Date: Sun, 8 Aug 1993 22:20:54 -0700 (PDT) Subject: News: Aug 6-9 (92 KB) Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 11, 1993, Wednesday SECTION: Part 3 The Far East; Weekly Economic Report; ENERGY; ENERGY - OVERSEAS INVESTMENT PAGE: FE/W0294/A HEADLINE: Petroleum company opens office in Singapore SOURCE: New China news agency in English 1532 gmt 20 Jul 93 China Star Private Ltd, the first subsidiary of China Petroleum Technology Development Corporation (CPTDC) to be set up in the Asia- Pacific region, established an office in Singapore on 20th July. China Star has been set up to explore opportunities in the Asia-Pacific region and the Middle East, Xia Peiqing, president of CPTDC, said at the opening ceremony. CPTDC has subordinate companies and offices in Hong Kong, Houston and Los Angeles, Moscow and Peru. The company had a trade volume for 1992 of 1.1bn US dollars. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 10, 1993, Tuesday SECTION: Part 4 The Middle East, Africa and Latin America; Weekly Economic Report; paraguay - venezuela PAGE: ME/W0294/A3 HEADLINE: PERU; Inflation rate figures SOURCE: Television Global, Lima 0100 gmt 3 Aug 93 Inflation went up 2.7% in July. The 0.9% increase in comparison with June was due mostly to increases in public transport fares, the telephone service, potable water, fuel and food. Inflation stands at 48.9% for the last 12 months and at 26.6% so far in 1993. A 1% rate has already been recorded for the first two days of August. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 10, 1993, Tuesday SECTION: Part 4 The Middle East, Africa and Latin America; Weekly Economic Report; paraguay - venezuela PAGE: ME/W0294/A3 HEADLINE: PERU; Environmental group created SOURCE: Television Panamericana, Lima 1200 gmt 2 Aug 93 On 29th July a group was formed to defend the environment and the inviolability of areas in the Rimac, Chio and Lurin Valleys. In Lima there are 11,000 ha of agricultural land that have become the single source of income for 9,000 peasant families. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 9, 1993, Monday SECTION: Part 4 The Middle East, Africa and Latin America; D. LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1762/D HEADLINE: BOLIVIA; OUTGOING PRESIDENT'S ADDRESS AT CEREMONY TO INAUGURATE HIS SUCCESSOR SOURCE: Television Nacional, La Paz 1931 gmt 6 Aug 93 Excerpts from relay of speech by outgoing President Jaime Paz Zamora during inauguration ceremony for his successor, Gonzalo Sanchez de Lozada, at the Congress building in La Paz . . . In these eleven years of democracy Bolivia has changed its course. We were as close to collapse as a nation could be, and we realised we had to take a new course. Faced with the most shameful dictatorship in Bolivian history, with the main institutions destroyed and with the economy out of control, our country seemed to have lost the course of its destiny. The international community could hardly conceal its pessimism over the recuperation of a country with chronic political instability, accumulated backwardness and apparently unsurmountable limitations. With their own efforts, in peace, and with full respect for the rules of the democratic game, the Bolivian people faced challenges that were perhaps more difficult than those faced by other Latin American nations. [Passage indistinct] Dr Hernan Siles Suazo opened the transition towards democratic institutional life. The government of Dr. Paz Estenssoro defeated (?improvisation). The presidential term that is now over has promoted, on the basis of consensus, structural change and the reform and modernisation of the state, restoring economic growth. The country needed a long decade to move forward, but it finally attained its main objectives. That is why today we can look at the past and see that the worst is over, that even though Bolivia remains a developing country with big obstacles to overcome, it is no longer a nation in crisis, a nation that cannot control its own imbalances. We can say that the efforts of three consecutive government terms have concluded the political and economic transition. We can say that the Bolivia of today has a sound democracy that is backed by the people's unequivocal will. We can say that Bolivia has a national project under implementation, that it has a healthy economy, that Bolivia is a feasible country. . . Legislators, concerning legislation, I want to reflect briefly on the problem of corruption. In one way or another corruption is currently a universal phenomena in the public life of states. To speak the truth, it has always existed, because the temptation of corruption is part of the human condition. It is so to the extreme that St Paul asserted in his letter to the Romans that, quote, within my nature of sinful man I do not do the good things I want to do, but the bad things I do not want to do, unquote. During my administration corruption has appeared repeatedly, and I attempted to combat it with the existing resources, but I must confess not always with the success I wanted. In Bolivia we have always coexisted with this scourge. There is currently no more corruption than in the past, but there is more democracy to bring corruption to light, there is more freedom to denounce it, there are more mechanisms to investigate and punish it, and we have a public which is more informed and which can exert further control. Faced with the phenomenon of corruption there are two kinds of attitudes. First comes scandal, which really does not seek to solve the problem, but to take advantage of it to shock the public, with other objectives. This attitude was condemned by Jesus Christ himself when he said that it seemed like whitewashed sepulchres, because the evil of hypocrisy is disseminated in society under the pretext of fighting corruption. The second attitude is that which is really interested in attacking corruption at its roots, to create conditions and mechanisms to prevent it from extending, and to combat and punish it. This has been the path followed by my administration. That is the reason for our dedication to moralising [as heard] the judicial branch, through the proclamation of the laws of the Attorney-General's office, the judicial organisation and the two- thirds requirement to form the Electoral Court, to thus attack the mother of all corruptions which has been the political and election fraud, the implementation of the Safco [Administrative and Financial System for Government Control] law, and finally, the intervention of the National Agrarian Reform Council as a consequence of the irregular processes in the granting of plots of land. These are but a few examples of my government action in this field. I also want to state that there was no charge with foundation that was not immediately investigated by the pertinent authorities. I am aware that even though all these actions are positive, they were not enough, and the whole country will have to undertake a real national crusade against this scourge. Peace, freedom and justice, however, are not possible without development. I can say with responsibility, with the backing of those who are close to us and those who are not close to us, that I am handing over a government placed within a framework of clear consolidation of stability. This solid situation can be demonstrated through the macroeconomic indicators that the people know perfectly well, but which I can summarise in a few lines. During the last year of my administration, from July 1992 to July 1993, the accumulated annual inflation rate has been 7.8%. Deposits in the financial system increased from 444 million dollars in 1989 to 1.815 billion dollars in 1993. That is, they have increased fourfold. International reserves increased from negative figures in 1989 to 250 million dollars nowadays. Our old foreign debt, which was contracted with very demanding terms and interest rates, has been reduced by two billion dollars. The foreign debt with private banks has been practically eliminated. During the mentioned period of time we obtained 1.7 billion dollars' worth of credits with better terms, longer repayment terms and lower interest rates. In this manner the contracted foreign debt has been reduced by a net 300 million dollars. The administration of the economy was in general centred on our economic opening. We have had to destroy isolating and suffocating walls to take the best advantage possible of the technological revolution, so as to be able to produce and communicate with the rest. It was not only a voluntary action but an inevitable and imperative one, as a consequence of the trend of economic and technological globalisation that is characteristic of the end of this century. By taking this step towards an economic opening and reinsertion into the international economic system, Bolivia has discovered new opportunities and has assumed new risks, risks which are the consequences of an accumulation of backwardness, poverty and neglect and of a deficient production and services structure. The first stage of this reintegration process has been positive, as clearly demonstrated by the indicators used by the specialised agencies to diagnose the situation of a country. There is a good level of reserves, there are no foreign financing limitations, investment and employment have increased significantly, and in a few years national and foreign private initiative has established new productive horizons for the production of soya beans, gold and oil, to mention the most important examples. However, I would not be fulfilling my duties as president properly if I did not point out that the country still has great obstacles to overcome in order to allow common people to improve their living standards, after Bolivia has rejoined the international economy. The first problem is the trade imbalance. In plain words, we buy more than what we sell. Yet it is not only that. We also buy little and sell little. We sell raw materials and we buy knowledge. It is fine to do this now, as all countries followed that path. But this situation cannot continue for an uspecified period, because it could cause serious risk in the future. In order to correct the trade imbalance, after painstaking and difficult negotiations, my government finally managed to arrange a contract to provide natural gas for the Sao Paulo market in Brazil. A lot more, however, will be necessary. . . Ready to meet the challenges posed by modern society, my government adopted institutional and operational measures for the preservation of the environment, measures that are pioneering in Latin America. Among such measures are the historical ecological pact (Spanish: pausa ecologica historica) of January 1990, the environment law of April 1992, the Supreme Decree on Biodiversity, the creation of the National Environmental Fund - to which approximately 22 million dollars was earmarked for its specific programmes - and the creation of the General Secretariat for the Environment, with the compulsory presence of its main executive in the national cabinet. We created a sound foundation for building in the future. I declare my optimism in this regard. I have two reasons for this attitude. First, Bolivians returning home are now outnumbering those who leave. Second, incoming funds surpass outgoing funds. There is an increasing number of entrepreneurs who, encouraged by stability, are investing in our country. They are bolder because conditions are safer. In 1992, private investment reached 420 million dollars, most of which was used for purchasing capital goods. This reflects confidence and credibility. In 1993, the private sector will invest one dollar for each dollar invested by the public sector. . . Messrs Congressmen, when I was installed as President of the Republic in 1989, my spirit was overwhelmingly seized by a particularly pressing concern: Bolivia had to open to the world as an urgent requirement for national survival and capability, as today's leading and developed nations did at a given time within different historical contexts. Bolivia's historic opening to the world, as a long-term strategic drive, was thus inaugurated. Established in South America's very heart, and set between our mountains and our extensive eastern plains, we could no longer allow the landlocked situation imposed on us from becoming a sort of mental or spiritual landlocked situation. This decision was very important, because our country's reform and modernisation process, involving momentous economic, political and social changes, in which all of we Bolivians are engaged, so required it. In fact, the achievement of these national goals is unthinkable outside a reality in which the market system, technology, financial resources, and the production of wealth has virtually become international. It was therefore necessary to break the imposed and self-imposed siege and open [ourselves] to the world. This challenge is coupled with another challenge: in today's international community there is an increasing level of interdependence among the nations, and some countries play an active role while other countries play a passive role. The former raise initiatives that are borne by the latter. For various reasons, reality had placed Bolivia among the latter. This situation had to be reversed. Bolivia had to pass from a passive to an active role. We raised several initiatives that were successfully accepted and subsequently implemented by the international community. . . I want to mention the historic Mariscal Andres de Santa Cruz Ilo Agreement with our sister nation Peru. This initiative not only contributes to the new subregional and inter-oceanic integration process, but above all allows Bolivia to consolidate its physical presence on the Pacific coast, and generates a very valuable mechanism for the successful realisation of its maritime claim. [Applause] I also want to emphasise the new trade opening by the United States, Europe, Canada, Japan and China. I want to thank brotherly countries and international technical and financial cooperation organisations for quadrupling their cooperation with Bolivia during the past four years, from 200 to 800 million dollars per year. Less than half of this money involves loans - the rest involves grants-in-aid. International reintegration has increased not only our country's economic and political presence abroad, but also its scientific presence. Bolivians are now managing important technological and health organisations and are excelling in artistic and cultural fields. Concerning trade, we are a link between various Latin American integration sytems that are being built in different, but concurrent - and not contradictory - ways. I also want to express gratitude to ambassadors who cooperated efficiently with my policy of direct diplomacy. Nevertheless, the beginning of Bolivia's new active role in the international arena is not the result of a government's decision, mission or action alone, but especially the fruit and the consequence of the toil, sacrifice and will of our entire nation, which wants to build its own national project, modernising our country and resolutely implementing momentous transformations in our political, economic and social life. In fact, no country can give something it does not have, pretend to be something it is not, and do something that is not possible in the demanding international arena. In fact, it is not possible to play a role abroad before playing a role domestically, nor to do something abroad before doing it here first. The link between domestic and foreign affairs is inexorable and immediate in the lives of countries, and represents a basis for saying that international politics are the projection and development of a country's domestic politics and force. The new course taken by Bolivia and Bolivia's democratic revolution were also possible thanks to the armed forces' renewed conduct. They are the pillar of our nation, of peace, liberty and democracy. I want to express the entire nation's and my own special gratitude to the high command that has joined me with such a high level of responsibility. Thank you. [Applause]. . . Honourable Congressmen, I have always tried to have my actions conform to the truth. I have acted conscientiously, convinced of those words uttered by Jesus, that only the truth shall make us free. I am asking for benevolence for my mistakes. I have acted in good faith. I have simply not held back anything of what I could give or deliver. Following a constitutional mandate, I am now leaving the presidency but, following my conscience's mandate, I remain with Bolivia and the Bolivian people. Thank you very much. [Applause] Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 9, 1993, Monday SECTION: Part 4 The Middle East, Africa and Latin America; D. LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1762/D HEADLINE: COLOMBIA; PRESIDENT GAVIRIA COMMENTS ON DEFENCE ISSUES; POLICY TOWARDS GUERRILLAS SOURCE: Inravision TV, Bogota 0130 gmt 5 Aug 93 Text of recording of interview with Colombian President Cesar Gaviria by Dario Arizmendi at Narino Palace on the "Face to Face" programme [Gaviria] I thing being pragmatic means I have not opted for rhetoric. I do not go around saying things, offering things, or making promises I cannot keep. Perhaps not everything I do turns out well, but I do it anyway. I am not too pretentious, even though there are those who claim I am. I feel I have done my duty and that is all. There are a lot of people in this country, particularly in the capital, who like rhetoric and gestures. There are politicians with fundamentalist positions who do not care if things change. All they care about is that people have their principles. They do not care if people do something, do not do something or how they do it, provided they are capable of carrying out institutional reforms when they rule the country. I do not think I am like that. I like to do things. I would like to be remembered as a man who helped abolish some of the feudalism in this society, which is still so feudal, so terribly feudal. [Arizmendi] Defining President Cesar Gaviria would be a titanic task. He is not only cold, aloof and inscrutable; he knows perfectly well that when a head of state's intentions are obvious, he becomes vulnerable. Good or bad, he is a leader. He acts, has control and is sure about his decisions as a leader. His personal life and leisure activities are given the same attention as his actions as president. We cannot say he is romantic or [word indistinct]. Issues that are essential to man - love and passion - do not seem to interest him; or perhaps he thinks they are guaranteed for life with the complicity of Ana Milena, that stalwart companion of the last 15 years and possibly the only one who reached the depths of his soul and the innermost recesses of his heart. Institutionally speaking, was democracy in Colombia ever endangered some night, some day in the past? [A] We - [pauses] When I assumed the presidency after the death of Luis Carlos Galan, during that political process, I do think democracy in Colombia was endangered. There was a major institutional crisis, there was widespread distrust of our institutions. The state's capacity to confront the organised terrorism that had developed from drug trafficking was questioned. I think there were times when democracy was in danger. I also think some feel there have been times during my mandate, during Constituent Assembly sessions, that the state of law could have been endangered. I did not perceive it as such, although I acknowledge there could have been some basis for fears that it would occur, but it did not occur. There was a great deal of maturity, and I did not have that fear. Perhaps when for a few hours the risk existed that a large number of drug traffickers, bandits and the worst criminals of this country would be let out into the streets en masse, at that time I felt democracy was endangered. [Q] On that occasion, how far were you willing to go? [A] I would have done everything in my power to keep that from happening, or, should I say, I decided that it would not happen. Neither judges' orders nor anything else would have mattered, because I am certain that the country's institutions cannot run the risk that, because of legal nuances, we were going to end up with criminals in the streets. [Q] It would have been a coup d'etat. [A] I do not know what would have happened. Fortunately, we found a way out, we found a solution, and we have continued on that road with ups and downs, with difficulties. [Q] Have you ever feared a military move against democratic institutions? [A] Not even the slightest fear. I have never had a difficult moment with them. Colombian soldiers really respect this democracy. They have a very constructive attitude towards complex issues such as peace processes and surrender policies. They have always been constructive and positive. I have never had any such concerns. The transition to a civilian defence minister could have been a difficult time, but that was not the case. There was not one act or incident that could have been cause for concern. Escobar's escape created some tension which, fortunately, was satisfactorily, calmly and positively resolved through common agreement. Thus I have never had such concerns at any time. [Q] Do you think the experiment with the civilian defence minister deserves to be maintained in forthcoming governments? [A] I think the country took that step, and generally speaking, the idea has been well-received. I think this experiment yielded good results. It happened at a time when he have considerably strengthened the public force and state security policies. I think these factors helped the experiment to achieve good results. We are much more organised in our efforts to invest in the public force. We have a five-year plan that clearly outlines how investments in that sector will be made. I think that is a very important achievement. We could say that this has been a spectacular period of growth in defence and security expenditures, which have grown 60% in real terms. That is exceptional. Maintaining public order is essentially a civilian duty. To a great extent, we civilians must assume responsibility for public order and the success of such policies. I think that my recognition of public order as the most important aspect of Colombian politics was one of the factors that helped me reach the Presidency. It convinced someone that I could assume this responsibility. Public security continues to be the main issue. [Q] Mr President, as you said, the budget was increased, but people expect to see results, they want the heads of specific individuals. They want Tirofijo [Manuel Marulanda, leader of the Revolutionary Armed Forces of Colombia, FARC], Priest Manuel Perez [Army of National Liberation leader, ELN], and other top leaders (Spanish: secretariado). Why have they not been caught about eight months ago as the soldiers had promised? [A] There have been excellent results in terms of public order. Of course, one would have like to have captured them. Nevertheless, we have had excellent results. Kidnappings and guerrilla attacks have decreased significantly, and the number of guerrillas captured, killed in combat and turned over to the authorities has doubled between July 1992 and the present. [Q] How do you explain, President, that many guerrillas who had reintegrated themselves into society are now returning to the guerrillas because they feel disappointed or betrayed by certain official institutions? [A] I would not say many, but rather a few of them. In every reconciliation or peace process, not only in Colombia but in all countries, there are always guerrillas who hold out; guerrillas who continue the armed struggle and guerrillas who decide to rejoin civilian life but are unable to assimilate and begin committing crimes. It always happens. Every guerrilla group that has chosen to rejoin civilian life has left behind small redoubts. They are, however, large groups. [Q] Is it not contradictory to spend about 15% of the national budget on security and militarisation when much less is spent on social security? [A] You could argue that if we lived in an ideal world. The figure you are quoting, however, is comparable to those in Argentina, Brazil, Chile, Peru, Venezuela, most of Central America and developed countries such as England and the United States. All countries make these kinds of expenditures in one way or another. Our figures for security and defence, even at the beginning of this administration, were relatively low in comparison to those of other Latin American nations. [Q] Going back to your inaugural speech, you promised a policy of understanding and pacification. That was one of the highlights of the speech. What has happened to make you not want regional talks or talks with the Simon Bolivar National Guerrilla Coordinating Board? [A] I did not promise to hand over the country to guerrillas so they could do as they pleased. We have met them. We have been willing to discuss the topics they wanted to discuss. Unfortunately, they lack a clear political programme and do not have clear demands regarding society. They lacked the courage to realise that they are an antediluvian species, dinosaurs in the midst of a world and society that wants to resolve problems through peaceful and democratic means. So long as those gentlemen persist in the armed struggle, violence and terrorism, it will be very difficult to make peace. It takes two to have peace. The important thing is to have the conditions for holding talks. I do not mean the regional talks the guerrillas want, where mayors, governors and lawmakers go to explain their actions to them and promise to carry out projects based on the rebels' threats and intimidation. Deep down, that is what the regional talks are. The rebels tell them: We remain guerrillas, and you stay there but come here and explain your actions and pledge to do projects at our bidding. That is more or less the meaning of the regional talks. That is why I say no and will continue to say no, because that is unacceptable. We could have regional talks within a peace process, when we are certain that peace will come, that they will forsake the armed struggle and that the talks will not simply turn into a way for civilian society to offer explanations to guerrillas or make pledges to them while they remain guerrillas. No way. [Q] The guerrillas will disband in exchange for what? [A] In exchange for negotiations. Negotiations must obviously include their surrender, the adandoning of the armed struggle, guarantees offered to them to engage in politics, protection for them and economic assistance to make it possible for them to rejoin society. There may be negotiations on aspects of the state's policies, as we did with the 19th April Movement [M-19], as well as on more advanced talks. [Q] Human rights violations are another blemish that the country has had for a long time, especially as far as the international community is concerned. Do you think we will ever control those units or state agents who abuse and violate human rights? [A] International human rights organisations, at least the more serious ones, have commended Colombia for its new constitution, although there may be a couple of provisions they do not like. They commend the petition for protection as a major instrument for defending human rights. We are commended for what we have done in the field of justice by creating the Prosecutor-General's Office, seeking an efficient justice system, capturing a large number of criminals, and because Colombia is no longer a country where impunity prevails since justice works. But we still have a way to go yet. [Q] The world is well aware of the crimes by drug traffickers and guerrillas in Colombia. People wonder about the impunity with which state security units violate human rights, something that turns us into one of the worst offenders in the world and could have economic repercussions for us. What do you say to your people about this matter? [A] We have been working seriously on these things. We have worked with the armed forces and the new civilian defence minister on these topics. We have to work harder in the future to resolve specific cases and not just institutional problems. You are right that abroad this constitutes a very big problem for the country. We must devote our attention to this problem with greater seriousness and interest. We must make a greater effort abroad to explain our policies and our situation and to resolve the problems of violence and human rights violations that exist in Colombian society. [Q] You have received the most criticism, not only from your permanent detractors and foes, but also from your true friends and unofficial - or as I call them, obsequious - government aides, in the social field. Regardless of other policies, it seems most of the criticism centres around that topic. Some say it is related to your coldness and alleged insensitivity. [A] The truth is that we have dramatically increased social spending from 10% to 25%. We have increased social investment from 25% to 41%. We have made important changes in our social policies. We have geared our housing policies towards direct subsidies. We have a drinking water programme that is really working very well. There is a bill awaiting approval in Congress that will mean an unprecedented change in the health sector. We are working on pensions and education. Now, it is very easy to say that we do not have a social policy because there are poor people in Colombia. Of course, confronted with such an argument, I would have to say that no government will ever have a social policy. [Q] Do you believe there has been a lack of pencils [as heard]? [A] Of course, there has been a lack of pencils. Much of the criticism is valid for one logical reason, which is that significant changes have been made here. [Words indistinct] is reflected, but there are many problems to be resolved in this society. We need more pencils. We need to reduce poverty. We need to stop spending so much money on security, defence and public forces when we could use it for other purposes. The problems will always be there. The effort this country must undertake is just beginning. [Seven-second break in reception] [Q] - will be the presidential mark regarding the presidential designate? [A] In a democracy, authorities must allow people to compete. However, the process of the presidential designate has always been carried out with the approval of the president. I do not see a problem with the Board of Liberal Party Legislators appointing the presidential designate. I hope that the tradition of other parties abiding by and respecting that decision will be continued. I do not foresee the president intervening in this process, unless there are exceptional circumstances, which I do not think will happen. [Q] Do you feel as satisfied and comfortable with Dr William Jaramillo as you did with Dr Juan Manuel Santos? [A] There is no doubt about it. I think they both meet the qualifications required to replace the president either temporarily or permanently. They both have excellent qualifications, and I feel equally satisfied with one or the other. [Q] Mr President, everything indicates that the New Democratic Force [NFD] wants to remain in the government until the end of your administration, but NFD Ministers Luis Alberto Moreno and Dr Luis Fernando Ramirez would leave the cabinet. Would they be replaced by members of the movement led by Andres Pastrana? [A] I have heard the opposite about the everything-indicates-cliche that you mentioned. I often hear people say that everything indicates that the NFD is going to withdraw from the government. Now you are telling me that everything indicates it will remain. Truly, I have not sensed a desire on the part of the NFD either to leave or remain in the government. I see them in the cabinet, and they appear to be satisfied and comfortable. I see them working. The NFD has two good ministers. I would like for them to stay. I am not able to anticipate the political situation of the future. [Jose Salgar of 'El Espectador' newspaper] Today the Liberal Party [PL] appears to be in disarray and its discipline and morale appear to be low. I ask the president, who represents that party in governing the country? In the home stretch of your term, what will you offer the PL so it can remain in power for the next four years? [A] Well, I would say that both parties in Colombia have had a tradition of disorganisation. It has to do with institutional affairs and the fear of violence. We have not worked enough to establish order and disciplined mechanisms in the political parties in Colombia. That is a feature of this democracy. I hope the country and the PL acquire a sense of transformation, a vocation to change Colombian society and reality. That is what makes the party an ever-changing party. [Q] Mr President, does being imitated annoy or amuse you? [A] It amuses me. [Q] Do you laugh? [A] Of course. [Laughs] [Q] Let us see if it is true. [Recording of an unidentified comedian imitating President Gaviria speaking while Gaviria and Arizmendi laugh in the background] Copyright The Bureau of National Affairs, Inc., 1993 BNA INTERNATIONAL ENVIRONMENT DAILY Aug. 9, 1993 TEXT: General Policy GROUP REPRESENTING 20 STATE OIL COMPANIES ISSUES 1,900-PAGE ENVIRONMENTAL GUIDELINES MONTEVIDEO, Uruguay (BNA) -- The Latin American State Oil Company's Reciprocal Assistance Organization (ARPEL), a group representing 20 state oil companies from Latin America, the Caribbean, and Canada, completed a 1,900-page set of environmental guidelines for its members in early July. The document is part of an ongoing environmental management program in conjunction with aid organization Canadian International Development Agency (CIDA). The ARPEL/CIDA Environmental Project is a "proactive effort . . . that will certainly influence favorably investment conditions in the region," Aldo Brussoni, under secretary of ARPEL and permanent representative of Petro-Canada, told BNA July 6. In Phase I of the group's environmental project there have been two major achievements--getting all members to adhere to a Code of Environmental Practice and editing the Guidelines on Operational Practice to Protect the Environment. The Code of Environmental Practice states: "The development of modern society is intimately related to the intensive use of energy. The rational exploitation of liquid and gaseous hydrocarbons is required to supply the energy for sustainable development." The code is as much philosophical as technical although it is broken up into six themes--gaseous emissions, liquid effluents, hazardous and other solid waste management, ecological protection and reclamation, community awareness, and contingency planning and emergency response. Guidelines On Operational Issues The Guidelines on Operational Practice is a detailed handbook on specific operational topics. There were 12 upstream and downstream oil company activities covered in the initial tome that were buttonholed as activities of member companies that could affect the environment. They are: o Disposal and treatment of produced water; o Management of oil refinery solid wastes; o Management of oil refinery liquid effluents; o Control and mitigation of environmental effects of deforestation and erosion; o Treatment and disposal of exploration and production drilling wastes; o Decommissioning and surface land reclamation at oil production and refining facilities; o Reduction and control of gaseous emissions from refineries; o Control of contamination from underground oil storage tanks; o Conducting environmental audits for onshore oil operations; o Environmental impact assessments; o Environmental management of the design, construction, operation, and maintenance of hydrocarbon pipelines; and o Gas flaring at exploration and production facilities. "The first stage has been quite successful," said Brussoni. "In fact, the governments of Jamaica and Bolivia have recently passed environmental legislation utilizing ARPEL guidelines as a key reference point." Phase II--Hands On Phase II of ARPEL's environmental project is now under way and scheduled to be finished by March 1994, ARPEL President Adrian Bustillo of Bolivia told BNA. This is more the hands-on phase with specific plans in different areas. To address oil spills, the group will provide a computerized database of available oil spill equipment and trained personnel. ARPEL already has an emergency response team that has assisted in a few major incidents in Ecuador, Argentina, and Brazil. Another part of the second phase is development of environmental technologies for the oil industry in the Amazon and other tropical rain forests. A Brazilian team of experts has been sent to Colombia to try to develop a plan with native people in the Amazon area of Colombia. Colombia, Ecuador, Peru, Brazil, and Venezuela are working on developing programs to minimize detrimental impacts on their common Amazon rain forest areas. A study of carbon dioxide emissions in Latin American urban centers is also scheduled to be completed before March 1994. The project is funded on a fifty-fifty basis by ARPEL and CIDA, with a budget of about C$1.9 million annually (US$1.5 million). Aside from the Canadians, ARPEL is made up of: ANCAP-Uruguay, Cupet- Cuba, Ecopetrol-Colombia, ENAP-Chile, Gas del Estado and YPF of Argentina, Instituto Mexicano del Petroleo and Pemex of Mexico, Petroleum Corp. of Jamaica, POVSA-Venezuela, Petrobras-Brazil, Petroecuador-Ecuador, Petronic-Nicaragua, Petropar-Paraguay, Petroperu- Peru, Recope-Costa Rica, Staatsolie-Suriname, Trinidad & Tobago Oil Co. Ltd., and YPFB-Bolivia. These member organizations account for about 80 percent of the petroleum activities in Latin America. A recent change in ARPEL's legal statutes will permit regional private sector oil companies to enter as full members. Given the increasing privatizations in the oil and gas sectors, this is expected to continue the importance of ARPEL in the future as a clearinghouse and lobby group in the same framework as the American Petroleum Institute. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 7, 1993, Saturday SECTION: Part 4 The Middle East, Africa and Latin America; D. LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1761/D HEADLINE: PERU; Congress approves presidential re-election for successive terms SOURCE: Television Panamericana, Lima 1204 gmt 5 Aug 93 (Text) After a prolonged and heated debate, the Democratic Constituent Congress [CCD] on the evening of 4th August approved immediate presidential re-election for one term only, not indefinite re-election. The vote was 51 in favour and 24 against. The greatest surprise came from pro-government congressman Reinaldo Roberts, who voted against re-election, and Independent Moralisation Front [FIM] representatives Cesar Larrabure and Julio Chu, who voted in favour. Some say they may be expelled from the FIM, the leader of which is Fernando Olivera: [Unidentified speaker - recording] During the nominal vote, each congressman expressed his views on presidential re-election. We have just received the official results: 51 votes in favour, 24 against. There have been a few surprises. FIM's Fernando Olivera voted against reelection, but Cesar Larrabure and Julio Chu voted in favour. All the Change 90 - New Majority Movement coalition members voted in favour, with the exception of Reinaldo Roberts, chairman of the Economy Commission, who voted against re-election. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 7, 1993, Saturday SECTION: Part 4 The Middle East, Africa and Latin America; D. LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1761/D HEADLINE: PERU; Army commander says MRTA North-eastern Front has been disbanded SOURCE: Television Global, Lima 0100 gmt 4 Aug 93 (ME/1760 D/1 - Excerpts) General Nicolas de Bari Hermoza Rios, commander of the Armed Forces Joint Command, has announced the dismantling of the North-eastern Front of the Tupac Amaru Revolutionary Movement [MRTA]. He made the announcement during a visit to the Mariscal Caceres Barracks in Tarapoto. . . [Hermoza - recording] I hereby announce the complete dismantling of the Rodrigo Galvez Garcia North-eastern Front of the MRTA, which was carrying out actions on this front. [End of recording] The MRTA only has three remaining detachments of the seven it used to have, with no more than 70 men, who are demoralised. In addition, as a result of the struggle being waged by the armed forces, a total of 172 weapons have been recovered since January 1992 but at the cost of the lives of six officers, five NCOs and 89 soldiers, to whom tribute has been paid. As for the application of the law on repentance, a total of 313 Shining Path and MRTA terrorists from the Huallaga Front have sought the benefits of the law. . . Further evidence of the effective application of the repentance law is the active cooperation of former MRTA members such as Comrade Grillo and Andres Mendoza, alias El Aguila, dressed in military uniform, who was congratulated by General Nicolas de Bari Hermoza himself following an operation in Alto Mayo in Moyobamba, where these weapons were recovered: [Reporter - recording] The MRTA has practically been dismantled in Alto Huallaga. What is left to be done to completely defeat the MRTA and the Shining Path? [Hermoza] Almost nothing, almost nothing. We have the population on our side, who have totally rejected the MRTA. A large number of MRTA members have repented, and we have captured many as well. The 10 or 15 men who still remain will either accept the repentance law or will be captured and be given life sentences. If they decide to confront the army, they will surely be defeated. [Reporter] What about (?Serpa)? [Hermoza] He remains to be captured, but he has already been cut off from what is left of his group. He will be defeated at any moment. [End of recording] Perhaps the war against the MRTA is being won in Alto Huallaga, but according to army intelligence, Shining Path could occupy this area. The army is ready if this happens so that peace can be achieved. Copyright (c) 1993 The British Broadcasting Corporation; Summary of World Broadcasts August 7, 1993, Saturday SECTION: Part 4 The Middle East, Africa and Latin America; D. LATIN AMERICA AND OTHER COUNTRIES PAGE: ME/1761/D HEADLINE: CHILE; Senate Foreign Relations Committee approves agreement with Peru SOURCE: EFE in Spanish 1416 gmt 4 Aug 93 (Excerpts) Santiago, 4th August: The Chilean Senate Foreign Relations Committee on 3rd August unanimously approved a bill ratifying the Lima Convention, which was signed by the governments of Chile and Peru to resolve pending problems resulting from the 1929 treaty signed between both countries. Congressional sources said today that the committee also approved an agreement on the free traffic of goods that, as in the convention, was signed in Lima on 11th May of this year. Chilean Foreign Minister Enrique Silva Cimma, who attended the meeting in Lima, expressed satisfaction with the swift decision on the initiatives and stressed the importance of a definitive solution to pending problems with Peru resulting from the 1929 treaty. The Lima Convention "puts a definitive end to conflicts with Peru regarding the interpretation and application of the treaty's fifth article", Silva Cimma said. The conflict resulted from an undefined point over which country had sovereignty over the land, dock, customs office and railroad station that Chile built for use by Peru in the port of Arica. In the Lima Convention, Peru accepts Chilean sovereignty over these premises while Chile grants Peru the right to use these installations in perpetuity. The two countries' governments are currently trying to get their respective congresses to ratify the convention as soon as possible. Peruvian President Alberto Fujimori has decided to make an official visit to Chile once the convention is ratified. This will be the first visit by a Peruvian president to Chile since the Pacific War in 1879, during which Peru and Bolivia faced Chile, which occupied the Peruvian departments of Arica and Tarapaca and the Bolivian region of Antofagasta. In Peru, some nationalist sectors have presented objections to the Lima Convention, and an arduous debate is anticipated during the ratification process. Some Peruvian groups have proposed a plebiscite to allow the Peruvian people to give the final word on the future of Peruvian relations with Chile. In Chile, however, practically no one voiced opposition to the convention, and different political groups have expressed support for swift ratification. .. . The Senate plenum will discuss the convention now that the Foreign Relations Committee has ratified it. The document will then go to the Chamber of Deputies. Copyright 1993 Reuters, Limited August 7, 1993, Saturday, AM cycle HEADLINE: SUSPECTED DRUG PLANE CRASHES IN PERU DATELINE: AYACUCHO, Peru A twin-motor plane, apparently on a drug run in southeastern Peru, crashed and exploded in flames killing all aboard, the military said Saturday. The Piper Cheyenne plane blew up during a rapid takeoff shortly after arriving from Colombia at the Luisiana airport in La Mar province in the Apurimac River Valley. The crew tried to move the plane off after spotting members of the Peruvian army guarding the runway, the statement said. The region some 240 miles southeast of Lima is being used more frequently to grow coca leaves, the raw material for cocaine, police and military sources say. An official commission from La Mar province traveled to the site, where they found the remains of the bodies and $ 20 and $ 50 bills in U.S. currency, the statement said. The officials were trying to identify the plane and the bodies, it added. Peru is the largest producer of the coca leaf and most of it is refined into cocaine in Colombia. Copyright 1993 The Daily Telegraph plc The Daily Telegraph August 7, 1993, Saturday SECTION: Pg. 13 HEADLINE: Money-Go-Round: Mercury down Mexico way in trust launch BYLINE: BY CHARLOTTE BEUGGE MERCURY Fund Managers this week launched an emerging markets unit trust investing in the world's developing stock markets. The new Mercury Emerging Markets Fund will invest in up to 25 countries, including Botswana, Colombia and Peru. The biggest portion-22pc of the portfolio- will be invested in Mexico, with Malaysia taking up 10pc and the already developed market of Hong Kong, 9pc. Richard Royds, managing director, said: "Emerging markets provide one of today's most exciting and potentially rewarding investment opportunities. The growth potential for these markets is huge as economic and political reform continue to take hold." Charges on the fund are 5.75pc initial, plus 1.5pc annual. Investors can choose between a minimum lump sum investment of @1,000 or @50 a month in a regular savings plan. There is a 2pc discount until September 17. Mercury aims to raise about @20m through the launch. Schroder Unit Trusts is also jumping on the emerging markets bandwagon with the launch of a Global Emerging Markets Fund. The initial charge will be 5.25pc and the annual, 1.5pc. Investors can invest @25 through a regular savings plan or a minimum lump sum of @1,000. Schroder will pick from 24 emerging markets. Initially, the portfolio is likely to be 40pc in Asia, 40pc in Latin America and 20pc in Eastern and Southern Europe. Bridget Cleverly, head of marketing, said: "The bandwagon seems to have arrived now, although we have had plans to launch an emerging markets fund for a long time. We reckon it is a high risk, high reward investment. It is going to be a volatile fund with good long-term potential." Schroder already has a non-authorised offshore emerging markets fund based in Guernsey that has returned more than 60pc on an offer-to-offer basis since it was launched a year ago. Advisers are keen to point out that emerging markets should only be seen as long-term investments. Jamie Berry, managing director of Berry Asset Management, the Chelsea-based independent financial advisers, said: "Emerging markets should constitute 5pc of a long- term growth portfolio. There are already a lot of emerging markets funds up and running that have good track records. "Investors in emerging markets funds must be prepared to leave their money in for a long time to reap the rewards. These funds are not for those people who check the unit price every day." Mark Dampier, investment director of Whitechurch Securities said: "I think emerging markets are a good idea especially for savings plan investors. They are always going to be volatile, and by investing month by month you escape the worst of the movements." There are a few emerging markets unit trusts that have been going a reasonable number of years. Gartmore Frontier Markets, one of the oldest, would have turned a @100 investment five years ago into @167 on an offer-to-bid basis today-@10 more than the average unit trust. Copyright 1993 Times Newspapers Limited The Times August 7, 1993, Saturday SECTION: Features HEADLINE: Super Mario BYLINE: Andrew Graham-Yooll WHILE HE WAS still in the United States, Mario Vargas Llosa welcomed the gift of a small tin of tea from Fortnum's with the enthusiasm that others might show for diamonds. The tin stood on the table throughout our long lunch in New York. The Peruvian novelist who, until the end of May, had been teaching at Princeton University, did not disguise his longing to be away from academe and on the European side of the Atlantic. Jorge Mario Pedro Vargas Llosa, born in Arequipa in 1936, wears elegant suits and retains his handsome good looks. The courtesy he shows, the love of literature, his comfort in three languages, place him in the class of old-style European. A quarter of a century ago, Vargas Llosa began his rise to literary stardom amid a community of Latin American writers who have become household names, including the Colombian Gabriel Garcia Marquez and the Mexican Carlos Fuentes. Vargas Llosa made Europe his home for 17 years, writing those vast books that critics described as the work of genius, ''magic realism'', surreal and impenetrable conflations of dictatorship and artistic creation. Then he went back to Lima. Now, disenchanted with his compatriots, beaten, but still boyishly buoyant, it is back to London. Vargas Llosa is fiercely Peruvian. He is exchanging very unfriendly words with his political rivals, President Alberto Fujimori and assorted generals, who have called him a traitor for criticising the Peruvian regime's human-rights record, the censorship of the press and administrative incompetence. However, in June, Vargas Llosa, the novelist and presidential candidate who tried to take 19th-century liberalism and Thatcherism to Peru, returned to writing fiction at a favourite seat in the British Library, and to settle in the city that he and Patricia, his wife, love more than any other. His three children were educated in England, and his youngest daughter is still at university there. ''I went to London for the first time in 1961, from Paris,'' Vargas Llosa says. ''I will always remember that, as I left the ferry at Dover and got on the train, I was given a cup of tea and a small biscuit. My thought was that I was reaching civilisation. Instead of being abused by a porter or a guard, I was given a cup of tea. I feel at ease in London. The city is stimulating, and my relationship with it is comfortable. People say London is cold and indifferent. For me that assures anonymity, which is freedom.'' His first residence in England was in the late Seventies, when he held the Bolivar Chair at Cambridge. That was a revelation. England allowed him to write in peace. He went on pub crawls with Fuentes, and they assured one another that it was terrific to be rich and famous, but fans were best kept at a distance. In England they felt comfortably ignored. If he needed an ego-fix, he could go home to Peru, where he was mobbed. After his year at Cambridge, Vargas Llosa moved into a flat off Sloane Street, chose a seat in the British Library, and went to work. His dream of England was complete. Now settled in his flat a short way from Harrods, his political defeat in April 1990, at the hands of Fujimori, is behind him. He shows an almost defiant recognition of his own failure, and admits that he was naive in his assumptions about politics. That bitter experience is recorded in El pez en el agua: Memorias, to be published as Like a Fish in Water: A Memoir in Britain next year, which covers two crucial stages in Vargas Llosa's life. The first part is an account of his life in Peru up to 1958, the beginning of his writing and his escape to Paris with his first wife. She was a relative 12 years his senior, made immortal in the novel Aunt Julia and the Scriptwriter, published in 1977. After leaving Julia Urquidi, Vargas Llosa married a cousin, Patricia Llosa. ''Aunt'' Julia still lives in Bolivia, where Vargas Llosa spent his childhood in a household full of women. He met his father, whom he had been told was dead, when he was ten, when his parents decided to try a reconciliation. That was when the family settled in Lima. His relationship with his father was never to be more than tolerable, and the boy hated Lima. Old man Vargas tried to discourage his son from writing ''little stories'', a sure sign of effeminacy and weakness in a society where men had to be lawyers, businessmen or generals. His writing started in earnest in the mid-Fifties, when, to his father's horror, he dropped out of his law studies and became a journalist in Lima, working in radio and for local newspapers. In 1957, after shocking his family with his first marriage, he went to Paris. The trip was the prize in a short-story competition. His first book, a collection of short stories called Los jefes (The Chiefs), was published in 1958, when he was back in Lima. But his taste of Paris drew him back. Madrid, Barcelona and Paris became his homes for the next decade. The other half of the new autobiographical account tells his story from when, in 1987, he entered the campaign for president almost accidentally, after joining a pressure group against the nationalisation of banks in Peru. The memoirs end with his defeat. The book has aroused the fury of his former allies in the Democratic Front, ''who immediately joined the winning side''. In the book, ''I am very self-critical. This is not an exercise in self-justification.'' In fact, Vargas Llosa won the elections, but did not gain a big enough margin for an outright victory, and faced a run-off in June 1990. For that, Fujimori had the support of the outgoing president Alan Garcia's party, and of most of the left that opposed Vargas Llosa's privatisation and reform plans. Inflation ran at 7,500 per cent and Peru was on the brink of collapse. Vargas Llosa offered to withdraw and concede victory, in exchange for Fujimori adopting some of the novelist's economic programme. Fujimori, also a newcomer to politics, leaked the offer to discredit the novelist. He had been a little naive, hadn't he? ''Of course it was ingenuous. By then Fujimori would do anything for victory,'' Vargas Llosa says. ''He had seemed a grey character, quite inhibited, but obviously was crafty and calculating. A good politician.'' VARGAS LLOSA IS damning of the language of politicians. ''It was traumatic to discover that politicians use words in a functional fashion. Politicians need simple, repetitive, cliched little words, aimed at grabbing power.'' That's all very well, but had he not fallen for the same ploy to capture the crowds? ''No. I once said, as a joke, that I only lie in my novels. Fiction is a world of illusion. I did not lie during the campaign, and I did not disguise the sacrifice needed to bring about the change I wanted. I gave my rivals a remarkable arsenal. Fujimori presented my plans as apocalyptic. Then he began to introduce them the day after the elections. ''That was one of the reasons for my failure. In the Memorias I recall that the Bishop of Arequipa warned me that telling the truth in politics was risky. I was a very bad politician.'' Vargas LLosa used to be a supporter of Margaret Thatcher, and was her guest for supper at Downing Street in the early stages of his campaign for president. ''If there is one thing I admire, it is the politician who speaks from conviction. Those who say what they think and do what they say. I have only found this in two political figures, Charles de Gaulle and Mrs Thatcher. My sympathy is less with de Gaulle because he was a nationalist. I detest nationalism. Mrs Thatcher used nationalism, but she was not a believer. ''Britain, with all its problems, would have been much worse off if Mrs Thatcher had not attempted her very radical reform. She imposed the idea of a liberal revolution, in which the entire responsibility for wealth creation would be transferred to the private Mario Vargas Llosa: the novelist today and, inset left, the Spanish and Peruvian press trace his political progress sector.'' He is also convinced that she was instrumental in the defeat of communism and in bringing the cold war to an end. Vargas Llosa is described by his critics as being plagued by contradictions. He has gone from passionate admirer of the Cuban revolution to avid supporter of the right. His political conversion began with disenchantment with Fidel Castro's rule. This began in March 1971, when Castro ordered a show trial of the dissident poet Heberto Padilla on television in Havana. VARGAS LLOSA'S departure from the left also marked the cooling of his friendship with Garcia Marquez, which had begun in Caracas in 1967, and ended when the Peruvian flattened the Colombian with a punch in the eye in 1975, in the Palace of Fine Arts in Mexico City. Some years later, Garcia Marquez said Vargas Llosa thought he had made a pass at Patricia. The row went further when, in an argument with the German novelist Gunter Grass at the New York Pen conference in January 1986, Vargas Llosa said Garcia Marquez was ''Castro's courtesan''. Grass tried to defend the Colombian and was rebuked for supporting revolutions in Latin America which he would condemn in his own country. The argument was pursued in the correspondence columns of the German and Spanish press for six months. Vargas Llosa's contempt for the revolutionary left is sweeping. ''Many so-called progressives in the West are equally ridiculous. In Harvard Square I saw students, members of the most privileged families in America, asking for signatures and donations for Abimael Guzman, leader of the Shining Path terrorists. It was grotesque.'' Vargas Llosa says these ''transferred aspirations'' are a form of racism. ''It is the old idea of the noble savage. Intellectuals see Latin America as an exotic place where their fantasies can be played out.'' In October he will appear at the Cheltenham Literary Festival, to speak about the influence of South American literature on current writing in Europe and North America. In contrast, he feels warmly towards Salman Rushdie. ''We obviously hold different views on several matters. But we are friendly and I support him.'' Vargas Llosa calls the fatwa the symbol of a new Inquisition and a return to the age of darkness and intolerance, then hammers home the accusation that ''the intellectual community has been very weak and cautious in its support for Rushdie. The world in which writers can disagree, can enjoy freedom, is at stake.'' Debate, he knows, is part of the return to London. His political career over, he will have to defend his writing again. In 1990, The New York Review of Books described two of his novels, The Green House (1965) and Conversation in the Cathedral (1969), as leaving the reader with a ''sense of having to struggle through artificial obstacles'' and of being ''deliberately disorganised''. As a young man, Vargas Llosa thought that ''complication was a guarantee of depth''. He later discovered that it was possible to be complex and deep through simplicity and clarity. ''My most recent novels are accessible to the average reader,'' he remarks. ''But that will not prevent me from writing more complex books in future. ''I can't wait to be writing again. There is no explanation for my feelings. People relate to cities as they do to other people. It is irrational. Some cities you love. For me, London was love at first sight.'' Copyright 1993 Agence France Presse Agence France Presse August 6, 1993 SECTION: News HEADLINE: Fujimori invites Japanese prime minister to visit Peru DATELINE: LIMA LIMA, Aug 6 (AFP) - President Alberto Fujimori congratulated Japanese Prime Minister Morihiro Hosokawa on his election and invited him to Peru for an official visit, the presidential palace announced Friday. "We plan to extend a big welcome as befits the friendship that has existed between our people for the past 120 years, which we will commemorate during August," the president's office said in its message to Hosokawa. Fujimori, who left Friday for Bolivia for the swearing in of President Gonzalo Sanchez de Lozada, recalled in the message Hosokawa's friendliness during his 1990 visit to Peru and during Fujimori's June visit to Tokyo. Fujimori was elected in 1990, making him the first Peruvian president of Japanese descent. Copyright 1993 Guardian Newspapers Limited The Guardian August 6, 1993 SECTION: THE GUARDIAN FOREIGN PAGE; Pg. 11 HEADLINE: RE-ELECTION VOTE BYLINE: MALCOLM COAD IN SANTIAGO In a controversial vote, Peru's congress has voted to allow President Alberto Fujimori to stand for re-election for a further five-year term in presidential elections due in 1995. Copyright 1993 Inter Press Service Inter Press Service August 6, 1993, Friday HEADLINE: PERU: PEREZ DE CUELLAR WOULD CONSIDER RUNNING FOR PRESIDENT DATELINE: LIMA, Aug. 6 Former United Nations Secretary General Javier Perez de Cuellar (1982- 1991), the most respected man in Peru according to some opinion polls, has indicated that he would accept the nomination to run for president in 1995. In an interview on local television, Perez de Cuellar confirmed rumors that the Popular Christian Party had asked him to be an independent candidate, heading a coalition of parties. Perez de Cuellar criticized the government of President Alberto Fujimori, which he has generally supported until now, saying although he agreed with the need for structural adjustment, the necessary social emergency measures to cushion its impact on the people, were not being adopted. Perez de Cuellar stressed that "the Asian development model" of economic neoliberal policies and authoritarianism cannot be applied in Peru. He also disagreed with Fujimori's view of the role of political parties, which the president regards as "intermediaries which distort the will of the people." Fujimori has tried to substitute the political parties with a more direct form of democracy, using popular referendums to make important decisions. Perez de Cuellar said "it's unfair to say that the party system must be eliminated, for without political parties there is no democracy." The former U.N. secretary general acknowledged that Fujimori's counterinsurgency tactics have been successful, but disagreed with moves to introduce the death penalty, which the president hopes will be incorporated into Peru's new constitution. Copyright 1993 The Financial Times Limited; Financial Times August 6, 1993, Friday SECTION: Pg. 4 HEADLINE: A need to pedal out of poverty in Bolivia: The new president's problems in the poorest country of South America BYLINE: By CHRISTINA LAMB CROUCHED at the side of a dirt road in the 12 de Octubre market in El Alto, the working-class township on the rim of the canyon above the Bolivian capital, La Paz, with a huge pile of gnarled potatoes spread on a blanket in front of her, Mrs Celia Ticono de Medina does not think highly of economic stabilisation programmes. Wrapped against the biting Andean air, in a colourful shawl with a pink- faced baby suckling at her breast, she tips her bowler hat and opens her mouth to reveal rotting teeth, blackened from chewing coca leaves to stave off hunger. Mrs Medina, aged far beyond her 32 years, has journeyed all night on the back of a truck from the mining town of Potos to sell the potatoes for the equivalent of a few dollars, however long it takes. She has five children and is married to a miner who lost his job in 1985 during the government's radical adjustment programme, often cited as the most successful such revision carried out under democracy in Latin America. Mrs Medina is not convinced: 'You can't eat stability.' Bolivia has reduced annual inflation from 26,000 per cent to less than 10 - the lowest in South America - and is seen as a model of how to tackle hyperinflation and debt crisis in a democracy. But it also illustrates the fact that economic stability does not necessarily bring prosperity. The poorest country in the region, its return to economic growth since 1987 has barely outpaced population growth. Mr Gonzalo Sanchez de Lozada, the victor of the presidential election held in June, is due to be sworn in as president today - independence day. He was planning minister in 1985-89 and the main author of economic adjustment. Combating poverty and improving wealth distribution are the main challenges facing him and he has no doubt about what voters want. 'The onus is on me to get the economy moving and get money to the forgotten people,' he says. Mr Palmiro Sora Sauzedo, assistant director of Plan International, a development agency, warns: 'It's time to democratise the economy as well as politics. Otherwise that was the last vote for the free market option'. For the average Bolivian, the costs of balancing the budget have seemed more tangible than the benefits. Living costs spiralled after the government slashed subsidies and raised public sector tariffs; unemployment rose with the sacking of state employees, including 23,000 metals miners; drastic cuts in import tariffs have made life hard for local industry; the budget squeeze has hit provision of public services. According to the World Bank, Bolivia's per capita income has fallen more than 20 per cent since 1980 to Dollars 700 (Pounds 469.70) now. The rural population has been hit hardest. Bolivia has the highest percentage of rural poverty in the world, with 97 per cent of the rural population below the poverty line according to the UN International Fund for Agricultural Development, compared to 85 per cent in 1986. Also during this period, the rural population increased by 1.4m to 3.4m - about half the country's total. Nowhere is this clearer than on the altiplano, the high Andean plain on which 70 per cent of the rural population live. Scenes of llamas grazing on the shores of Lake Titicaca, under the snow-capped Mount Illimani, look misleadingly idyllic. Here average life expectancy is 46 years, infant mortality is 172 per 1,000 live births and family income averages 72 bolivianos (Pounds 11.40) a month. Mr Sandro Calvani, head of the UN Drug Control Programme in Bolivia and former World Health Organisation representative in Africa, says, 'poverty here is worse than in Ethiopia or Burkino Faso.' He is not surprised that, for many, growing the coca leaf is the only way. Some 10 per cent of the working population is involved in the coca trade, including many former miners. Bolivia is now the second largest producer of coca after Peru (and of cocaine after Colombia), generating some Dollars 650m-Dollars 700m a year, of which some Dollars 150m- Dollars 200m stays in the country. Rather than construct a real alternative to this ancient cultivation turned drug source for the developed world, Bolivia has become highly dependent on foreign aid. By contrast, foreign investment has been deterred by dithering government in the face of strong union opposition. Exports are declining - a trade surplus of Dollars 104m in 1989 had turned into a Dollars 561m deficit last year, the worst in a decade. Mr Sanchez de Lozada denies that the adjustment programme has worsened conditions: 'That's like blaming the fireman for the fire. People forget that, from 1980 till adjustment in 1985, GNP shrank 27 per cent because of the collapse in tin prices (Bolivia's main legal export) and the debt crisis. We found a very poor country with hyperinflation and left a very poor country without hyperinflation.' He blames the last government for not building on stabilisation. 'The problem is that, since then, we've had stagnation and thus not dealt with the terrible social problems left over from the 1980s.' The new president plans an ambitious transfer of wealth through the distribution of shares in state companies worth an estimated Dollars 4,000 per person. He declares: 'Stability is like a bike. We've stabilised and must now start pedallling, otherwise we will fall.' Copyright 1993 Reuters, Limited August 6, 1993, Friday, BC cycle HEADLINE: BOLIVIAN PRESIDENT TAKES OVER, CASTRO STEALS SHOW BYLINE: By Paul Mylrea DATELINE: LA PAZ, Bolivia Cuban leader Fidel Castro, on a first visit to the country where his companion-at-arms Che Guevara was killed, was cheered at the inauguration of Bolivia's new president Friday while the U.S. envoy was jeered. Castro stole the show as Gonzalo Sanchez de Lozada, 63, known popularly as "Goni", took over from outgoing president Jaime Paz Zamora promising to improve the lot of the poor of this Andean nation. "The economy should serve man, not statistics," Sanchez de Lozada, architect of Bolivia's free-market reforms as economy minister under Paz Zamora's predecessor, told Congress. "Let us hope we can soon say there are no children going to bed with the glint of hunger in their eyes," he said. But despite the pomp of the ceremony, attended by Presidents Carlos Menem of Argentina, Cesar Gaviria of Colombia and Alberto Fujimori of Peru as well president-elect Juan Carlos Wasmosy of Paraguay, Castro was the center of attention. Castro, mobbed by wellwishers and journalists since arriving Thursday, was cheered as he entered Congress, unlike Interior Secretary Bruce Babbitt, the U.S. envoy at whom the crowd whisteled. The veteran Cuban communist leader, relaxed and smiling, joined Sanchez de Lozada, Menem and Gaviria on the balcony of the government palace for the presidential greeting. Joking with journalists, he said he had been worried his Soviet-made airplane would not be able to land at the 13,000 feet high airport above La Paz and praised the coca-leaf tea drunk here to remedy the effects of altitude. "I came without mountain training. We're at half the height of Everest, and that's a lot," Castro said. Castro also said he was impressed that Bolivia had elected an indigenous leader as Sanchez de Lozada's vice-president. Vice President Victor Hugo Cardenas, head of an indigenous political party, addressed Congress in fluent Spanish as well as the native Aymara, Quechua and Guarani languages. In contrast, Sanchez de Lozada joked in his speech about the strong English accent he has when speaking Spanish after a youth spent in the United States and said he would take lessons from Cardenas. Sanchez de Lozada is due to have private talks with Castro Saturday. However, Castro's arrival, welcomed by miners- who Thursday vowed to donate a day's wages to help a beleaguered Cuba- students and union leaders, has not pleased everyone. The Bolivian army, which killed Ernesto "Che" Guevara in 1967, welcomed Castro with military honors on his arrival. Guevara, who accompanied Castro in his descent from Cuba's Sierra Maestra to overthrow Fulgencio Batista in 1959, came to Bolivia in disguise with a small group of Cuban revolutionaries to join leftist guerrillas in Bolivia's central mountains. But former military dictator army Gen. Hugo Banzer, who despite Paz Zamora's backing was defeated by Sanchez de Lozada in June elections, criticized the visit. "Castro sent people from his country to divide Bolivians, to sow death among Bolivians," Banzer said. Babbitt also criticized Castro's presence in Bolivia's festival of democracy. In what diplomats said was a reaction to U.S. displeasure, Paz Zamora suspended a planned decoration of Castro with a Bolivian medal of honor. Copyright 1993 Reuters, Limited August 6, 1993, Friday, BC cycle SECTION: Financial Report. HEADLINE: BEAR STEARNSHIRES FIVE FOR EMERGING MARKETS DATELINE: NEW YORK, AUG 6 (REUTER) Bear Stearns & Co Inc said it hired five professionals for its emerging markets research team from James Capel, all members of Capel's Latin America Research team. The company said Geoffrey Dennis, managing director, will head the emerging markets research team and will act as market and sectoral strategist for Latin America. The company said the other four individuals are Matthew Hickman, Carlos Laboy, Melissa Ruttner and Julie Dykstra. Hickman, managing director, will provide equity coverage of Brazil, Chile and Peru and also of the telecommunications industry in Latin America, while Laboy, associate director, will be responsible for covering the Mexican equity market. Bear Stearns said Ruttner, associate analyst, will cover the equity market in Argentina and Dykstra, assistant analyst, will continue to produce the daily fax which earned a number one team position for James Capel in the Institutional Investor Latin America Research team ranking. Copyright 1993 Reuters, Limited August 6, 1993, Friday, BC cycle SECTION: Money Report. Bonds Capital Market. HEADLINE: ARGENTINA CREDIT RATING DEALS BLOW TO ITS DEBT BYLINE: By Henry Tricks DATELINE: NEW YORK, AUG 6 (REUTER) Argentina got an unexpected knock that reverberated through the markets Friday when Moody's Investors Services Inc failed to upgrade the country's cautious credit rating. Moody's assigned a B1 rating to the dollar-denominated Bonos Externos (Bonex) of 1989, and a B2 rating to its par and discount Brady bonds. The top rating remains in Moody's "highly speculative" category. Many players were expecting a small upgrade, and some Argentine analysts went out on a limb and said the country should even be rated investment grade. "The fact they rated the Bradies B2 sounds like they decided they're not going to upgrade Argentina. That's obviously bad news for Argentina. I think it's unjustified," said John Purcell, head of emerging markets research at Salomon Brothers. Argentina Brady bonds sold off on the news, though traders said the mood was restrained. Pars were down 1-1/8 on Thursday's close at 55-5/8 percent bid, and FRBs fell 1/2 a point to 72 percent. Purcell said Standard and Poor's Corp, which recently visited Argentina, should come out with a rating fairly soon. He expected it to rate Argentina BB-minus, which is a notch higher than Moody's B1. Moody's equivalent of a BB-minus is Ba3. "Many people were expecting a Ba3," said one Argentine trader. "Some people in Argentina were even expecting investment grade which is ridiculous. To think it would come above Mexico doesn't make sense," he said. He said he was cautiously optimistic after the rating because it gave investors a reason not to get carried away. "There were a couple of sellers as soon as the news came out but most of our investors are very confident with Argentina." A debt trader at an Argentine bank said the rating may have caught a lot of U.S. investors off balance, however. He said some funds who would not usually make investments in the "highly speculative" category may have bought Argentine bonds on the premise that the country would be upgraded. "A lot of people may be finding themselves in deep trouble," he said. Elsewhere in the LDC debt market, Peru continued to race higher, climbing 2-3/8 percent to 42-5/8, as did the Dominican Republic which is rallying on hopes that a term sheet detailing its $ 775 million debt accord is ready. Dominican debt closed at 49 percent bid, 50 percent offered. It was at 47-1/2 percent bid Thursday. Venezuela was higher on short-covering, traders said. Pars were up 1/2 at 69-1/4 percent, DCBs were up the same at 67-5/8 and FLIRBS were a full point higher at 70-3/8 percent. Copyright 1993 The New York Times Company The New York Times August 6, 1993, Friday, Late Edition - Final SECTION: Section A; Page 11; Column 1; Foreign Desk HEADLINE: Peru Is Expected to Extend Death Penalty to Terrorists BYLINE: By NATHANIEL C. NASH, Special to The New York Times DATELINE: LIMA, Peru, Aug. 5 After the capture last September of Abimael Guzman Reynoso, the founder of the Maoist guerrilla organization called Shining Path, President Alberto K. Fujimori has said repeatedly that he would like to see the death penalty visited on the man whose 13-year insurgency has led to the death of almost 30,000 Peruvians. At a meeting in Brazil last month of Latin American leaders, President Fujimori said that if he had ever met Mr. Guzman face to face and had had a gun with him, "I would have sent him to hell." Whether the guerrilla leader will face execution is still an open question, since the Constitution does not permit the death penalty except in cases of wartime treason. Support in Congress But a vote in Congress this week has made it almost certain that leaders of Shining Path caught in the future run the risk of a quick judgment and speedy execution, as Peru poises itself to become the first Latin American country in recent years to expand the application of capital punishment. On Tuesday the new Congress -- elected last November to replace the Congress that Mr. Fujimori shut down last year -- voted overwhelmingly for a constitutional change providing the death penalty for terrorists. Voting by secret ballot to protect lawmakers from reprisals, the legislators approved the measure 55 to 21. That vote, and Mr. Fujimori's advocacy of capital punishment, reflect strong public disgust at the cruelty and violence of Shining Path and a sense that the group is in its death throes. Recent polls show that more than 60 percent of Peruvians favor the death penalty for terrorists, while about 30 percent oppose it. The new measure will now be incorporated into the new Constitution being written by Congress, which is almost certain to be approved in a referendum later this year. The death penalty provision causes concern among human rights groups and Western countries trying to edge Peru back to democracy after Mr. Fujimori's seizure of near dictatorial powers in April 1992. It comes at a time when hundreds of suspected terrorists are being tried in military courts where judges and prosecutors wear masks and have their voices distorted to avoid recognition. Defendants have been denied easy access to lawyers skilled in defending Shining Path members. They often do not see the evidence against them, and trials generally last no longer than a couple of days. Over the past year, almost 600 have been sentenced to prison for terrorism, including more than 250 who have drawn life sentences without parole. "We have real problems with the judicial process and the faceless judges, and that makes us concerned about how they will apply the death penalty," said one Western official. "There is a serious lack of due process in the judicial system in Peru, and it is still troubled with corruption." Most legal experts in Peru expect that in the end, military tribunals presided over by officers who are neither lawyers nor judges will mete out the death sentences. If the death penalty is approved, Peru will become the first country to break its commitment to the American Convention on Human Rights, signed by 15 Latin countries in 1969. The San Jose Agreement, as it is commonly known, prohibits countries from expanding capital punishment. "If Peru agrees to the death penalty, it will have to renounce the San Jose Agreement, since there will be an obvious contradiction," said Samuel Abat, an attorney for the Andean Commission of Jurists, a human rights group here. "We believe it is an unfortuate precedent that military tribunals are not only judging civilians, but will be given powers to sentence them to death." The issue divided the opposition to President Fujimori in Congress, with moderates saying the violence of Shining Path justified the death penalty. But Henry Pease Garcia, of the Democratic Movement of the Left, described it as "more revenge than justice." "It is killing in cold blood," he said, "and the state does not have that right." Copyright 1993 Reuters Limited The Reuter Washington Report August 6, 1993, Friday, BC cycle HEADLINE: THE REUTER DIARY OF GOVERNMENT AGENCIES Week of Aug. 6, 1993 The diary editor is Steve Ginsburg. Tim Ahmann, Eric Beech, Melissa Bland, Will Dunham, Peter Ramjug and Paul Schomer also are available to help you. If you any questions, please call 202-898-8345. For service problems call 1-800-435-0101. Events in this diary are subject to change. This diary, updated weekly, is filed every Friday and in updated form on Monday. Contact numbers and Federal Register pages are listed when available. [deleted] OFFICE OF NATIONAL DRUG CONTROL POLICY OFFICIAL ACTIVITY Aug. 9: Director Lee Brown holds a photo opportunity and ceremony to swear in 200 local children as drug-free marshals, as part of the national "Lead the Way to a Drug-Free USA" campaign. (Mary Wible or Tyler Gronbach, 703-549-9592) Aug. 9: Director Lee Brown conducts a briefing at the USIA's Foreign Press Center on his upcoming trip to Panama, Bolivia, Colombia and Peru. (202-724-1635) Aug. 10-17: Director Brown travels to Central and South America, with scheduled stops in Panama, Bolivia, Colombia and Peru. Copyright 1993 News World Communications, Inc. The Washington Times August 6, 1993, Friday, Final Edition SECTION: Part F; COMMENTARY; Pg. F3 HEADLINE: For a new international drug policy BYLINE: Rensselaer Lee / Patrick Clawson U.S. overseas anti-narcotics policy is adrift and must be put back on course. For many years, we have pursued two main policy objectives: * Criminal enforcement - attacking and disabling narcotics trafficking infrastructures by supporting and occasionally conducting front-line operations to eradicate drug crops, dismantle laboratories, constrict transport options, and generally impede the export of illegal drugs by narcotraffickers. * Political stability - limiting the intrusion of drug dealers into the political systems and economies of drug-source countries, helping such countries cope with the narcoterrorist threat, and strengthing legitimate ruling elites. Unfortunately, we have overemphasized the first objective - and to little avail. Our overseas drug enforcement record is unimpressive if not downright dismal and offers a poor return for our substantial multi-decade investment. Nonetheless, the policymakers exhibit little institutional memory about the virtually impossible task of reducing the supply of any drug in the face of continuing demand. From Prohibition to Operation Blast Furnace to the Bush administration's Andean Strategy, our optimism and rhetoric far outstrip results. Major production and trafficking complexes in the Andes, Southwest Asia, and the Golden Triangle of Southest Asia persistently thrive, impervious to international enforcement programs. Heroin and cocaine are increasingly pure and accessible in the United States. For example, over the past 13 years, increases in U.S. funding for anti- drug programs in South America directly correlated with increases in Andean cocaine production. During the Bush administration, expenditures on such anti-drug programs rose from $190 million to almost $380 million, while the imputed production of coca leaves and cocaine expanded by more than 10 percent from 1989 to 1992. In the end, cocaine was purer, cheaper and more readily avaiable. How can our sophisticated international drug policy be so ineffective and even counterproductive? First, narcotics industries do not rely on irreplaceable components. Drug crops, laboratories, processing chemicals, aircraft, money, and even narcotics producers and traffickers themselves are readily replaced in the pursuit of seductively high illegal drug profits. If we disrupt the Medellin Cartel's operations, the Cali Cartel takes up the slack. Coca plants eradicated in Bolivia are offset by expanded cultivation in Peru. If by some chance we entirely shut down South American cocaine production, street prices temporarily would rise in the face of restricted supply; yet enterprising narcotraffickers undoubtedly would set up shop in other countries with amenable climatic and social conditions - or, perhaps worse, peddle alternative drugs such as opium or heroin. Second, narcotics industries are dynamic, evolving and increasingly efficient. Under the pressure of new enforcement techniques, storage technologies and smuggling strategies have improved. For instance, Colombian cocaine laboratories are equipped with chemical-recycling plants. U.S. estimates of potential Bolivian coca leaf production rose to record levels in 1992, despite declining acreage in production - a phenomenon likely attributable to increasingly capable farmers. Coca cultivation time - the period from planting to first harvest - has diminished as much as 50 percent since the early 1980s. And ordinary farmers all over the Andes are acquiring expertise in the first and second stages of cocaine processing, spurred by the prospect of relatively extraordinary economic returns. At the same time, the limited resources allocated to politically supporting our Andean partners have produced some solid achievements. * Pablo Escobar no longer holds a seat in the Colombian Congress. * The Medellin Cartel's pretensions to power have been blocked, and its leadership is in disarray. * Narcoterrorist violence is abating in Colombia. * Narcocratic regimes no longer dominate Bolivia and Panama. * Our economic assistance to Bolivia has diminished the relative economic clout of the cocaine industry and furnished a foundation for positive economic and political development. Such political and social victories are important because they illustrate the value of truncating the economic and political reach of drug dealers and their criminal cohorts, despite doing little or nothing to halt the flow of drugs into the United States. If reducing domestic demand rather than foreign supply constitutes the long-term solution to the U.S. drug problem, the United States still can apply its international resources to hobbling the malevolent drug lords that threaten the stability of nations in Latin America and elsewhere. A pragmatic U.S. policy thus would expend fewer resources on the traditional tools of anti-drug warfare - interdiction, eradication, and crop substitution - and would focus instead on dismantling the leadership structures of multinational trafficking organizations, and bolstering the criminal justice institutions, the political will, and legal economies of drug- source countries. By implication, the new policy also would remove U.S. personnel from the front lines of the drug war, minimizing the risk of physically dangerous and politically incendiary confrontations with crowds of peasants and small-time traffickers - an especially severe prospect in guerilla-torn countries such as Colombia and Peru. Rensselaer Lee, an associate scholar at the Foreign Policy Research Institute, is the author of "The White Labyrinth: Cocaine & Political Power." Patrick Clawson is editor of Orbis, the Foreign Policy Research Institute's quarterly journal of world affairs. GRAPHIC: Illustration, NO CAPTION, By Barbara Cummings/LA Times Syndicate