCOTE), the government claims that operations conducted over the last 15 months have essentially "decapitated" the country's two rebel groups, Sendero Luminoso (Shining Path) and the Tupac Amaru Revolutionary Movement (Movimiento Revolucionario Tupac Amaru, MRTA). The statement affirms that Sendero Luminoso no longer represents a threat regarding the seizure of state power. The communique indicates that during the past 15 months, DINCOTE agents have captured a total of 832 members of the two rebel groups. Captured leaders include Sendero's four central directorate members-- Abimael Guzman, Elena Iparraguirre, Laura Zambrano and Walter Zenon Cardenas--as well as nearly all members from the Sendero political bureau, central committee, and metropolitan committee. MRTA leader Victor Polay and MRTA national executive committee members Peter Cardenas, Lucero Cumpa and Americo Gilbonio have also been captured. According to federal public prosecutor for terrorist crimes Daniel Espichan, a total of 194 rebels have been sentenced to life in prison on terrorism charges since September 1992 when the life sentence was instituted by presidential decree. During the same period, an additional 312 rebels have received prison sentences ranging from 10 to 30 years on similar charges. Many observers of the Peruvian insurgency say the government's dismissal of Sendero as a significant fighting force is premature. However, the assessment is considered relatively accurate in the case of the MRTA, as demonstrated in comments made on July 12 by captured MRTA commander Andres Mendoza. According to Mendoza, the MRTA has only a few bands of guerrillas left and the organization will probably disappear altogether over the next few months. Mendoza and 30 other MRTA rebels recently surrendered following mediation by Church officials between the rebels and government prosecutors. Four top MRTA commanders surrendered in early July. Under the government's "repentance law," rebels who turn themselves in and cooperate with military authorities are eligible for reduced sentences. After his recent surrender, MRTA leader Jose del Aguila Valles declared: "I didn't turn myself in out of cowardice, but because in war there are winners and losers, and I realize we've lost." (Sources: Spanish news service EFE, 06/27/93, 07/06/93; Agence France- Presse, 07/06/93, 07/07/93; Associated Press, 07/12/93) Copyright 1993 Latin America Institute, University of New Mexico NotiSur - Latin American Political Affairs July 16, 1993 SECTION: Human rights HEADLINE: PERU: UPDATE ON LA CANTUTA DISAPPEARANCE CASE Following months of tense deliberations, the five members of the congressional commission charged with investigating the July 1992 forced disappearance of nine students and a professor from the Enrique Guzman y Valle University (La Cantuta) were unable to come to a consensus regarding the events. Given the impasse, on June 23 the commission issued two separate reports. The majority report--signed by the three commission members affiliated with opposition parties in congress (Congreso Constituyente Democratico, CCD)--accused members of the military of responsibility for the forced disappearance and probable execution of the La Cantuta victims. Among those named in the majority report were Army commander Gen. Nicolas de Bari Hermoza; Vladimiro Montesinos, a powerful advisor to President Alberto Fujimori; National Intelligence Service (SIN) director Gen. Salazar Monroe; Special Forces Division (DIFE) chief Gen. Luis Perez Documet; Army Intelligence (DINTE) chief Gen. Juan Rivero Lazo; and Maj. Luis Martin Rivas. The majority report recommended judicial proceedings in the civilian courts against all those implicated. The report also recommended that Hermoza be dismissed from his post. The two commission members from the pro-government New Majority- Cambio 90 alliance released a separate report with a completely different set of conclusions. The pro- government report absolved the military of responsibility for the case, instead accusing the Cantuta victims of having staged their own disappearances. The report suggested that the victims could have been members of the Sendero Luminoso (Shining Path) rebel organization who chose to go into hiding, and recommended that the case be turned over to the military courts. Three days later, on June 26, the issue was put to a floor vote by the full CCD. As expected, given that pro- government legislators control the majority of seats in the CCD, the report signed by the three opposition deputies was rejected. After a brief respite, the case was back in the headlines following the July 8 discovery of skeletal remains of an undetermined number of individuals believed to be the Cantuta victims. The four mass graves containing the remains were found in the La Cieneguilla district of eastern Lima. Discovery of the remains came after Ricardo Uceda, director of the weekly magazine Si, received a map of the site, some charred bones-- including a complete human pelvis- -and a message indicating that the bodies of the disappeared Cantuta victims had been burned in a military barracks and then buried. In addition to a group of journalists, those present during the exhumation included Peter Archard-- Amnesty International's director for Latin America--and Francisco Soberon, director of the National Human Rights Coordinator. According to human rights prosecutor Clodomiro Chavez, identification of the remains will take at least a month. However, since teeth were found among the remains, experts have expressed confidence that it will be possible to reach positive identification of at least one of the victims. Shortly after discovery of the remains, opposition legislators in the CCD requested that a team of investigators from the Inter-American Human Rights Commission of the Organization of American States (OAS) be brought in to supervise the investigation. They fear that local forensic experts might be coaxed or threatened to file false reports regarding the identities of the victims as part of a coverup. Meanwhile, several legislators also called for the special CCD commission to reopen its investigations into the case. Ironically, the existence of mass graves in Cieneguilla had previously been reported in leaflets which had appeared in Lima in recent months. The leaflets stated that "those who were disappeared from La Cantuta were assassinated, then burned, and then buried in Cieneguilla." The leaflets were signed by a group calling itself "Leon Dormido" (Sleeping Lion), the same name used by the group of military officers which provided documents regarding the La Cantuta case to opposition congressperson Henry Pease. In turn, it was on the basis of those documents that Pease first went public with the case. (Sources: Notimex, 06/17/93; Deutsche Press Agentur, 06/25/93; Reuter, 06/26/93; Washington Office on Latin America (congressional briefing), 07/06/93; Associated Press, 07/10/93; Spanish news service EFE, 06/20/93, 06/23/93, 06/27/93, 06/28/93, 07/03/93, 07/09/93, 07/13/93; Agence France-Presse, 06/23/93, 06/27/93, 07/08/93, 07/09/93, 07/14/93) Copyright 1993 Latin America Institute, University of New Mexico NotiSur - Latin American Political Affairs July 16, 1993 SECTION: Military issues HEADLINE: PERU: UPDATE ON INVESTIGATIONS INTO NAVAL EMBEZZLEMENT SCANDAL Three concurrent investigations into the alleged embezzlement of about US$40 million from the Peruvian Naval Attache office in Washington D.C. between 1984 and 1992 have begun to bear fruit. One investigation is being conducted by the US Federal Bureau of Investigations, another by Peruvian military officials, and a third by the Peruvian civil justice system. The principal suspect in the fraud, former Attache Office administrative director Ret. Capt. Enrique Villagarcia Martinez, was arrested by US authorities earlier this year. On June 23, in a US federal district court, Villagarcia was sentenced to eight years in prison on 112 counts of embezzlement, communications fraud, interstate transport of stolen goods, and money laundering. Peruvian authorities, who are still hoping to recover some of the money, are considering filing a request to have Villagarcia extradited in order to stand trial in Peru. Meanwhile, the civilian investigation in Peru has led to the arrest of Rear Adm. Guillermo Tirado Villena, former head of the Military Attache Office in Washington and currently a member of the National Defense Secretariat. Officials in the military courts are currently engaged in a legal battle with the civilian judge assigned to the case, Moises Ayra Pena, regarding jurisdiction over Tirado Villena's case. Three others have also been arrested as a result of the military investigation: Rear Adm. Augusto Perez del Solar, and retired Rear Adms. Guillermo Simpson Villagarcia and Enrique Brian Valencia. (Sources: Notimex, 06/05/93; Agence France-Presse, 05/21/93, 06/24/93) Copyright 1993 Latin America Institute, University of New Mexico NotiSur - Latin American Political Affairs July 16, 1993 SECTION: Summaries & analysis HEADLINE: MENEM'S VISIT UNDERSCORES DISCORDANT U.S. POLICIES: FREE TRADE OVERSHADOWS FOCUS ON HUMAN RIGHTS (The following article is reproduced with permission from the author, Mary Rose Kubal. The article originally appeared in the July 9, 1993 issue of "Washington Report on the Hemisphere," a biweekly publication of the Council on Hemispheric Affairs.) The White House's first official visit from a Latin American president last week pulled regional issues, if only briefly, off the back burner where, aside from Haiti and Peru, they have been cooling. Argentina's ebullient Peronist President, Carlos Saul Menem, was in Washington June 28-30 to push his economic integration agenda and to receive the all-important imprimatur of White House approval prior to his country's crucial October mid-term elections. Taking in an earful of praise for his economic record on top of broad suggestions concerning future free trade access, Menem left the US with his wish list largely fulfilled. The visit suggests that Secretary of State Warren Christopher's spirited rhetoric concerning a new foreign policy focus on democracy and human rights may be that and nothing more. Still unclear is the Clinton team's objective in honoring Menem, whose presidency has been overshadowed by a series of as-yet unresolved corruption charges, when it could have backed up its heady language by inviting a more deserving--and needy-- candidate like Ramiro de Leon Carpio, former human rights ombudsman and Guatemala's new chief executive. One suspects US Trade Representative Mickey Kantor, the first official to meet with Menem, is emerging as a major architect of Clinton's Latin American policy--Christopher only deigned to see him at a quick White House luncheon following the presidential meeting. The picture of the accommodating regional leader willing to mount an aggressive pro-US foreign policy while fully supporting IMF mandates at home, Menem appears to have all the credentials that the administration's trade-oriented officials cherish. His government recently initiated the largest privatization effort in Latin American history, selling off over US$3 billion in shares of the state- owned oil company Yacimientos Petroliferos Fiscales (YPF). Although favored by business-oriented groups, these qualifications hardly justify Clinton's apparent enthusiasm to do business with a leader best known for his authoritarian tendencies, flagrant disregard for mounting social problems and his role in a series of well-documented corruption charges involving members of his family and close advisors. Christopher's support at the Vienna summit for expanding the definition of human rights to include economic guarantees would seem to clash with the President's uncritical embrace of Menem and his neoliberal agenda. In a joint press conference on June 29, Clinton's praise of Menem's economic record and suggestion that "once Congress successfully ratifies the North American Free Trade Agreement (NAFTA) with Mexico and with Canada, we will want to reduce trade barriers with other countries in this hemisphere," sounded eerily reminiscent of George Bush peddling his Enterprise for the Americas Initiative (EAI). Menem's visit indicates that Clinton is as dedicated as his predecessor to extending free trade beyond North America to the rest of the hemisphere. In addition, Clinton remained quiet on the US$125 million sale of 36 A-4 fighter jets currently being worked out by the Pentagon and the Argentine government. Although the meeting scheduled between Secretary of Defense Les Aspin and Menem never took place, the deal, initiated by Buenos Aires in April, is in the final negotiation stages. The horrendous human rights record of the Argentine military, as well as Menem's pardon of 280 of the armed forces' worst offenders, has been overlooked by Washington in its zeal to cultivate good relations with a potential hemispheric trading partner. In ignoring Menem's failings, Clinton is sidestepping the uncomfortable possibility that the stated objectives of fostering human rights and democracy, while encouraging neoliberal reforms, are not always compatible. Although it has girded macroeconomic stability, the massive privatization of government-owned industries--conducted outside of a regulatory framework--has contributed to lower standards of living for millions of Argentines. Steady transference and concentration of income has significantly damaged the middle and lower-middle classes, much like the situation Clinton has vowed to redress in the United States. Salaries have remained stagnant while prices have steadily increased, and, due to Economy Minister Domingo Cavallo's policy of maintaining dollar/peso parity, the middle class faces constantly diminishing buying power. In the land of cattle and grain, people are now literally starving, and a country which boasted the highest levels of schooling in all of Latin America now spends only 1.5% of its GNP on education--one of the lowest figures in the hemisphere. Social services have deteriorated almost to the point of non- existence for those who cannot afford basic needs, including medical care. Cavallo has accepted the social costs of neoliberal reforms--an irony not lost upon those who remember his statist financial policies while serving the military dictatorship. The desire to return Argentina to its "proper place" in the world is driving a model of development unconducive to political and economic democratization. In 1991, Menem pushed through legislation which increased the size of the Supreme Court and gave him the authority to appoint over half of the justices. He has since used emergency decree powers granted to him by that now-compliant body to implement controversial policies which otherwise had dim legislative prospects, as well as to block investigations of alleged corruption within his inner circle. All of this appears to have been lost upon the White House, which seems easily swayed by smooth-talking, free-spending Latin American statesmen like Menem or his Mexican counterpart, Carlos Salinas de Gortari. Hopefully, the US President and his Trade Representative will not be so dazzled by Argentina's putative free market successes that they will become apologists for yet another regime with questionable democratic bona fides. Copyright 1993 Reuters, Limited July 16, 1993, Friday, PM cycle HEADLINE: LATIN LEADERS TARGET U.S. TRADE EMBARGO ON CUBA BYLINE: By Katherine Molinski DATELINE: SALVADOR, Brazil Latin leaders criticize the U.S. trade embargo against Cuba and call for greater support from rich nations in a final draft of the Ibero-American summit declaration to be released Friday. A copy of the draft obtained by Reuters develops the summit's theme of "An Agenda for Development" by calling for freer, fairer trade and better "north-south dialogue." "We take note of the recent resolutions in international forums on the need to eliminate the unilateral application by any state for political ends of commercial or economic measures against another state," the document says. Called the Salvador Declaration, the document is to be signed by the 23 heads of state from Spain, Portugal and Latin America and presented officially Friday at the close of this third annual gathering. Participants said the reference to "unilateral measures" refers specifically to the 30-year-old U.S. trade embargo against Cuba, put in place by Washington to try to pressure Fidel Castro's communist government to make political and economic openings. Latin leaders here and even Cuban opposition activists said they felt the embargo was hurting the people of Cuba more than the Cuban government. Colombia President Cesar Gaviria, who met Castro Thursday, said he felt the Cuban leader had begun to enact some changes in the island nation, which has been under extreme economic pressure since collapse of its trade ties with the former Soviet Union. "There have been political and economic changes in Cuba and, if they continue, it may be possible for the embargo that has been imposed on the country could be lifted," Gaviria said. Carlos Alberto Montaner, president of the Madrid-based anti-Castro Liberal Cuban Union party, said his group would announce Friday its own proposal to end the embargo. "I think that the concern of the Latin leaders is legitimate, it is a concern with the economic condition of the Cuban people," Montaner said in an interview. The embargo issue is seen as a victory for Castro, who has been trying to get it on the Ibero-American agenda for the last three years. In his speech before the gathered heads of state, Cuba's veteran leader hammered away at the issue. "I cannot forget that Cuba (is) under a brutal embargo, provoked and threatened because it is small, because it sought social justice, because it doesn't surrender," Castro said. In the document the Latin leaders call for "greater access to the markets of industrialized nations, adequate means of financing and technological exchange" to overcome obstacles to development. The document says including developing nations in the "international arena" would benefit both poor and rich countries by increasing trade and commerce. "Prosperity in the South represents greater commercial opportunities in the North," it says. Participants from Spain's King Juan Carlos to Peru's Alberto Fujimori emphasized the summit's call to promote development in order to end widespread poverty in the region. "Can we really term as democracy a system that is based on the permanent balance of elites and power bosses that have always been in charge?" said Fujimori, who was suspended from last year's summit after he dismissed congress and gave himself extraordinary powers. Fujimori was reinstated as an Ibero-American member after holding municipal and constitutional assembly elections last year. Copyright 1993 Reuters, Limited July 16, 1993, Friday, BC cycle SECTION: Financial Report. Bonds Capital Market. HEADLINE: TRADING ON LIMA EXCHANGE UP SHARPLY IN JUNE DATELINE: LIMA, JULY 16, REUTER Trading on the Lima Stock Exchange (BVL) rose sharply in June with volume and number of transactions nearly doubling over the previous month, stock exchange figures showed. Stock trading on the BVL reached 259,569,298 nuevos soles ($129,427,955) last month compared with 172,053,745 nuevos soles ($87,675,737) in May, a 48.2 pct increase after inflation, the BVL said. Number of stock transactions increased 18,059 in June from 12,666 in May, an increase of 42.6 pct, it said. Overall, profits were up 19.2 pct after inflation. Sharpest gains were seen in preferred mining stocks (41 pct), followed by banking stocks (29.7 pct) and public service stocks (22.4 pct), the figures showed. A BVL official said the June gains were due to the growing interest of foreign and local investors in stocks running up to and following the launch of the private pension fund system. He added that last month's pledges of loans and donations by the international community in Paris for Peru poverty programs, totalling $900 million, helped boost investor confidence. "They (investors) are taking notice of stocks which are still undervalued," the official said, adding investors were diversifying their portfolios. The most heavily traded stocks were the Backus and Johnson brewery, Southern Peru Copper Corp., Compania Peruana de Telefonos, Type "B" and Banco de Credito, the BVL said. The stocks of some 270 companies are traded on the BVL, the majority of which are Peruvian-owned. Copyright 1993 Times Newspapers Limited The Times July 16, 1993, Friday SECTION: Overseas news HEADLINE: Latin America's fragile young democracies on trial BYLINE: By David Adams and Our Foreign Staff DEMOCRATIC rule in Latin America has lately undergone a series of important tests in a region where civilian governments only recently have become the norm. When Jean-Bertrand Aristide was elected President of Haiti in December 1990, only Cuba remained as the odd man out as democracy finally appeared to be taking hold. But Father Aristide lasted barely seven months before he was ousted by a military coup. Under a United Nations peace plan agreed at the weekend, Father Aristide will be returned to power on October 30. In April last year, President Fujimori dissolved the Peru congress and suspended constitutional guarantees. In February and November last year, President Perez of Venezuela survived two attempted military coups, only to be ousted by constitutional means in May, following in the footsteps of President Collor de Mello of Brazil. On May 25, President Serrano of Guatemala, apparently inspired by Senor Fujimori, also chose to rule by decree. A week later he, too, was gone, to be replaced by Ramiro de Leon Carpio, the country's highly respected state human rights prosecutor. Observers are trying to evaluate whether these shifts are to be taken as positive or negative signs. Most have no trouble placing Haiti, Cuba and Peru on the debit side of the democracy balance sheet. The developments in Venezuela and Brazil are seen as positive. Political developments in Paraguay have seen the traditional coalition of the Colorado party and military being voted out of power in May in the country's first democratic elections in its 182-year history. Guatemala is tottering on a knife edge and could fall either way. It remains to be seen how the divided but powerful military will conduct itself now that it must take orders from a man who dared to investigate some of its sinister abuses. ''The history of Guatemala does not encourage a generous analysis of military intentions,'' Eduardo Gamarra, a political scientist at Florida International University, said. Civilian rule was restored in Guatemala in 1986 after a period of repression. Mr Gamarra said he was encouraged by the way Venezuelan democratic institutions survived the past turbulent year. ''The institutions did not collapse; democratic procedures worked,'' he said. ''Democracy is not just about elections, it requires strong institutions which are generally lacking in Latin America.'' While the military still wields enormous power in Peru, Haiti and Cuba, elsewhere armies are shrinking in the face of state-imposed demilitarisation. Officers say they are happy to take a back seat as democracy takes hold. Latin American forces have little to be cheerful about, however, as budgets are slashed. As countries seek to redirect military spending to neglected social needs in a region of widespread poverty and illiteracy, the focus is slowly turning towards the fundamental problems of ''hyper-corruption'', both judicial and financial. Charges of state-tolerated corruption were the root cause in the challenges to democracy in Peru, Brazil, Venezuela, and Guatemala. Public anger over corruption was also a factor in the Bolivian elections last month, where illicit enrichment by public officials has traditionally been part of the political culture. Efforts at judicial reform and to impose mechanisms to control state corruption throughout the region are still in their infancy. ''What politicians lack is a culture of democratic behaviour,'' Mr Gamarra said. Copyright 1993 The Financial Times Limited; Financial Times July 16, 1993, Friday SECTION: Commodities and Agriculture; Pg. 24 HEADLINE: Sale date set for Cerro Verde mine BYLINE: By REUTER DATELINE: LIMA STATE-OWNED Minero Peru has set September 10 as the date for the sale of its Cerro Verde copper mine, a 'world-class deposit' that has attracted keen interest among top international companies, according to Mr Raul Otero, the company's president, Reuter reports from Lima. Distribution of the privatisation rules to the 19 mining companies prequalified to bid for Peru's fourth most important copper mine was to begin this week, he said. The minimum price and minimum investment requirement for Cerro Verde, 1,000km south of Lima in the southern region of Arequipa, would be announced a month before the sale, Mr Otero added. 'We have yet to fix the minimum price and we still have to determine how we'll fix the minimum investment because we need to look at the alternatives and what is acceptable for us,' he said. Copyright 1993 The Houston Chronicle Publishing Company The Houston Chronicle July 15, 1993, Thursday, 2 STAR Edition SECTION: A; Pg. 14 HEADLINE: Latin nations step out on world stage BYLINE: JEB BLOUNT; Special to the Chronicle DATELINE: SALVADOR, Brazil SALVADOR, Brazil -- A summit meeting of the leaders of 19 Latin American nations and their former colonial rulers is probably one of the strongest signs yet of the changes sweeping the world. With the third Ibero-American Conference that begins today and runs through Saturday, the once troubled countries of Central and South America and their European cousins, Spain and Portugal, will mark their re-emergence as nations that the world must take seriously, analysts say. ""This conference is designed to define exactly what development means and put it on the world agenda,'' said Marco Farani, spokesman for the host Brazilians. ""This is the most substantive of all the meetings coming out of our common cultural and historical roots. '' A decade ago, it would have been almost impossible to get these nations to sit at the same table, much less agree on a communique. Much of Central America was in the midst of revolutions pitting Soviet and Cuban- backed forces against U.S.-sponsored groups. Brazil, Chile and most of the Andean nations were under stern right-wing military rule. Argentina was in the grips of economic chaos, and the whole region was crippled by foreign debt. Spain and Portugal, having just tossed off the world's last vestiges of Mussolini-style fascism, were trying to re-integrate themselves into Europe. The United States, still smarting from Latin American anger over the backing of Britain in the Falklands War, was loathe to permit any further breaches of the Monroe Doctrine, committing the United States to oppose any foreign involvement in the affairs of the Americas. Today, however, only Cuba and Peru are outright dictatorships, and Peruvian President Alberto Fujimori won a referendum for his decision to suspend the country's Congress in April 1992. Most Latin American countries have embarked on a program of free- market economic reform, and Spain and Portugal, in decline for 350 years, clearly have rejoined the club of the leading developed nations. For the first time in memory, says a U.S. State Department spokesman, ""Latin America and the United States broadly share common economic goals and a commitment to democracy. '' The main work of the conference will be to write a development proposal to be presented to the United Nations. Despite economic growth in most of the countries represented, all still suffer from a lack of investment and access to the best technology the world has to offer. According to the United Nations Commission on Latin America and the Caribbean, the region grew 2.4 percent last year despite a world-wide recession and depressed prices for its traditional agricultural and natural resource exports. The figure almost doubles to 4.2 percent if Brazil is not included. The largest and most industrialized nation in the region, Brazil is hobbled by 1,200 percent annual inflation and zero growth. On the economic front, the conference coincides with the arrival of common needs and strengths. Latin America, with cultural and language ties, is seeking new markets for its expanding production, and sees Spain and Portugal as its doorway to Europe. As Europe has united, the European Community as a whole has supplanted the United States as many Latin American nations' largest trading partner. Spain and Portugal, for their part, are looking for new horizons. Before the end of the Cold War, they were a favored destination for investment from their richer EC neighbors to the north. With the fall of the Berlin Wall, much of that interest has shifted to Eastern Europe. ""These countries need to show that they have a strong foreign base to boost their influence in Europe,'' said Theotonio Dos Santos, a Brazilian political scientist. Spanish interests also have been investing heavily in Latin America. Cuba, opening up in the wake of declining Russian aid, has been the destination of nearly $ 1 billion in Spanish money. Iberia, a Spanish airline, has bought formerly government-owned carriers in Venezuela and Argentina. And Spanish businesses have taken advantage of other privatization opportunities in Argentina, buying the state-owned telephone system. But while all this good will has made the United States' relations easier with its southern neighbors, Dos Santos also said it shows the decline of U.S. influence. ""Since the 1950s people in Latin America have been talking about Latin American integration as a bulwark against traditional U.S. dominance, but nothing was ever done about it,'' he said. ""The creation of this system of meetings was the first united and independent expression of this. '' Conference facts. Facts and figures on the Ibero-American Conference nations: Countries: 21 (19 Latin American nations plus Spain and Portugal). Total population: 477.1 million. Richest country: Spain (per capita income $ 12,644 and GDP $ 493.1 billion in 1992). Poorest country: Nicaragua (per capita income $ 240 and GDP $ 897 million in 1992; inflation 13,670 percent per year). Largest country: Guatemala, 9.5 million. Languages: Spanish, Portugese. GRAPHIC: Graph: Conference facts (TEXT); Chronicle Copyright 1993 The Financial Times Limited; Financial Times July 15, 1993, Thursday SECTION: Pg. 3 HEADLINE: City seethes in summit shadow: Prospects and problems for the Ibero-American conference, opening in Brazil today BYLINE: By VERONICA BARUFFATI LEADERS began gathering in north-eastern Brazil yesterday for the third Ibero-American conference, which will focus on economic development and social justice. The two-day summit, which starts today in the city of Salvador, brings together Latin American heads of state and those of the region's former colonial powers, Spain and Portugal. Much of the two days will be spent drafting a document - An Agenda for Development, with emphasis on social development - to be presented to Mr Boutros Boutros Ghali, UN secretary general, for further discussion at the UN. Most of the participating countries share urgent problems, such as high infant mortality, poor access to basic health and education services, illiteracy, malnutrition and endemic disease. Since May, ministerial meetings have been drawing up working papers aimed at tackling some of the issues. Away from the conference's main agenda, President Alberto Fujimori of Peru is expected to use the gathering to further his international rehabilitation following criticism of his dissolution of Congress and seizure of wide powers in April last year. Admiring Brazilian press articles on Peru's economic progress under Mr Fujimori pushed Brazil's President Itamar Franco to pledge this week that there would be no 'Fujimorisation' of Brazilian society. Citizens of the habitually languorous city of Salvador, Brazil's first capital, have been sharply critical of preparations for the conference and the accompanying facelift. Many claim the meeting will do little to solve everyday problems. In recent weeks the city has seen feverish activity to spruce up areas between the airport, the convention centre and the hotels where 21 leaders, including Cuba's President Fidel Castro, will be staying. Armies of otherwise unemployed men have donned bright yellow uniforms to resurface and paint the city's two main arteries and to clear up years of rubbish dumped alongside the roads and washed up on the city's beaches. Hotels have rebuilt suites, and restaurants near the conference area have been subjected to weeks of rigorous inspection. In recent years parts of the historical centre, Pelourinho, with its magnificent churches and colonial architecture, have been restored, becoming one of Brazil's main tourist attractions. Copyright (c) 1993 Latin American Newsletters, Ltd. Latin America Weekly Report July 15, 1993 SECTION: EXCHANGE RATES; WR-93-27; Pg. 318 Local currency per US$ 1 Year ago Previous Current COUNTRY CURRENCY 03.07.92 25.06.93 02.07.93 Argentina peso 0.99 fr 0.9996 fr 0.999 fr Boliva boliviano 3.88 o 4.26 o 4.27 o 3.89 p 4.27 p 4.28 p Brazil cruzerio 3,536.0 o 52,370.00 c 56,361.00 c 3,820.0 p 57,200.00 p 60,500.00 p Chile peso 356.2 b n.a. b 404.29 b 358.0 p 414.00 p 414.00 p Colombia peso 693.7 o 788.82 m 787.51 m 650.0 p 785.00 p 760.00 p Costa Rica colon 135.0 o 141.17 o 141.30 o 135.0 p 141.80 p 143.00 p Domincan Rep. peso 13.0 fr 13.0 fr 13.0 fr Ecuador sucre 1,444.3 o 2,000.00 o 2,000.00 o 1,520.0 p 1,935.00 p 1,935.00 p El Salvador colon 8.39 i 8.80 i 8.79 i Guatemala quetzal 5.15 p 5.70 p p Honduras lempira 5.48 p 6.50 p 6.70 fr Mexico nuevo * 3.12 b 3.06 o 3.26 o peso * 3.13 p 3.11 p 3.12 p Nicaragua cordoba 6.13 o 6.14 o oro 5.45 p 6.27 p 6.27 p Paraguay guarani 1,490.0 fr 1,745.00 fr 1,745.00 fr Peru nuevo sol 1.20 fr 2.01 fr 2.03 fr Uruguay nuevo peso * 3.12 fr 3.97 i 4.01 i Venezuela bolivar 66.78 fr 89.70 fr 90.20 fr * new peso equivalent c commercial p parallel o official b banking t tourist i inter-banks e exchange houses m market rate fr free Barbados (dollar) 2.0 -- Belize (dollar) 2.0 -- Cuba (peso) 0.8 -- East Caribbean (dollar) 2.7 Guyana (dollar) 126.0 -- Haiti (gourde) 12.0 -- Jamaica (dollar) 22.50 -- Panama (balboa) 1.0 Suriname (guilder) 1.8 -- Trinidad & Tobago (dollar) 5.7 Copyright (c) 1993 Latin American Newsletters, Ltd. Latin America Weekly Report July 15, 1993 SECTION: TRENDS; WR-93-27; Pg. 318 HEADLINE: UNPOPULAR LEGISLATURES A warning sign on the political front: legislatures seem to be losing the confidence of the voters. Recent opinion surveys show the approval rating of congresses at a dangerous low (13% in Argentina, 16% in Venezuela, 23% in Brazil, 23% in Ecuador) and disapproval ratings very high (48% in Ecuador, 48.6% in Argentina, 50.8% in Panama, 54% in Costa Rica, 77% in Venezuela, Honduras and Guatemala). The exception: Fujimori's Peru, with a 50.3% approval rating. Copyright (c) 1993 Latin American Newsletters, Ltd. Latin America Weekly Report July 15, 1993 SECTION: PERU; Politics; WR-93-27; Pg. 322 HEADLINE: Debate begins on new constitution; OPPOSITION FOCUS ON 'NO' CAMPAIGN FOR REFERENDUM Debate on the new draft constitution began in the Congreso Constituyente Democratico (CCD) plenum on 1 July, with the pro-government majority making clear that approval of its text by 28 July, Independence Day, was the objective, come what may. Forced flexibility There is no doubt that the draft presented by the Nueva Mayoria-Cambio 90 coalition will be approved -- the coalitions' majority in the 80-seat CCD will see to that -- but the government's undertaking to submit the draft to a referendum (whether whole or in part is not yet clear) means that, in some cases, the majority will have to be more flexible that it would, perhaps, like. An early indication of this came on 4 July, when a proposal to refer all human rights cases involving the security forces in the emergency zones to the military courts was dropped after objections by the Left-Right opposition. Even some members of the majority objected, fearing that such a provision would remove all civilian control over the military. The initiative came, as ever, from the hardline fujimoristas Gilberto Siura and Martha Chavez. Radical departures The majority's text provides for a laissezfaire economy and a strong presidency, both radical departures from the current 1979 constitution. It attributes the leading role in the economy to the private sector, including the provision of pensions and the privatisation of state companies. The other two drafts submitted, by the right-wing Partido Popular Cristiano and the left-wing Movimiento Democratico de Izquierda, stress the separation of powers and the social obligations of the state. Both argue that the majority's draft would lead to an autocratic regime dominated by the President, and have said it will not survive after Alberto Fujimori's departure. They propose a series of checks and balances which they say are missing from the text under debate. Provisions that would allow the President to dissolve congress without cause, to veto laws, to issue an unlimited number of emergency decrees and to be re-elected immediately are particularly objectionable to the opposition. Henry Pease (MDI) has described the draft as 'autocratic, unpopular, neo-conservative and centralising'. PPC's proposals The PPC's version strengthens the role of the legislature, sets out the state's role in health and education, establlishing the obligation to provide social security and free schooling, and establishes the legal framework for a social market economy, including collective bargaining rights. The main features of the MDI text are parliamentary control over budgetary priorities, a 'popular veto' on laws and additional powers for local government. It also emphasises the state's obligation to defend job security, which is absent from the majority text. Whittled-down text The majority's text has 226 articles, 66 fewer than in an earlier version, and it proposes to reduce this even further during the debate, to less than 200, according to Carlos Torres y Torres Lara, chairman of the committee that drafted it. He says the new constitution will introduce more modern concepts, including citizens' rights to introduce bills and to make the authorities answerable for their actions, and will strike a balance between the presidential and parliamentary systems. The debate on referendums and plebiscites, which are key features of Fujimori's brand of 'direct democracy', is likely to be contentious. The opposition would like a 'yes' or 'no' referendum on the complete constitutional draft, hoping to capitalise on the perceived unpopularity of a number of Fujimori's policies. The majority, on the other hand, would prefer a popular vote only on the 'big' issues, such as presidential re-election and the death penalty, and the sooner the better. Copyright (c) 1993 Latin American Newsletters, Ltd. Latin America Weekly Report July 15, 1993 SECTION: PERU; Violence; WR-93-27; Pg. 322 HEADLINE: Fujimori claims Sendero is beaten; MAOISTS 'ARE NO LONGER A THREAT TO DEMOCRACY' A flurry of reports in recent weeks have driven home the message that the war against the 'subversives' of Sendero Luminoso and the Movimiento Revolucionario Tupac Amaru (MRTA) is being won. In the case of the MRTA, President Fujimori has announced that it will be defeated before the end of the year, and that 95% of its leaders are already under lock and key. On 30 June he declared that Sendero was no longer a threat. Note of caution Independent observers agree that Sendero is on the run. But some experts sound a note of caution. Enrique Bernales, a former senator and chairman of the congressional committee on political violence, thinks Sendero might be lying low while it recovers from the psychological blow of Guzman's capture, and the main regional commanders are still free. Another expert, Enrique Obando, thinks Sendero could become an endemic problem, like the IRA. But the military believe Sendero and the MRTA are being defeated in the main areas of operations: Cajamarca in the north, Junin in the central Andes and Puno in the south. Massive raids, such as an operation involving 5,000 troops and 200 special police in the Chorrillos district of Lima on 23 June, are designed to crush Sendero's organisation in the shantytowns. Thousands of arrests Fujimori claims that 80% of the leadership of Sendero's urban organisation, Socorro Popular, has been captured. The Coordinadora Nacional de Derechos Humanos calculates that 12,000 people have been arrested as suspected terrorists in the first six months of this year. The alleged MRTA commander in San Martin, in the north-east, Andres Mendoza (Camarada Grillo), surrendered towards the end of June, with 30 followers, under the terms of the 'repentance' law. Copyright (c) 1993 Latin American Newsletters, Ltd. Latin America Weekly Report July 15, 1993 SECTION: POSTSCRIPT; Peru; WR-93-27; Pg. 324 HEADLINE: Vargas Llosa The writer and former presidential candidate Mario Vargas Llosa has become a Spanish citizen. Copyright (c) 1993 Latin American Newsletters, Ltd.; Latin American Regional Reports: Mexico & NAFTA July 15, 1993 SECTION: EDUCATION & HEALTH; RM-93-07; Pg. 4 HEADLINE: Cholera growing fast; Over 2,500 cases this year The cholera epidemic is growing twice as fast in 1993 as it did in 1992. The Direccion General de Epidemiologia of the Secretaria de Salud has issued a report indicating that 2,577 cases had been registered in Mexico by 11 June this year. During the same period of 1992, the official reports show 1,225 cases of cholera. The number of deaths, though rising, is growing at a slower pace. From 1 January to 11 June 1993 a total of 54 Mexicans died of cholera, while there were 47 deaths registered during the same period of 1992. The bulk of the cases have been concentrated in the states of Puebla (581), Morelos (444), the federal district (348), the state of Mexico (313) and Tamaulipas. When the present cholera epidemic first made its appearance in Peru in 1991, Mexican officials claimed that the illness could not reach Mexico. Then health authorities said, after the first few cases were discovered, that these were isolated cases that would not lead to an epidemic. Then it was argued that Mexico city, which has the best health facilities in the country, would be safe from the epidemic. All these forecasts have been wrong. Health secretary Jesus Kumate has now taken to arguing that the threat of cholera has been exaggerated, since other diarrhoeic illnesses claim a greater number of deaths. Critics of the government, though, claim that the threat is real and growing, and they argue that the spread of the disease is a consequence of the administration's negligent attitude towards the country's health infrastructure. Copyright 1993 Reuters, Limited July 15, 1993, Thursday, BC cycle HEADLINE: A YEAR SINCE BOMBING, PERU BREATHES SIGH OF RELIEF BYLINE: By Mary Powers DATELINE: LIMA Jorge Orderique was packing groceries in an all-night supermarket when, a block away, he heard an explosion that came to symbolize the horror endured by Peruvians in 13 years of Maoist guerrilla war. "When I felt the first detonation I fell to the floor," Orderique said. "It all happened so quickly there was nothing I could do, I only felt I was covered in blood." He recovered from head wounds but a cement block crushed a fellow worker. The van bomb a year ago Friday turned the Tarata street apartment building in Miraflores into an inferno, sparking a sort of collective psychosis that Shining Path guerrillas might achieve their goal of bringing the Peruvian state to its knees. Twenty-five died and hundreds were injured or left homeless. A year later, with Shining Path chief Abimael Guzman behind bars, the tide has turned and the armed movement he launched in 1980 in the Andean town of Ayacucho has been severely weakened, said guerrilla experts gathered for a seminar here this week. "The turnaround is the product of a counter-offensive which began in 1989 and led to the spectacular results, like Guzman's capture, we have seen in recent months," said Carlos Tapia, a university colleague of Guzman who has studied the movement. Last September's capture punctured the "balloon of invincibility" created around Guzman through his clever management of a psychological war, said David Scott Palmer, professor of international studies at Boston University. He and other experts spoke of how the Shining Path, forging a strategy based on Mao Tse Tung's peasant revolution in China, had failed to win the support of Peru's peasants and which led the guerrillas to impose their ideas through terror. During the 1980s, massacres in Andean highland communities were commonplace as peasants were caught in the middle of guerrilla attacks and the government's often brutal counter-insurgency strategy. Self-defense militias begun in 1989, now numbering about 3,500- comprising up to 250,000 peasants in a loose alliance with local military commanders, have become an increasingly effective mechanism to repel the guerrillas, Tapia said. "As a result of its own policies the Shining Path was forced to prioritize the city over the countryside," said Palmer, editor of the anthology "The Shining Path of Peru. " But an urban campaign of car bombs and murders of shantytown leaders turned Lima residents, with more political clout than their peasant counterparts, against the Shining Path, Tapia said. The guerrillas also earned the scorn of foreign governments after attacks on aid workers and the religious. The experts warned, however, it was too soon to perform an autopsy on the Shining Path despite the capture of thousands of guerrillas and President Alberto Fujimori's promise to crush the insurgency by 1995. In the first half of 1993, 1,106 people died in political violence, according to Constitution and Society, a specialized publication. The Shining Path carried out 549 attacks while some 415 guerrillas died at the hands of security forces. Still, if that rate continues it could mean up to a third less people will die in 1993 than last year, it said. More than 29,000 people have died in Peru's political violence since 1980. "What remains to be done now is to provide support to the peasant population with works of infrastructure, not just the civic action programs by the military," said Enrique Obando of the Peruvian Center for International Studies. Palmer said evidence exists that moderate guerrilla elements, once isolated by Guzman, are working anonymously with shantytown residents to combat grinding poverty and racism, factors often cited as the seed of Peru's armed rebellions. Copyright 1993 Reuters, Limited The Reuter Business Report July 14, 1993, Wednesday, BC cycle HEADLINE: MINERO PERU SETS DATE FOR SALE OF COPPER MINE BYLINE: By Mary Powers DATELINE: LIMA, Peru State-owned Minero Peru has set a Sept. 10 sale date for its Cerro Verde copper mine that has attracted strong interest from abroad, company president Raul Otero said Wednesday. Minero Peru was due to begin distributing the privatization rules to the 19 companies that qualified to bid for Peru's fourth most important copper mine, he said. "There is a lot of interest because this is what they call a world-class deposit," Otero said in an interview. The minimum price and minimum investment requirement for Cerro Verde, located some 600 miles south of Lima in the southern region of Arequipa, would be set in the coming days and announced a month prior to the sale, he added. "We have yet to set the minimum price, and we still have to determine how we'll fix the minimum investment because we need to look at the alternatives and what is acceptable for us," he said. The investment commitment is key because it would demonstrate the bidders' long-term plans for the mine, the second phase of which is waiting to be developed, he added. He did not know how many of the qualifying companies, from the United States, Canada, Japan, Finland, South Africa, Chile, Mexico and Peru, would present bids. An official decree published last weekend said the Economy and Finance Ministry would assume the debt of Minero Peru, estimated at some $ 425 million. Cerro Verde, which latest studies show has 380 million metric tons in reserve and the potential to produce 40,000 tons of copper ore a day, is Minero Peru's second privatization. Late last year, Mantos Blancos, a Chilean subsidiary of Anglo American Corp., acquired the Quellaveco copper deposit for $ 12 million, agreeing to invest up to $ 560 million. Next up after Cerro Verde will be a gold deposit at San Antonio de Poto and the copper refinery at Ilo where Southern Peru Copper Corp. refines its copper into cathodes. Otero said he expected both sales to be completed by year's end. Copyright 1993 Newsday, Inc. Newsday July 14, 1993, Wednesday, CITY EDITION SECTION: VIEWPOINTS; ABOUT THE ENVIRONMENT; Pg. 48 HEADLINE: New Diseases Endanger World Health BYLINE: By Paul R. Epstein. Paul R. Epstein is a doctor at Harvard Medical School and a member of the Harvard School of Public Health Working Group on New and Resurgent Disease. AN EMERGING VIRUS, an obscure toxin and a novel bacterium: Three new diseases are cause for alarm and demand pause for analysis. As if this summer's contaminated water and heatand flood-related deaths were not enough, an altered climate may already be having an impact on the pattern and proliferation of disease. In the Four Corners area of the southwest United States, an unusual viral infection has been confirmed in 12 persons, nine of whom died. It is the likely agent afflicting a total of 32 persons, killing 17 as of June 21, and now its spread into Texas is feared. This family of viruses was first identified in the 1950s, when one strain infected thousands of United Nations military personnel, causing Korean hemmorhagic fever and many fatalities. In the 1980s, this kind of virus was isolated in rodents and in human blood samples in the U.S., but this is the first outbreak of acute illness here. A likely scenario is that when heavy rains followed six years of drought, pine nuts flourished, nourishing rodents. Driven by flooding from their underground burrows, a swollen population of natural hosts enhanced the chance for the virus to thrive and pass on. Whatever the route of entry, changes in the environment and in the balance of predators with deer mouse prey have apparently led to the emergence of a new viral strain. One Navaho chief reflected: "We suffer for our people have lost balance with nature." The Navajo once garnered rainwater from rocky outcroppings to irrigate their fields below; but the landscape has declined from overgrazing, deforestation and desiccation. Large climatological swings and a year of epic storms (remember December, when cars were afloat on the F.D.R. Drive?) may reflect even greater disturbances in earth's natural systems. In Cuba, an epidemic of optic and peripheral neuropathy has affected over 46,000 people. The syndrome is reminscent of previous cases of toxic nerve damage. Some affecting motor function, others the senses, they were first reported in the Caribbean a century ago; arose among malnourished POWs in the Far East during World War II; appeared in Nigeria in the 1960s during a famine; and, in 1981, in droughtand war-stricken Mozambique, where cassava containing cyanide (a natural plant pesticide) was harvested prematurely and cured improperly by malnourished peasants with diminished defenses. In Cuba, where there are growing reports of scurvy and beri-beri, food toxins are the chief suspects, with underlying nutritional deficiencies that retard detoxification. In India and Bangladesh, a new strain of cholera erupted in January. By mid-April this vigorous form of Vibrio cholerae had invaded Calcutta (15,000 cases, leaving 230 dead), and permeated Dhaka (600 new cases per day at its peak). Sea weeds, marine plants and algae harbor cholera bacteria. Nourished by nitrogen-rich wastewater, fertilizers, run-off soil and acid rain, and deprived of effluent cleansing by the development of coastal wetlands ("nature's kidneys"), algal blooms are increasing in magnitude and duration worldwide. In some regions, elevated sea-surface temperatures are shifting the community of organisms toward more toxic species, causing "red tides" and shellfish poisoning. More antibiotic- resistant forms of cholera have emerged, and a chlorine-defiant variant has surfaced in Peru, penetrating poor populations who enjoy little potable water. (Having hitchhiked in the hulls of arriving vessels, another, more familiar form or cholera is now present along the Gulf Coast of the U.S.) Changes in coastal ecology have generated "hot systems," in which mutations are being selected for under new environmental pressures. The new cholera strain has the potential to spread across the globe, and to mature into the agent of a world pandemic. "Epidemics," wrote Dr. Rudolph Virchow, a pathologist and public health activist, in 1948, "are like sign-posts from which the statesman of stature can detect a disturbance in the development of his nation . . . " These three new diseases reflect accelerating climate changes, dietary deterioration in a dwindling economy, and alterations in the world's large marine ecosystems. Our forms of development and terms of trade lie at the core. As felled forests and paper mills foul fisheries, and factories keep fossil fuels inflamed, we fall vulnerable to insults. The intricate web of species threatens to unravel. Financial incentives can redirect our course; removing financial disincentives - the debts owed 'round the world - gets closer to the source. We must not wait for proof of global warming to deduce that ecological changes and economic disparities threaten to cost us our health. The only remedy is to reform our energy, industrial and forestry policies to curb climatic change. GRAPHIC: Photo - Paul R. Epstein Copyright 1993 Reuters Limited The Reuter European Community Report July 13, 1993, Tuesday, BC cycle HEADLINE: EP DEBATES RELATIONS WITH LATAM COUNTRIES EUROPEAN PARLIAMENT SESSION NEWS PRESS RELEASE DOCUMENT DATE: JULY 13, 1993 Relations with countries of Central and Latin America Tuesday, 13 July - Ana Miranda de Lage (S, PES) reported on the proposal to step up relations between the Community and the countries of the Andean Pact, namely Bolivia, Colombia, Ecuador, Peru and Venezuela through what is known as a Framework Cooperation Agreement. This envisages wide ranging cooperation in areas such as trade, economic development, agriculture, the environment, energy and science and technology. According to Mrs Miranda de Lage, the countries concerned were rich in natural resources and committed to improving their economies, but she feared that the overall debt burden of $ 88bn, representing 56% of GDP, provided a major obstacle to development. She hoped that the new agreement would improve confidence and give a new impulse to commercial relations and political dialogue. She stressed the importance of the human rights clause, although she feared that the agreement would simply be another piece of paper if adequate funding was not provided. A similar type of agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama was examined by Karin Junker (G, PES), who also noted the importance of the clause on human rights and democracy. She felt that the agreement could make a contribution to tackling the problems of war, poverty, terrorism and homelessness which had beset the region. Mrs Junker also streessed the importance of opening up EC markets. For Jessica Larive (Nl, LDR) the priorities included improving health, fighting the drugs trade, introducing technology, protecting rain forests, stopping desertification and preserving water resources, while Jan Bertens (Nl, LDR) felt more could be done to tackle the debt problem. Fernando Suarez Gonzalez (S, EPP) feared there would not be peace in these regions unless there was a serious effort to reduce social and economic differences. He felt the financial resources to implement the agreements were not adequate. On the other hand, Rolf Linkohr (G, PES) called for a stabilisation of prices for tropical products to allow these countries to earn hard currency. Replying for the Commission, Padraig Flynn explained that these two agreements were the latest in a series of what are known as third generation agreements which now link the Community with all countries in Central and Latin America with the exception of Cuba. Their main objectives, he said, were to foster economic and social development and to consolidate peace and democracy. The value of EC aid, which reached 145m ECU for each of the two regions last year, was three times the level of aid in the mid 1980s, he added. Among the areas being assisted were refugees, the development of democracy, the fight against drugs and the promotion of trade, said Mr Flynn. Mr Flynn went on to stress the importance of the clauses requiring respect for democratic principles and human rights which would allow the EC to take appropriate action in the event of breaches. The interruption of aid following the recent coup in Guatemala was a case in point, he said. On the question of trade, Mr Flynn said the EC was committed to promoting exports and he mentioned the possibility of the Community extending the current special trade concessions beyond next year. Copyright 1993 Inter Press Service Inter Press Service July 13, 1993, Tuesday HEADLINE: PERU: LIMA RESIDENTS SUFFER FROM POLLUTION-RELATED DISORDERS BYLINE: by Ana Maria Lazo DATELINE: LIMA, July 13 Felipe Sanchez, who has been working for eight years in the centre of Lima, is suffering from a series of physical disorders which have notably taken a toll on his work. The young accountant insists he was in good health until 18 months ago when he began to feel nauseous everytime he took the bus to the centre of the city. "While in the bus, I feel a slight pain in the area of the liver. I also feel nauseous and as the hours pass I feel an insupportable fatigue enveloping my body," Sanchez said. But he said the curious thing was that the symptoms would disappear once he reached home, and medical tests have ruled out anemia or any organic infection. Environmental expert Rosa Silva of the Project for Vigilance of Environmental Pollution (VICON) says Felipe is slowly being poisoned by highly contaminated air in the centre of Lima. "The air which the people of Lima breathe is virtually poisoned due to the toxic gases which have exceeded the normal limits established by the World Health Organisation (WHO)," Silva said. Air pollution causes disorders like asphyxiation of the body, liver and lung problems, decrease in learning capabilities and skin irritability. Lima, which has a total population of eight million, is one of the world's most polluted cities due to its climate, the increase in the number of factories and cars and the lack of green areas. Last year, the Peruvian capital experienced its highest pollution index, said VICON consultant Cesar Nunez. Nunez said that in 1992, the sediments which settled in the centre of the city exceeded 17 tons per sq km. WHO says the the normal deposits should not exceed five tons. Lima's Abancay Avenue, which is one of the capital's main and most polluted highways, has already exceeded the allowable carbon monoxide percentage recommended by WHO. Environmental expert Felix Cuba warns that the quantity of carbon monoxide registered in Lima's highways is enough to close the streets to traffic in other cities. But the biggest concentration of toxic gases is found in Lima's northern outskirts, where more than two million Peruvians live in the poor districts. Air currents from the south deposit toxic gases from the industrial heart of the capital in the northern area, which experts say has about 26 tons of sedimentation per sq km -- 21 times more than the safe limit established by the WHO. Cuba says more than 40 percent of the city's industrial activities would have to be relocated to areas away from the wind currents in order to solve the worsening problem. He also recommends that the government review the routing of public transport, implemented two years ago, which has resulted in a vehicular chaos in streets designed for horse-drawn coaches. In the first half of 1993, the number of cars increased considerably due to the importation of new and used vehicles. Now almost 20,000 public vehicles ply the Lima routes daily, and about 65 percent of the cars date back to 1970 or even before. The lack green parks has also aggravated the problem, Cuba warns. He said the capital requires more than 2.9 billion hectares of green areas to purify the air. At present, it only has 1,400 hectares. The European-Community sponsored VICON project has already recommended that Peruvian authorities improve the quality of air. But so far, they have not done anything, Cuba said. Copyright 1993 The New York Times Company: Abstracts AUTH: BY DOREEN GILLESPIE TITL: PERU TO PRIVATIZE 8 FIRMS IN 1993; EXPECTS TO RAISE AT LEAST $1.2 BILLION REFR: JOURNAL OF COMMERCE Section A; Page 3, Column 2 JOURNAL-CODE JCM DATE: July 13, 1993, Tuesday ABST: Peruvian Government aims to privatize eight state-owned firms in 1993 including copper firm Cerro Verde, and telecommunications providers Entel Peru and Compania Peruana de Telefonos; anticipates income of a minimum $1.2 billion from sales (M) Copyright 1993 Reuters, Limited The Reuter Library Report July 13, 1993, Tuesday, BC cycle HEADLINE: CANADA BECOMES FIRST NATION TO SIGN ADOPTION PACT WITH PERU DATELINE: LIMA, July 13 Canada has become the first country to sign an accord with Peru aimed at avoiding corruption and trafficking in the adoption of Peruvian children, a Canadian embassy official said on Tuesday. Canada informed Peru of its interest in the agreement after the Peruvian government decreed a law last year giving the state a larger role in overseeing the adoption process, Canadian consul Michel Vermette said. ''They (the Peruvians) are trying to clean up the whole process by eliminating corruption, assuring (that) the children have really been abandoned and avoiding cases in which children to be adopted have been sold,'' he told Reuters. Canadian ambassador James Leach and officials of Peru's National Institute of Family Welfare (INABIT) initialed the agreement, which provides for a three-year followup process of the adopted children, during a ceremony on Monday. INABIT director Ana Kanashiro said she expected other countries like the United States and France to follow suit. Vermette said at least two Canadian couples had encountered serious problems while adopting children here, leading the embassy to take the initiative in becoming the first country to sign such an accord. Hundreds of foreign couples come each year to this impoverished Andean nation to adopt children but they often encounter bureaucratic delays and a corrupt judicial system. Copyright 1993 The New York Times Company: Abstracts AUTH: BY DOREEN GILLESPIE TITL: PERU TO PRIVATIZE 8 FIRMS IN 1993; EXPECTS TO RAISE AT LEAST $1.2 BILLION REFR: JOURNAL OF COMMERCE Section A; Page 3, Column 2 JOURNAL-CODE JCM DATE: July 13, 1993, Tuesday ABST: Peruvian Government aims to privatize eight state-owned firms in 1993 including copper firm Cerro Verde, and telecommunications providers Entel Peru and Compania Peruana de Telefonos; anticipates income of a minimum $1.2 billion from sales (M) Copyright 1993 News World Communications, Inc. The Washington Times July 13, 1993, Tuesday, Final Edition SECTION: Part A; WORLD; Pg. A7 HEADLINE: Legal, illegal firms share Peru jungle ; Mayor gunned down? 'Truth is you get a bit jaded to that sort of thing' BYLINE: Lawrence Jay Speer; SPECIAL TO THE WASHINGTON TIMES DATELINE: PALMAS DEL ESPINO PLANTATION, PERU PALMAS DEL ESPINO PLANTATION, Peru - Maoist guerrillas recently gunned down the mayor of a nearby village, but managers at this palm oil plantation in the heart of the world's coca-growing region saw the incident as simply business as usual. "I've been working in the most dangerous neighborhood in the world for eight years," said Jorge Galvan, production manager for Palmas del Espino S.A., "and the truth is, you become a bit jaded to that sort of thing." A group of heavily armed ex-marine commandos flags Mr. Galvan down as he drives the dirt road grids crisscrossing the 11,000-acre African palm tree plantation. "Having this kind of security is the only way we can live out here," Mr. Galvan says, handing over his identification card to a combat fatigue-clad guard. "If you're going to do business in the Upper Huallaga Valley, there simply isn't a choice." According to U.S. Embassy officials in Lima, Peru's Upper Huallaga Valley produces nearly two-thirds of the world supply of raw coca, the main ingredient in the production of cocaine. Violent trafficking organizations and the Maoist-influenced Sendero Luminoso (Shining Path) guerrilla movement have taken advantage of the drug trade to turn the valley - which is more than twice the size of Maryland - into a killing field. It is a level of danger that has kept business away for more than 10 years, with the exception of the four-factory Palmas del Espino complex. The $55 million project - run by Grupo Romero, one of Peru's top family business concerns with banking, industrial and agricultural holdings nationwide - is testimony to the adage that anything is possible if there's money to be made. "When we started this project in 1979, terrorism and drug trafficking had yet to appear in the Huallaga Valley," said Palmas del Espino commercial manager Francisco Saldana, who oversees sales and marketing from an office in Lima 350 miles to the west. "We thought the area would be perfect for an African palm plantation: the soil was rich, the climate was right and there were no tenant farmers to compete with - it was virgin jungle then." Thanks to former President Fernando Belaunde's penchant for opening large jungle tracts to development, the push into Peru's last frontier was then seen as the fulfillment of the search for El Dorado, the mythical city of gold that had eluded the Spanish conquistadores nearly 500 years ago. When Grupo Romero's agro-industrial experts teamed up with the number crunchers to form the working plan for Palmas del Espino, it was as if a group of modern-day conquistadores had discovered a new El Dorado: cooking oil. Aided by the low cost of agricultural labor here and a series of convenient financing arrangements - $24 million was underwritten by the World Bank, the Inter-American Development Bank and other international financial houses - more than 4,800 acres were planted by 1984. The bubble burst in July 1984, when Shining Path militants invaded the as-yet-defenseless complex, destroying an unfinished camp, most of the heavy machinery on-site and parts of the plantation itself. Total cost of the one-day rampage: $1.5 million. The Shining Path invasion carried a political message, Mr. Saldana said. "Essentially they demanded that this project be stopped." But Grupo Romero officials would hear nothing of it, calling on the army and their own security forces to "create a safe haven for doing business. . . . We couldn't just back out and swallow our losses with more than $12 million invested," Mr. Saldana said. Since 1984 Palmas has spent more than $1 million annually on security, although construction of the U.S.-led Santa Lucia anti-narcotics base just miles from the factory has lowered costs of late. "The base has pushed the drugs and the terrorism further north," said Mr. Galvan, the production manager. "They still grow coca everywhere, but at least it's a bit safer to do business here now," he said, noting the irony of an $11 million U.S. anti-drug base easing his security worries. The company's biggest problem today, according to Mr. Galvan, is getting its 25,000 tons of oil to market. Terrorists have repeatedly attacked Palmas del Espino's trucks during the 26-hour trip to Lima, usually demanding money, but at times simply destroying the shipments or the vehicle itself. GRAPHIC: Photo, A worker, using a machete attached to a 20-foot-long pole, harvests palm fruit in the thick jungle of Peru's Palmas del Espino plantation., By Lawrence J. Speer/The Washington Times Copyright 1993 Extel Financial Limited Regulatory News Service July 12, 1993, Monday SECTION: Company News HEADLINE: Anglo Am.Corp SA - Chairman's Statement 1993 CHAIRMAN'S STATEMENT 1993 [deleted] The changes taking place in South Africa and in much of the world beyond us have widended the Corporation's horizons, offering the prospect of a challenging, dynamic period of renewed growth. To have the opportunity of discussing our plans, as well as certain public issues, principally competition policy, unbundling, and black empowerment. I intend this year to comment but briefly on the Corporation's results, which for your convenience are summarised overleaf. In essence, they shown that despite a further period of near-stagnation in world economic activity and trade, and the severity of the South African recession, our equity accounted earnings declined by no more than five per cent to R2 461 million in the year to 31 March 1993, and we were able to maintain the dividend at 345 cents a share. That says much for the basic strength and resilience of the Corporation's core investments, and for the logic of their product and geographical diversity. Implicit in those results is something I wish to make explicit from the outset-the determined and successful efforts of our employees in all branches of our group in containing costs and meeting in other ways the challenge of these very difficult times. On behalf of the board, I congratulate them. I turn now to our plans for expansions and further diversification, so as to maximise profit potential in good times whilst enhancing our resistance to adversity. The final rejection of apartheld and the now irreversible progress toward multi-party, democratic government are opening doors to South African business in terms of projects, access to technology and multi-source funding. Opportunities in African and other developing countries are occuring not simply as a result of political changes here; they are also the consequence Since my last statement the R1 billion Venetia diamond mine and the R750 million Landau coal replacement project have both been formally opened, leaving a further six major ventures actively in hand. To take the international projects first, one set is being pursued in South America and concerns Anglo American Corporation of South America (AMSA), which has grown into a smaller version of Anglo American itself, with assets in excess of US$ 1 billion, AMSA well illustrates, I think, the adaptability of the group to a distinctly different business environment and culture. We in Johannesburg have seen our role primarily as supportive, leaving to local initiative the selection of partners and identification of suitable projects. The management is multi-national, drawing on South African administrative and technical skills no more than necessary. Financially, AMSA has stood largely on its own feet from the beginning, and to have financed its growth from its own and other internal sources have been no small achievement given the infiationary conditions prevailing. The Mantos Blancos mining company, which is listed on the Santiago stock exchange, and in which AMSA holds 75 per cent, has four copper projects in hand, three in Chile and one in peru. At its Mantos Blancos operation north-east of Antofagasta, the life will be lengthened and production maintained in excess of the current 70,000 tons of copper a year by establishing a single large open pit from which almost all the oxide and sulphide ores will be mined. Well south of Antofagasta is the Mantoverde deposit, which was significantly extended by the work of our own geologists. Now owned by the Mantos Blancos, it consists of about 80 million tons of oxide ore averaging 0.83 per cent copper. Assuming the feasibility study is positive, production should start in 1995, building up to a rate of 40 000 tons of cathodes a year. The third project, Collahuasi, is held as to one-third each by Billiton/Royal Dutch Shell, Falconbridge, and Compania Minera Mantos Minorco, which is jointly owned by Mantos Blancos and Minorco. Collahuasi could become one of the most important copper projects to be developed in the 1990s, with a possible output of over 300 000 tons of copper a year. It will be an open pit operation with a life of at least 40 years, and mining could start in 1997/98. Mantos Blancos purchased outright the Quellaveco copper deposit in the south of Peru. It is our first direct investment in the country, and we have now taken into partnership the International Finance Corporation, an affiliate of the World Bank, with a holding of 20 per cent. Reserves of 268 million tons averaging 0.85 per cent copper lend themselves to open pit mining. Test work is being carried out prior to the feasibility study. [deleted] Copyright 1993 The Atlanta Constitution The Atlanta Journal and Constitution July 12, 1993 SECTION: FOREIGN NEWS; Section A; Page 8 HEADLINE: Peru: Stay put and be counted A Peruvian soldier guards a bridge in Lima on Sunday as 350,000 volunteers conducted the first census in 12 years. The government ordered residents of the chaotic capital to stay indoors as it gathered information on needed services. /Associated Press GRAPHIC: Stand alone photo of a Peruvian soldier guarding a bridge in Lima Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts/The Monitoring Report July 12, 1993, Monday SECTION: Part 4 The Middle East, Africa and Latin America; 4(D). LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1738/III HEADLINE: Peru: state of emergency extended in Apurimac The government had extended the state of emergency in Apurimac Department for 60 days "to maintain public order", Radioprogramas del Peru (Lima) reported on 9th July. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts/The Monitoring Report July 12, 1993, Monday SECTION: Part 4 The Middle East, Africa and Latin America; 4(D). LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1738/III HEADLINE: Peru: four MRTA "leaders" presented to the media Four Tupac Amaru Revolutionary Movement (MRTA) "leaders", who had "turned themselves in to take advantage of the Repentance Law", were presented to the media in Tarapoto on 9th July, Television Global (Lima) reported, noting that one of them, Andres Mendoza del Aguila - alias Comrade Grillo - had "held the highest position within the north-eastern front of that subversive organisation". Copyright 1993 Agence France Presse Agence France Presse July 12, 1993 SECTION: News HEADLINE: Peru investigates cases of 100 missing students DATELINE: LIMA LIMA, July 11 (AFP) - Peru's attorney general is aiding investigations into the cases of some 100 students who have disappeared in Junin province, a legal source said Sunday. Attorney General Blanca Nelida Colan met Saturday with security and justice ministry officials in Junin province where an estimated 100 high- school and university students have gone missing since 1991, the source said. In many instances the students are believed to have been murdered, either by leftwing rebels or government forces. This year, more than 70 high-school students, male and female, have disappeared, apparently kidnapped by paramilitary gangs, said relatives of the victims. Copyright 1993 Chicago Tribune Company Chicago Tribune July 12, 1993, Monday, NORTH SPORTS FINAL EDITION SECTION: NEWS; Pg. 3; ZONE: N GRAPHIC: PHOTO: Census time in Peru: Peruvian Indian chief Shipibo is interviewed by a census taker Sunday in Lima. To carry out the census, the government had to shut down Lima, a city of 7 million people. It is Peru's first census in 12 years. The count is considered vital to the government's bid to restore order in a nation devastated by guerrilla war and economic crisis. Reuters photo. Copyright 1993 The Dallas Morning News THE DALLAS MORNING NEWS July 12, 1993, Monday, HOME FINAL EDITION SECTION: NEWS; Pg. 8A HEADLINE: Census for Peru A census worker takes down details of the Texigua family Sunday in Susana Higushi, a shantytown on the outskirts of Lima, Peru. The government virtually shut down Lima for the count, part of an effort to restore order from guerrilla warfare and provide basic necessities to the 11 million Peruvians without them. GRAPHIC: PHOTO(S): A census worker takes down details of the Texigua family Sunday in Susana Higushi, a shantytown on the outskirts of Lima, Peru. The government virtually shut down Lima for the count, part of an effort to restore order from guerrilla warfare and provide basic necessities to the 11 million Peruvians without them. (Associated Press) Copyright 1993 Reuters, Limited The Reuter Library Report July 12, 1993, Monday, BC cycle HEADLINE: MAOIST GUERRILLAS KILL 13 IN ATTACK IN RURAL PERU DATELINE: AYACUCHO, Peru, July 12 Shining Path guerrillas attacked a remote hamlet in southeastern Peru, killing 13 people and wounding several others in the biggest guerrilla attack in the region this year, officials and witnesses said on Sunday. About 20 guerrillas armed with machine guns, machetes and other weapons entered the town of Matucana Alta in Huanta province, some 400 kms (240 miles) southeast of Lima on Saturday night, they said. The guerrillas overwhelmed the local defence militia with their superior firepower, leaving 13 of the town's residents dead and several others wounded. The victims included three children. Three of the wounded were evacuated to hospital in the departmental capital of Ayacucho, some 180 kms (100 miles) to the south, officials said. The attack was the biggest in the region since guerrillas killed 47 residents in the community of Huayallo last October. More than 27,000 people have died in political violence in Peru since the Shining Path took up arms in Ayacucho in 1980. Copyright 1993 Reuters, Limited July 12, 1993, Monday, BC cycle SECTION: Financial Report. Canadian Financial Report. HEADLINE: CAMBIOR SIGNS JOINT VENTURE IN PERU DATELINE: MONTREAL, JULY 12 Cambior Inc said it will form a joint venture with Southwestern Gold Corp on Southwestern's Cristo Rey, Abancay Regional and other projects in Peru. The Cristo Rey project is 100 percent owned by Southwestern and is located about 95 km southwest of Cuzco. Cambior will buy a 60 percent undivided interest in Cristo Rey for a total of C$5.0 million over four years, will fund a feasibility study and will provide financing to bring the property into commercial production. The companies also committed to the Abancay Regional Project, a US $2.0 million regional exploration program, on a 50/50 basis. Cambior also has the first right to carry out due diligence on Southwestern's seven other 100 percent owned properties in the Abancay regional project area. Cambior will have the right to earn a minimum 51 percent undivided interest in each property. The companies are also negotiating to acquire other property interests in Peru. Copyright 1993 Reuters, Limited July 12, 1993, Monday, BC cycle SECTION: Bonds Capital Market. HEADLINE: GOVERNMENT TO ASSUME MINERO PERU'S DEBT Minero Peru has debt of about $425 mln, including principal and interest, company officials said. About half was restructured in talks with the Paris Club in early May. Minero Peru is due to sell off the Cerro Verde copper mine in late August or early September. At least 14 foreign firms or Peruvian-based subidiaries of major international mining companies have expressed interest. After Cerro Verde, Minero Peru will proceed with the privatization of its copper refinery at Ilo and, later, Peru's Cajamarquilla zinc refinery, the officials said. Copyright 1993 Reuters, Limited July 12, 1993, Monday, BC cycle SECTION: Bonds Capital Market. Financial Report. HEADLINE: TWELVE BANKS INVITED TO PROMOTE PERU BANK Hidalgo said Interbanc, recently ranked fourth in Peru with 8.1 pct of total deposits, would be the first bank sold off, probably by year-end. Continental, ranked third with 15.3 pct of total deposits, will be privatized in the first half of 1994 after the committee obtains authorization to delay the sale, Hidalgo said. Copyright 1993 Agence France Presse Agence France Presse July 11, 1993 SECTION: News HEADLINE: Amnesty International to help Peru investigate mass graves DATELINE: LIMA LIMA, July 10 (AFP) - Amnesty International will help Peru identify the charred remains of at least three people found in common graves in Lima, Roger Caceres, head of the legislature's Human Rights Commission said Saturday. Press reports have speculated the remains found in a ravine Thursday may be those of nine students and one professor who disappeared in a military raid at La Cantuta University in Lima on July 18, 1992. "The presence of a high level Amnesty International team in Lima means we will have first rate scientific support," the opposition legislator said. The bodies are to be identified by pathologists with the Legal Defense Institute in Lima. Copyright 1993 Chicago Tribune Company Chicago Tribune July 11, 1993, Sunday, FINAL EDITION SECTION: NEWS; Pg. 21; ZONE: C HEADLINE: Peru orders curfew so it can start national census BYLINE: Associated Press DATELINE: LIMA, Peru The government will try to freeze-frame this chaotic capital of about 7 million people Sunday at the start of an all-out effort to find out just how many Peruvians there are. From 8 a.m. to 5 p.m., a curfew enforced by the military will keep Peruvians indoors in Lima and all other major urban centers, close all businesses and keep buses and taxis off the streets. International flights in and out of Peru will continue as normal. The only vehicles on the streets of Lima and other big cities on Sunday will be military patrols and emergency services like firefighters and ambulances. Then, over the next two weeks, about 350,000 volunteers in red-and- white baseball caps will make their way down jungle rivers by canoe, and by mule across the Andes to check on remote communities never before counted. The census, the first in 12 years, is considered vital to the government's bid to restore order in this Andean nation devastated by guerrilla war and economic turmoil. "There are no accurate statistics on employment or education, health or housing," said Felix Murillo, head of the National Institute of Statistics and Information, which is coordinating the census. "How we can we tackle Peru's problems if we don't know how many we are or where we are?" The census took four years to plan at a cost of $12 million. The data will help the government decide where to put schools, health posts, roads, housing projects. The first results are expected in two months and the full report is to be published next year. Murillo hopes it will reveal who needs running water, electricity and sewage outlets. World Health Organization figures show half of Peru's estimated 22 million people lack such services. The last census in 1981 counted 17.7 million Peruvians, 4.6 million in Lima. Nearly half the 5.7 million work force had jobs. Today, at least 80 percent of the work force of 7 million are unemployed. Experts say the results will show how Peru has changed since the Maoist Shining Path insurgency began in 1980. The war claimed nearly 30,000 lives and caused $22 billion in economic damage. More than 600,000 refugees have fled the countryside for the safer cities since 1980, says Carlos Tapia, an expert on political violence and migration. Some say the measures the government is taking to make sure people will stay still and be counted are too extreme. "The census is a national necessity, but I disagree with banning people from leaving home even after being counted," said economist Graciela Fernandez-Baca, who carried out the last census. Copyright 1993 Reuters, Limited The Reuter Library Report July 11, 1993, Sunday, BC cycle HEADLINE: PRO-CUBAN REBELS KIDNAP OF PERUVIAN BUSINESSMAN DATELINE: LIMA, July 11 Guerrillas of the pro-Cuban Tupac Amaru Revolutionary Movement (MRTA) were responsible for kidnapping a Peruvian businessman of Japanese descent and killing his bodyguard, police said on Sunday. A special brigade, comprised of members of the National Police and Peru's intelligence service, has been formed to investigate the kidnapping late on Friday of Raul Hiraoka Torres, son of the owner of the Hiraoka chain of import stores, a police spokesman said. Meanwhile, police sources quoted by El Comercio newspaper reported Hiraoka's family had received a phone call in which the caller said 10 MRTA guerrillas in two trucks had abducted Hiraoka after blocking his vehicle as he drove on a street in the San Isidro district of Lima. The family has declined to comment on the case. Hiraoka's bodyguard, Miguel Sandolval was killed during the incident and another store employee was slightly injured, police said. The MRTA, which Peru's government says is in disarray after the capture of its principal leaders and surrender of hundreds of armed militants, have kidnapped and killed two businessmen this year, one of whom was also of Japanese descent. Since 1985, three other businessmen of Japanese descent have been kidnapped by the MRTA but were later released. Copyright 1993 The New York Times Company The New York Times July 11, 1993, Sunday, Late Edition - Final SECTION: Section 3; Page 5; Column 1; Financial Desk HEADLINE: Latin America's Oil Rush: Tapping Into Foreign Investors BYLINE: By JAMES BROOKE DATELINE: BRASILIA LONG a crusty redoubt of nationalism, the Latin American oil industry is quietly opening to a flood of foreign investment. In late June, attention focused briefly on the successful privatization of Argentina's state oil company, YPF S.A. But beyond that sale is a broad movement in the region to attract foreign oil capital and technology. "Oil nationalism was born in Latin America, so it is quite a turnaround," said Daniel Yergin, president of Cambridge Energy Research Associates, a consulting firm in Cambridge, Mass. "There is no question that Latin America is becoming a real hot spot for oil and gas investment and exploration." Just how hot can be judged by the crowded waiting room outside the office of the new president of Petroperu, Emilio Zuniga. "I have been in this job for three weeks, and I already have received representatives of 23 foreign oil companies interested in investing in Peru, " said Mr. Zuniga in an interview in late June. By the end of next year, Petroperu, Peru's largest state company, is to be sold to foreign investors. The investors are lining up throughout the region for a variety of reasons. Some want to diversify their portfolios away from the politically unstable Middle East. For American companies, transportation to the United States is generally quicker and cheaper from Latin America than from the Persian Gulf and environmental standards are generally less stringent than in the United States. And, finally, the oil is here. Latin America led the world in oil discoveries from 1982 to 1991, according to a recent survey of the region except for Mexico by Petroconsultants S.A., a Geneva-based firm. During that period, companies found 29.7 billion barrels of light, medium and heavy grades of oil in Latin America, or 35 percent of world discoveries. Overall, proven reserves in Latin America and the Caribbean come to 123 billion barrels, five times the level of United States reserves. Yet in many countries in the region, the legacy of years of oil nationalism is declining production. Short of capital and modern technology, officials of state oil companies increasingly see the value of partnerships. "The silent confrontation of the 1960's and 70's between North America and South America has eased greatly," said Gabriel Sanchez Sierra, secretary general of the Latin-American Energy Organization, an intergovernmental group in Quito, Ecuador. The opportunities in the region range from huge privatizations like the one involving YPF to equally ambitious joint production ventures and construction contracts. Still, despite the oil rush atmosphere, obstacles remain. Bucking regional trends toward free markets and capitalist development, anti-American feelings linger in some corners. And Marxist guerrilla groups in Peru and Colombia continue to target foreign oil interests. What's more, oil companies seeking to escape tight environmental restrictions will discover that Latin American countries are tightening traditionally lax enforcement of environmental laws. What follows is a snapshot of industry changes in five key Latin countries. Venezuela Unlike Argentina's wholesale privatization, Venezuela offers what will most likely be the oil policy prototype for Latin America in the 90's -- foreign companies nibbling at the edges of a state monopoly. In the case of Venezuela, the edges are juicy. Last year, for the first time since the oil industry was nationalized in 1976, Venezuela signed agreements with foreign companies to produce oil. Next month, in a second round of bidding, 80 foreign companies will be vying to reactivate production in old fields, with reserves totaling 1.7 billion barrels. Venezuela hopes to see $40 billion invested in the oil sector by the end of the decade, according to Gustavo Roosen, president of Petroleos de Venezuela S.A., the state oil company. Short on capital, the company plans to invest $22 billion. The remaining $18 billion is to come from joint ventures, including $10.4 billion in deals expected to be approved by year- end. "We're convinced that strategic associations -- that is, partnerships with international companies -- are a far better alternative than indebtedness," Mr. Roosen said. In the largest project, Exxon, Mitsubishi and Royal Dutch/Shell would join Petroleos de Venezuela to convert natural gas into liquefied natural gas for export to the United States. In two other projects, the state company would work with Total S.A. of France, Itochu of Japan and Conoco Inc., a unit of E. I. du Pont de Nemours. Mexico With national control of the oil industry exerting an almost mystical hold over Mexican politics, officials in Latin America's second-largest oil- producing nation maintain a strong nationalist front. "Ownership and control of oil will remain unalterably in the hands of Mexicans," President Carlos Salinas de Gortari said last March in a speech marking the 55th anniversary of the expropriation of foreign oil companies in Mexico. But the monopoly is loosening slightly. Next year, Petroleos Mexicanos, or Pemex, plans to start selling some of its 60 petrochemical plants. In other departures, foreign companies are financing a $1.4 billion refinery and have started drilling dozens of offshore oil wells. Pemex will lease the refinery and wells until construction costs are repaid. Colombia Buoyed by a sea of oil that represents the largest find in the Americas since the discovery in Alaska's Prudhoe Bay in 1968, Colombia is embarking on an oil boom that could lead it to rival Mexico as a major source of imported oil for the United States. The new find is Cusiana, a field of 2 billion barrels of low-sulfur oil that officially started pumping June 29. Half the oil is to go to Ecopetrol, Colombia's state company, and the rest is being divided among three foreign partners: British Petroleum, Total and the Triton Energy Corporation of Dallas. To raise production to 600,000 barrels a day by 1997, the four companies are to invest $7 billion. In a measure of foreign confidence in the field, Ecopetrol successfully offered a $150 million Eurobond issue in late June, the first ever for a Colombian company. With only one third of Colombia's oil-bearing area explored, Ecopetrol will accept a new round of exploration bids in October. So far, the state company has 86 joint ventures with foreign companies But while Colombia's guerrillas believe the Government is giving away the nation's riches, many foreign oil companies complain that the Government is driving such hard bargains that it may kill the golden goose. "Other countries are offering more attractive economic conditions," Stephen Newton, president of Occidental of Colombia, said in a recent interview with a Colombian newsweekly, El Corredor. For every barrel of oil pumped by Occidental, he said, 87 percent of revenues over operating costs go to Colombia in the form of royalties, taxes and production sharing with Ecopetrol. Brazil Latin America's largest nation has the region's most conservative oil policies. With the exception of foreign-owned gas stations, the entire oil sector is a Government monopoly. But, in contrast to Mexico and Venezuela, Brazil imports about half of its oil. Petrobras, the state oil company, has little hope of reaching an often stated goal of rendering Brazil self-sufficient in oil in the 90's. To hold down inflation, politicians routinely depress domestic gasoline prices. Since 1980, this policy has deprived Petrobras of $25 billion. Capital expenditures are now almost half the level of a decade ago, and 200 development plans are sitting on shelves. Focusing on the Achilles heel of oil imports, Shell is coordinating a business group to lobby Brazil's Congress to loosen the oil monopoly. The move is well timed: starting in October, Congress will have the authority, by simple majority vote, to amend the nation's Constitution, which prohibits foreign investment in the industry. No amendments are now permitted. A recent survey found that just 40 percent of members of Congress favor keeping the state monopoly intact. Until the laws change, the only major area open to foreign participation is a $2 billion, 2,100-mile gas pipeline that is to be built from fields in eastern Bolivia, which hold six trillion cubic feet of natural gas, to Brazil's "industrial triangle" -- the cities of Sao Paulo, Rio de Janeiro and Belo Horizonte. Tenneco and British Gas have shown interest in forming a consortium to construct the pipeline and thermo-electrical plants along the route. Pressuring Brazil to open the monopoly, multilateral lenders like the World Bank and the Interamerican Development Bank have indicated that they will not help finance the gas line if the project remains under Petrobras majority control. Peru One of the most radical turnarounds in Latin America's oil patch is in Peru. With nationalizations in the 70's and legal tangles in the 80's, Peru made it clear that foreign oil companies were not welcome. Paying a price for hostility, Peruvians watched production and proven reserves drop in half during the 80's. By 1987, Peru, once an exporter, had started importing crude oil. The turnaround came after Alberto K. Fujimori, a free-market pragmatist, became President in 1990. He immediately worked to create a pro-business environment by cutting Government controls and adopting one of Latin America's most liberal foreign investment codes. Since 1990, 14 foreign oil companies have signed exploration or production contracts and 14 more are expected to sign by the end of this year. "Foreign companies are waiting in line," said Roger Alderson, general manager for Simon Petroleum Technology, part of an American consortium that signed an offshore exploration contract last month. Further whetting foreign interest, Peru's Congress is expected to approve an oil investment bill this month that provides for international arbitration of disputes and a stable tax regime, among other things. And the Government plans to privatize Petroperu. " Peru is now one of Latin America's most attractive nations in the oil sector," said Mr. Sanchez of the Latin-American Energy Organization. GRAPHIC: Photo: British Petroleum workers in Cusiana, Colombia's 2 billion-barrel field. (Sarita Kendall) Maps of South America showing countries with proven oil reserves and their production (Sources: Latin American Energy Organization) Copyright 1993 Reuters, Limited July 11, 1993, Sunday, BC cycle HEADLINE: PERU VIRTUALLY STOPS IN TRACKS TO TAKE CENSUS BYLINE: By Mary Powers' DATELINE: LIMA, Peru Peru virtually froze in its tracks for eight hours Sunday as its citizens were confined to their homes waiting for some 300,000 census takers to ask them about who they are and where they live. This normally bustling capital looked like a ghost town as an "immobility order" took effect from 8 a.m. to 5 p.m. to allow the Institute of Statistics and Information (INEI) to conduct Peru's Ninth Population and Fourth Housing census. Census takers spread out over cities, towns and villages of more than 100 homes as citizens were warned violators of the immobility order would be placed under arrest for 24 hours. Lima's Paseo de la Republica thoroughfare, usually clogged with buses, minivans and cars, was deserted except for the occasional military patrol truck or other authorized vehicle. "Everyone is participating with civic spirit, staying in their homes and giving the information required," said President Alberto Fujimori on a visit to a poor section of central Lima. Police reported isolated incidents of citizens who were moving about without authorization in some parts of the capital but in general Peruvians seemed to take the measure in stride. "It doesn't bother me. I worked for 25 years and recently retired so I'm a real home body now," said Olga Delgado who lives in an apartment house in the San Isidro district. INEI officials said the measure was designed at preventing the failure to count hundreds of thousands of Peruvians as happened in the last national head count in 1981. Juan Maldonado, leader of shipibi indians of the northeast Amazon region, said: "For us, as indigenous people, this census is historic because it is the first time the governmment will take into account our needs and ways to solve them." The census in the jungle and remote highland areas, to be conducted in the native languages of the area and to include a special questionnaire on the needs of those communities, will begin on Monday and last through July 26, the INEI said. INEI chief Felix Murillo said thousands of leftist guerrillas held in jails around Peru, including Shining Path chief Abimael Guzman, would be counted but not interviewed. INEI officials estimate that this census will count some 23,000,000 Peruvians and will register sharp shifts from rural to urban areas because of economic hardship and a 12-year war by Shining Path guerrillas in the countryside. Results are expected early next year. Copyright 1993 News World Communications, Inc. The Washington Times July 11, 1993, Sunday, Final Edition SECTION: Part A; WORLD; AROUND THE WORLD; Pg. A8 HEADLINE: Two slain tourists found in Peru BYLINE: FROM WIRE DISPATCHES AND STAFF REPORTS DATELINE: LIMA, PERU The bodies of a Swiss man and an Austrian woman missing since May and apparently killed by guerrillas have been found in the Andean highlands. Denis Masserey, 27, of Switzerland and Nicolette Huber, 22, of Austria were found Wednesday near a lake in Lucanas province about 270 miles southeast of Lima, a police report said. Their bodies showed "signs of torture by presumed terrorist delinquents," the report said, an apparent reference to Maoist Shining Path guerrillas who operate in the area near the towns of Nazca and Puquio.