On the flight path to sustained economic development

Relying on considerable mining and energy resources, Peru has embarked on a new phase of development, which places the country at the centre of South America’s geopolitical concerns. Against the backdrop of the unprecedented Lima exhibition on the international scene, H.E. Harry Belevan-McBride, Ambassador of Peru to France, explains for us the directions favoured by President Alan García to maintain the sustained economic growth of the country while intensifying the fight against poverty.

The Diplomatic Letter: Mr Ambassador, re-elected on 4 June 2006, sixteen years after he first became Head of State, President Alan García begins the third year of his term in office. How would you summarize the reforms begun to date? What priorities has he set until the end of his term in 2011?

H.E. Harry Belevan-McBride: To mention only priorities, having dedicated the first third of his term in office to consolidating policies for economic and legal stability, that is, for a climate of trust in which to attract both Peruvian and foreign investors, President Alan García has placed social investment at the top of his list of projects to be tackled, that is to say, education, food and health, without losing sight of the need to ensure good management of public resources.
The main objective of the Peruvian government is therefore to eradicate poverty. It is an ambitious undertaking, which is actually starting to bear fruit. The percentage of the population living under the poverty line, which was 50% when the government took office, needs to be reduced further in the wake of what has already been achieved, to be brought down to 30% by 2011. The fight against poverty rests upon two fundamental pillars: the creation of jobs via productive investment and the direct effect of Peru’s strong economic growth on the least affluent section of the population. 

T.D.L. : Carried by the sustained growth of its GDP, which reached 8.9% in 2007, the Peruvian economy remains marked by a high level of poverty, the reduction of which the government has set as a priority. Beyond social programs such as “Juntos” (“Together”), what measures are favoured to encourage a better distribution of the benefits derived from this growth? What approach is advocated to encourage the social and professional integration of the Quechua-speaking and native populations?

H.E.H.B-MB: In 2007, poverty was reduced by more than 5%. This is a significant achievement, and proof that economic growth has a positive impact on the most deprived layers of the population. But, above all, it is proof of the efficacy of the economic and social model implemented. Moreover, this achievement allows us to contemplate being able to reduce poverty levels to barely 10% of the population by 2015.
Beyond the “Juntos” (“Together”) program, there are other programs administered by different government services, to which funds have been allocated to the sum of 700 million Euros in 2007 and 1 billion Euros for 2008. Among these programs, the “National Growth Strategy” sets as an objective for 2011 a 9-point reduction in the level of malnutrition of children under the age of 6. The “Integral Health Security” program is particularly aimed at people in situations of extreme poverty, who have no health insurance.
I would add that the initiatives implemented in the country as a whole with regard to the supply of electricity, drinking water and road construction, are testament to the government’s ongoing concern for the most disadvantaged sectors. As to the national roads, the investment budgeted is of the order of 2 billion Euros, with a resultant increase of 50% in the number of tarred roads. These building projects also represent thousands of additional jobs.
The gas pipeline linking the town of Pisco – the place of origin of our national drink – to the North will be inaugurated very soon. And so will the projected gas pipeline to the mining areas in the centre of the country, which will supply these regions with natural gas. And the Andean pipeline, which will pass close to Cusco, will reach to Arequipa, the country’s second major town, and from there to the port of Ilo.
On the issue of multilingualism, there is legislation providing for intercultural bilingual education, which underpins our national policy in this area. In the context of the intensive work of developing the rights of indigenous people, these laws ensure, for example, that teachers applying for positions in non-university tertiary education can take examinations in their mother tongue.

T.D.L. : The reduction of social inequalities remains dependant on efforts to diversify the fabric of the Peruvian economy, which is still dominated by the agricultural exports and mining sectors. What initiatives are envisaged in this area? What possibilities arise from the discovery of an important natural gas deposit in the Cusco region?

H.E.H.B-MB: The agricultural exports and mining sectors are indeed of crucial importance for the nation’s development and the relief of poverty. The agricultural exports sector has become one of the most dynamic of the Peruvian economy. Activities in the coastal areas of Peru are perfectly integrated into the production, processing and export chain. In the case of regions situated in the high plateaux, which are still insufficiently linked to the national economy, the government has established a strategy for the development of the territory that tackles rural poverty on several fronts. This strategy is conceived with a view to increasing global markets for our products. To this effect, the « Sierra Export Program » was created to modernize rural competitiveness. This program gives support to the creation of economies of scale through the penetration of markets and the elaboration of strategic alliances. It incorporates assessment and auditing systems to ensure the transparency of revenues and the future support for the program. To put it simply, this program seeks to adapt production to the market, so that it can be fed into the national and international marketing and distribution network. At present, we have “priority production programs” for certain products such as seafood, avocado, processed potatoes, camels, sheep and trout.
As you know, in the mining sector, Peru is a leader: first world producer of silver, second of copper and zinc and fifth of gold. Mining exports represent more than 50% of our total exports. The receipts and profits obtained are redistributed to the inhabitants of the areas concerned by direct transfer to municipal and regional governments. Furthermore, the central government has put in place a “Mining Program of Solidarity with the People”, through which the voluntary economic contributions of mining enterprises are used to further social development. This program contributes to improving the living conditions mainly of the people in the areas where mining activities occur, with priority given to: feeding babies and pregnant women; primary education and technical training; health; the development of public management capabilities; the promotion of production chains; basic infrastructures and important local or regional infrastructures that give preference to local industry.
The development of the Camisea project is fundamental for the energy strategy. Camisea is a reliable source of low-cost energy. It directly profits electricity consumers and improves the competitiveness of industry. Similarly, the use of natural gas instead of fossil fuels such as diesel or coal leads to environmental benefits by reducing greenhouse gas emissions. Finally, Camisea helps us to reduce our current trade deficit in hydrocarbons, mainly by replacing imports of diesel and LPG while favouring exports of LPG surplus. It is the reason why the State promotes the change to natural gas as the main national energy source. 

T.D.L.: President Alan García has put in place a National Anti-corruption Office, to which he wants to give greater institutional powers than the previous organism given this responsibility had at its disposal. What directions are being advocated in this respect?

H.E.H.B-MB: Indeed, the government has created the National Anti-corruption Office, giving it the status of an independent authority. This Office is in charge of promoting public ethics and fighting corruption head on, by means of preventive measures, investigations and other interventions, as well as the elaboration, implementation and follow-up of appropriate public policies. The Head of the Office will also be able to attend meetings of the Council of Ministers. This Office has been provided with all the necessary resources to achieve its objectives, which will not prevent for all that the concurrent intensification of the work of the Inspector of Finances and the Public Ministry. President García has insisted that this Office should be totally independent in carrying out its investigations and in its dealings with other entities.

T.D.L.: Launched in 2002, the decentralization of the State remains incomplete, as it is hampered by tensions between some regional presidents and the central government. How do you explain the regional opposition voiced over some of the measures introduced in the sectors of agriculture, education and tourism? What conditions would be required to reach a consensus to implement this reform? 

H.E.H.B-MB: Talking of tensions is perhaps an exaggeration. But I admit that the rethinking of the process of decentralization makes it necessary for the executive and legislative powers, as well as regional and municipal governments and civil society entities to reach consensus.
For the measures implemented by central government to achieve tangible results, not only in agriculture, education and tourism, but in all other sectors as well, it proves necessary to accelerate the implementation of a national plan for decentralization, so that regional governments can promote their own plans for development in the context of a national vision. In order to give concrete expression to decentralization as an instrument of development, this process needs to be approached with a view to improving the quality of life at the local level, yet in harmony with the national interest. It is also necessary to encourage the active participation of civil society, which is the same as saying that the State must fulfil its role of promoter, by contributing the definitions and reforms needed to achieve a consensus.

T.D.L.: The shooting last May of one of the commanders of the Shining Path guerrilla movement, Juan Laguna Domínguez, marked a new victory in the battle against terrorism in your country. What capacity for action does this Organization still have in your estimation? What do you perceive to be the regional repercussion of the conflict opposing the Colombian government to the guerrilla led by the FARC?

H.E.H.B-MB: Your question gives me the opportunity to insist on what I shall never cease to repeat to my European friends: the Shining Path, the MRTA, the FARC, are not “guerrilla” movements, but quite simply terrorist movements! Why is it that people, the media, even politicians, in Europe and almost everywhere in so-called developed countries, each time they mention subversive groups on their territory – such as the ETA, the Red Brigade, Action Directe and so many others – always describe them as terrorist movements, whereas when they refer to similar groups in Latin America, they are always “guerrilla” movements, or even insurgents or just rebels? Why this treacherous language, this “political grammar”? Why this ambiguity which is nothing short of discriminatory towards certain countries? Come on, this is not right! Furthermore, the Shining Path is considered to be a terrorist group by the European Union and by the United States, but this does not seem to be enough to stop people calling them a “guerrilla” movement. A guerrilla movement is something quite different, that has after all a certain measure of nobility, whatever one might say! So, let’s not sully its name. On the other hand, terrorism is, quite simply, institutionalized murder! 
As regards the Shining Path, for some time now the somewhat sparse activities of this band of terrorists have been limited to a few central valleys of Peru as well as to drug-trafficking operations and acts of delinquency pure and simple. The few “senderistas” still active today are mostly hired killers. 
This being said, the Peruvian State naturally continues in its duty to monitor and combat the activities of this group of delinquents who, according to the report of the Truth and Reconciliation Commission – a commission of which no one in Peru or elsewhere has ever doubted the most complete political independence – was responsible for the atrocities perpetrated on tens of thousand of Peruvians between 1980 and 1990. Neither is the State letting down its guard on another, also bloodless, terrorist group that appeared during those years, the Tupac Amaru Revolutionary Movement, so-called after an Indigenous Peruvian hero, whose name has been sadly sullied by these assassins, as they have sullied the very term “revolution”.
As to regional repercussions of the conflict opposing the Colombian government to the FARC terrorists, my perception, to be honest, is that there is in fact a certain lack of perception in some countries of the eminently criminal element that these terrorists represent for Colombian society, which the elected democratic Government has a duty to protect by any constitutional means at its disposal.

T.D.L.: Extradited to Peru by Chilean Justice, the trial for violations of human rights of the former President Alberto Fujimori began on 10 December 2007. Without pre-empting the conclusions of a procedure which promises to be drawn out, how would you describe what is at stake in this trial, particularly as regards the strengthening of Peruvian democratic values? 

H.E.H.B-MB: The extradition of former President Alberto Fujimori represents a major event in the process of consolidation of State law in my country, as it has allowed for him to be tried in Peru. This extradition marks also, in my opinion, a step forward compared to many other countries, and I say this in all humility. Indeed, it seems to me that it is the first time a former president has been extradited to be tried in his own country. This event also reflects therefore an evolution in international law.
The message is clear: nationalities, borders or even the most prestigious position a person can hold cannot protect them from the long arm of the law, particularly when the issue affects the international community, such as do international crimes, crimes against humanity, the violation of human rights and corruption. In addition, it must be noted that in this trial, contrary to other trials conducted by special courts or by the International Criminal Court, it is the principal of territoriality that has won over; that is to say, it is Peruvian justice which has assumed jurisdiction over the accusations directed at the former President of Peru for crimes presumed to have been committed in Peru. This process is therefore of fundamental value in the consolidation of our democratic institutions and constitutes a remarkable proof in the eyes of Peruvians as well as those of the international community, that Peruvian justice guarantees legal security and the right of legitimate defence for all citizens.

T.D.L.: Considered as the second producer of cocaine, your country as readopted a strategy of eradication of coca plantations. How is this strategy implemented? What kind of cooperation does Peru engage in with other countries on this issue, particularly in the region?

H.E.H.B-MB: Illicit drug trafficking is a global problem, which affects not only the lives and health of individuals, but also the very security of States. Peru considers that the fight against this scourge is well beyond the domestic capabilities of any country. Consequently, it is imperative that national efforts are reinforced with international cooperation, on a shared responsibility basis.
Within our borders, the link between drug trafficking, terrorism and organized crime represents a menace to national security. For this reason, the government sees this issue as a priority and as such has declared a total war against drug trafficking and other related activities, in the context of a comprehensive strategy. This is a national policy which reflects a consensus between political forces and civil society over what has been termed in Peru the “National Agreement” with a view to establishing a general framework for our anti-drug policy. The National Commission for Development and Life without Drugs (DEVIDA), an organism placed under the responsibility of the Presidency of the Council of Ministers, is charged with developing the appropriate strategy. For the five-year period 2007-2011, the strategy is based on the three key elements of prevention, interdiction and alternative development.
In the area of international intervention in the fight against illicit drug-trafficking, Peru resolutely participates in the activities undertaken by the specialized agencies of the United Nations System, the Organization of American States (OAS) and the Andean Community. At the bilateral level, we have signed twenty-three agreements with the countries most concerned with this issue in America, Europe and Asia, with the aim of developing policies, joint strategies and programs for the prevention, control and repression of the production and trade of illicit drugs, and of obtaining a commitment from signatory countries to reciprocate, in exchanging information or personnel for training purposes as much as in providing mutual scientific and technical assistance.

T.D.L.: The leaders of twelve States of South America gave birth on 23 May last to the Union of South American Nations (UNASUR). Peru being the third most important country in the region, and member of the Andean Community of Nations (CAN), what role does your country envisage for itself with this new organization? To what extent can the disagreements concerning economic integration and on the issue of defence be overcome?

H.E.H.B-MB: UNASUR was created with the aim of building a South-American Identity, and of developing a regional space to debate political, economic, social, cultural, and environmental issues as well as issues relating to energy and infrastructures. Peru is convinced that the integration and union of South American Nations represents an essential component for its own development and for this reason, we will do all we can to ensure this process, with its ambitious objectives, becomes reality.
The creation of UNASUR should not be seen as a menace to the Andean Community (CAN). On the contrary, the process of Andean integration can derive substantial benefits from it. Indeed, there are within the CAN different views between its members, particularly on trade issues. Nevertheless, important efforts have been made to harmonize the various interests while taking account of the asymmetries within the region. One can cite as an example the agreement recently concluded with the EU on the occasion of the Fifth LAC – EU Summit held in Lima last May. Indeed, we managed to get the EU to accept the principle of variable geometry in the discussions, allowing countries to conduct negotiations at different rhythms. These will be defined on the basis of the three pillars which make up the association agreement, namely: political dialogue, cooperation and trade. In this way, if for example, a nation of the CAN is unable to negotiate on the trade pillar, it will be excluded from the negotiations, but will retain the right to pursue negotiations on the other two. 
Moreover, we are all aware of the need to create without further delay mechanisms of trust, which can alleviate or at least greatly reduce the need to spend on armament, which is so expensive nowadays. In fact, integration and the construction of a South-American identity represent the best way to tackle the political disagreements in the South-American space and discourage a rush to arms, thereby avoiding having to direct precious resources away from the greatest challenge we share: fighting the poverty afflicting major sections of our populations.

T.D.L.: The Fifth Latin America Caribbean – EU Summit took place in Lima on 16 and 17 May 2008. What, in you view, is the scope of the measures inscribed in the final declaration, particularly with regard to the environment (EUrocLIMA Program) and the reduction of poverty? More generally, for what sectors of industry would access to the European market be most advantageous for your country? What direction does the Lima agreement favour on this point?

H.E.H.B-MB: The Lima Summit ended with an ambitious declaration, expressing the determination to engage in the fight against climate change and poverty. This meeting of 60 Latin American and European dignitaries has given a new impetus to the alliance between the two regions – an alliance already defined as strategic during previous summits -, by the adoption of the Lima Declaration entitled “Addressing our Peoples’ Priorities Together” and establishing an agenda for the years to come.
The Lima Agenda focused first on the eradication of poverty, inequality and exclusion. I should point out that the central theme of the Fifth LAC-EU Summit was not “social cohesion” per se, which was the theme of the Third Summit of Guadalajara, but rather the three facets, of poverty, inequality and exclusion, that make up social cohesion.
Measures have thus been adopted for the implementation of effective social policies, aimed at encouraging an economic growth that favours redistribution and at promoting social participation and a sense of ownership. The battle against poverty, inequality and exclusion, taking into account equitable social development, has now become a priority for our association.
I am convinced that what will be remembered about the Lima Summit will be its objectives and the compromise it reached to eradicate poverty through the elimination of illiteracy and malnutrition by 2020. Even if the natural dynamics of these summits represents an encounter between two worlds with totally different realities, it must be pointed out that the Lima Declaration managed, at least, to obtain concrete agreements thanks to follow-up mechanisms, which moreover are also concrete. So in a way, the next summits will also be instruments to monitor progress.
The second theme of this summit related to the environmental dimension of relations between the two regions, climate change and energy. The major objective of our two regions is to promote what is called nowadays sustainable development, which combines economic and social development with the protection of the environment and natural resources, and which banishes simultaneously the unsustainable patterns of production and consumption we have today. To achieve it, our countries have agreed to enhance cooperation and, specifically, to limit climate change and its effects, and also to ensure the protection and sustainable use of biodiversity, natural resources and energy, many elements that are strongly represented in Latin American countries and which perhaps hold the key to our future development. 
In Lima, Latin American and European countries also reaffirmed the principal of common but differentiated responsibilities according to the respective capabilities and historical development of each region. Also, we have all recognized that it has become imperative that we implement environmental policies as soon as possible, with more integrated structures that build on existing institutions within the United Nations, so as to avoid having to create new agencies.
The solutions are however far from simple. We must adopt different patterns of production and consumption, and ensure the sustainable use of natural resources, through, amongst other means, technical and scientific cooperation, as well as the promotion of financing and investment flows, which thus become an important consideration for Latin America and the Caribbean. In this way, the decision to achieve tangible results in the context of the Bali Action Plan must lead to more precise agreements that those that have been concluded up until now in other international arenas, so as to allow for a full and comprehensive application of the United Nations’ Framework Convention on Climate Change as well as to conclude a global agreement for the second commitment period of the Kyoto Protocol, post 2012.
Further to these agreements, strengthening the mechanisms of the carbon market is particularly important for countries of Latin America. To cite but one case, the 103 projects presented by Peru for the implementation of the Mechanism for Sustainable Development would represent investments totalling more than 3 billion Euros.
For countries of Latin America and the Caribbean, it was very important in Lima to stress the importance of the principle of the States’ sovereign right to manage and regulate their own natural resources. But we are also conscious of the importance for Europe of strengthening a suitable regulatory framework to encourage investments into our region, and, in particular, those that bring technology designed for a better use of clean and less carbon emitting energy resources, for improving energy efficiency and for the production and use of renewable energy sources.
We have thus made sure that, in our efforts to tackle climate change, we respond, at all levels, to the challenges of conservation and sustainable use of biodiversity, forests, as well as hydro-biological and water resources and that we fight against desertification and ensure the good management of chemical substances. That is why we have agreed to establish a joint LAC-EU environmental program, coined “EUrocLima” by the French, for the benefit of countries of Latin America and the Caribbean. This program defines as main objectives the sharing of knowledge and the guarantee of synergies as well as the coordination of current and future actions in the area of climate change. Moreover, we have also committed to applying the EU’s recent Global Climate Change Alliance, aimed at less developed countries and to ensuring that these initiatives take account of the need for an energy transition.
And to answer your last question, I would add that for Peru, as the host country, but also for countries of Latin America and the Caribbean, the expansion, rather than the opening, of European markets constitutes a gradual process resulting directly from the summits between our two regions.

T.D.L.: On the margin of the LAC-EU Summit, President Alan García was able to talk with French Prime Minister François Fillon. In what areas could the Franco-Peruvian political dialogue be taken further? What new benefits can the Peruvian economy offer French enterprises, in the light of its current dynamism and the bilateral tax agreement recently approved by your country? What cooperation ties in the cultural and scientific fields appear the most symbolic and promising?

H.E.H.B-MB: I am absolutely certain that Peru is one of the Latin American countries with the most potential to establish privileged ties with France, on the basis of our country’s efforts to consolidate its democracy and of its truly exemplary growth and economic development. Our countries share the same democratic values, a respect of human rights, a free market, as well as convergent views on environmental issues. There are also other issues on which we agree that are hardly talked about, for example the need to reform international organizations and to arrive at a greater transparency of the international financial system.
It is in fact for all these reasons that we must put right an enormous anomaly in the Franco-Peruvian relations: indeed, France does not figure among the fifteen major investors in Peru and this despite Peru’s macroeconomic stability and a legal framework that is favourable to investments! Furthermore, our country has recently obtained the investment certificate of the international financial ratings agency, Fitch. We have a series of large investment projects which could interest French enterprises, mainly in the sectors of energy, infrastructures, transport, water treatment, environment protection and tourism.
Peru and France also share the privilege of being cultural powers that have enriched humanity’s heritage. It is therefore essential that we strengthen the exchanges we have already established between our two countries. I am particularly sensitive to the need to intensify university cooperation, particularly through the “Raúl Porras Barrenechea” network, and the strategic alliance of national universities, as well as to multiply exchanges, in the scientific and technological fields and in the sector of gastronomy, in particular. The furtherance at the highest level possible of Peru’s cultural presence in France is an ongoing concern of mine, even if often the financial means are limited. I would like to stress on this point the success of the art exhibition “From the Chavin to the Incas” which was held in the Petit Palais in 2006, as well as the exhibition of Paracas weavings that is now showing at the Museum of the Quai Branly. This year, we have prepared a vast program of activities around the theme of the International Year of the Potato. Peru will also be the guest of honour in September at the International Fair of Caen, a commercial and cultural festival which attracts every year almost half a million people. Lastly, in 2009, among other activities, we will be celebrating the 400 years of the publication of the “Royal Commentaries of the Incas”, the first written expression of American “métissage”.
One of the most sensitive issues that I am endeavouring, as Permanent representative of Peru to UNESCO, to reopen for discussion concerns the cooperation in the fight against the illicit trade in Peruvian cultural goods and more precisely to obtain the return to our country of this heritage which is being held illegally. As regards our relations with France, we are interested in the elaboration of a framework for bilateral cooperation, like those that already exist with other countries and which would allow for joint and effective action on this issue, which if it is sensitive is nevertheless legitimate.