Heavy debt reservicing by Peru

["Chris, London" <100423.2040@xxxxxxxxxxxxxx>]

Peru will have to pay its foreign creditors over 1 billion
dollars per year in 1996 and 1997. This is almost 20% of
revenues from exports, and is regarded even in capitalist
circles as too high a ratio.

Although economic activity, measured in capitalist market terms,
rose 11.9% in 1994 and 6.9 in 1995, in 1996 it will probably
be only 2.5%

Total debts have been estimated at 27.5 billion dollars.
Alain Garcia (president 1985-90) had declared a moratorium on
repayments. Fujimori revoked this.

A 150 page document known as the Brady Plan for Peru,
was negotiated between JP Morgan Bank on behalf of the government
of Peru, and Citibank representing the creditor banks.

Sounds a fair and equal arrangement doesn't it?

The government of Peru will probably agree to a manoeuvre to
rebuy about 1 billion dollars of its debt at half the face
value. This would increase the austerity and increase the burden
on local companies and taxpayers.

All this illustrates the shift from the national bourgeois politics
of Garcia to the neo-liberal politics of Fujimori.

Chris Burford, gleaned from IPS.




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