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HEMISPHERE HIGHLIGHTS

AMERICAS PROGRAM

April 2003, Volume II, Issue 4
www.csis.org

Up Coming Events in HEADLINES:
April
CANADIAN GOVERNMENT DECIDES NOT TO PARTICIPATE IN
April 1 – Friends of Gaviria IRAQI CONFLICT, LEGISLATIVE AND MUNICIPAL ELECTIONS
HELD IN EL SALVADOR, FORMER PARAMILITARIES
April 14 – Economic Prospects THREATEN TO PARALYZE GUATEMALA, VENEZUELAN CTV
in Brazil LEADER GRANTED ASYLUM IN COSTA RICA, VIOLENCE
ESCALATES IN BRAZIL, CHILEAN CENTRAL BANK PRESIDENT
April 18 – Alternative Options RESIGNS, COLOMBIAN MILITARY AND DEFENSE MINISTER
for Development in South AT ODDS, MONTESINOS TO FACE 57 CHARGES.
America
Economic Consequences of the Middle Eastern
Publications: Conflict on Latin America

Hemisphere Focus The Iraq war highlights a number of economic problems
that hemispheric countries must face simultaneously. The
• Will Peru Shine continued slow U.S. growth reduces the dynamism of U.S.
Through, by Veronica imports from the hemisphere complicating their growth. The
Prado uncertain political atmosphere throughout the world discourages
the capital inflows that are vital to the hemisphere’s economic
• Mexico: The Vote that development. Finally, the actual fighting in Iraq is having a
Wasn’t, by Luis Rubio differential effect on hemispheric countries, favorable in income
terms for the oil exporters (Mexico and Venezuela in particular)
• Election Analysis of and unfavorable for the oil importers. The Americas Program
April Provincial will soon release a Hemisphere Focus on the economic impact
Election in Quebec, by of the Iraq war on the various Latin American and Caribbean
Andre Beleieu countries and how the war is affecting their relations with the
United States. Sidney Weintraub
Policy Paper on the Americas

• Inaugural Issue of the

CSIS Mexico Project
Congressional
Records Series: The
Spring 2002 Term of
the Mexican Congress,
by Jeffrey Weldon

Americas Program • Center for Strategic and International Studies
1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

NORTH AMERICA

With 80 percent of CANADA
Quebec voters opposed
The provincial election campaign kicked off in Quebec, with the April 14
to war in Iraq, and election is shaping up to be a close contest. With Iraq overshadowing the
many Quebeckers tired campaign, three main candidates were contesting the election: 1) Bernard
of the sovereignty issue, Landry, the incumbent premier from the separatist Bloc Quebecois (PQ) party,
who is campaigning on a social democratic, center-left platform; 2) Jean Charest
the election could be health and education: 3) and Mario Dumont, the voice of the Action
decided on the issues of Democratique du Quebec (ADQ), a new arrival in mainstream Quebec politics
advocating a right-wing, small-government platform in Canada’s most socially
health and education, liberal province. Two weeks into the campaign, Landry remains ahead of
which make up two- Charest, but recent polls suggest that the gap has narrowed to a few percentage
points. With 80 percent of Quebec voters opposed to war in Iraq, and many
thirds of Quebec’s Quebeckers tired of the sovereignty issue, the election could be decided on the
overall budget. issues of health and education, which make up two-thirds of Quebec’s overall
budget. Additionally, with all parties offering clear choices, and many voters
Paul Cellucci still undecided, the third place ADQ could also be the deciding factor in the
confirmed election, as its campaign has shown the ability in the past year to attract voters
from the largely pro-PQ francophone vote, as well as the largely pro-Liberal
Washington’s anger federalist vote. Andre Belelieu.
with an unusually
After months of sitting on the fence, the Canadian government announced
undiplomatic speech on March 18 that it would not be participating in a war in Iraq. The
on March 25 to the Chretien government expressed disappointment with the failure of diplomacy,
Economic Club of and pledged to keep Canada out of a war not supported by the United Nations.
Canada in Toronto, Canada’s liberal parties, the New Democratic Party and the Bloc Quebecois,
where he expressed immediately supported the government’s decision, while Chretien’s position
came under heavy fire from Canada’s business community, as well as its
“disappointment” with conservative parties, the opposition Canadian Alliance, and the Progressive
Canada’s decision. Conservative party. While the government’s decision reflects the opinion of a
majority of Canadians, it has also angered many in the United States, causing
further strains in a bilateral relationship already affected by recent trade
disputes. Paul Cellucci, US ambassador to Canada, confirmed Washington’s
anger with an unusually undiplomatic speech on March 25 to the Economic
Club of Canada in Toronto, where he expressed “disappointment” with
Canada’s decision, as well as frustration with a series of anti-American
comments made by Liberal backbenchers in the House of Commons. While
Canada-US relations remain strong, Cellucci’s speech is the first indication by
the United States that relations could enter a deep freeze in the near future.
Since the White House itself reportedly approved Cellucci’s speech, the
ambassador’s comment that “security trumps trade,” there is some concern that

Americas Program • Center for Strategic and International Studies
1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

In February, the the United States may further tighten security at the Canada-US border, which
committee found that could have a significant impact on the movement of Canada’s exports to the
the party had violated United States. Andre Belelieu.

Article 49 of the Overshadowed by Canada’s decision not to support a war with Iraq, the
Federal Electoral Canadian government continued its efforts to support America’s war
Code by receiving $50 against terror. In the same speech confirming that Canada would not participate
million dollars of in Operation Iraqi Freedom, Prime Minister Jean Chretien pledged to keep
Pemex funds funneled operational Canadian frigates and troops currently stationed in the Persian Gulf
through the 90,000- as part of Canada’s contribution to the war on terror. Additionally, the Canadian
member strong Oil government announced that it was pledging an additional $250 million (CDN) to
Workers Union. the reconstruction effort in Afghanistan. These decisions come on top of
Canada’s continuing cooperation at the Canada-US border, where Canadian
officials have increased inspections and assigned additional staff at key border
points in line with America’s decision to elevate the homeland risk to Code
Orange. While Canadian cooperation remains strong in the war on terror, this
contribution will be overshadowed by Canada’s decision not to participate in a
war with Iraq, as well as a series of anti-American comments made in the
Canadian House of Commons. Moreover, with Iraq set to dominate the agenda
in Washington for the foreseeable future, Canada may not receive much credit
for these efforts for a time to come. Andre Belelieu.

MEXICO

Appeal process underway after Mexico’s Federal Electoral Institute (IFE)
imparts a $100 million sanction against the PRI. The Pemexgate scandal
intensified in recent weeks following a $100 million IFE-levied sanction on the
PRI for the party’s funneling of campaign funds during the 2000 presidential
election. An IFE Finance Committee has been probing the origin and
disbursement of an unreported 500 million-peso sum, which descended into the
party’s vaults during PRI presidential candidate Francisco Labastida’s campaign.
In February, the committee found that the party had violated Article 49 of the
Federal Electoral Code by receiving $50 million dollars of Pemex funds
funneled through the 90,000-member strong Oil Workers Union. On March 14,
the IFE upheld the Committee’s findings and tendered a $100 million sanction
against the party, with damages to commence immediately with the outright
suspension of the party’s public financing for the remainder of 2003, and,
beginning in January of 2004, a monthly deduction of 50% of public financing
until the $100 million mark is reached – an undertaking which could last well
into 2005. The PRI - insistent on both its innocence and on the predisposed
nature of the investigation - was quick to submit an appeal to the Federal
Electoral Tribunal (TEPJF), an appellate body beyond repeal. The Tribunal
has 6 days to rule on the case from the date it initiates its review process. (This
timeframe does not elapse upon receipt of the appeal but rather upon
commencement of the Tribunal’s consideration of the case.) Despite the lack of
a cut-off date, it is feasible that the body will rule in advance of the July mid-
term elections. Should the TEPJF uphold the sanction, it will constitute a

Americas Program • Center for Strategic and International Studies
1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

major- and a protracted - financial blow to the PRI going into the July elections.
Not only will the party have to make do with a stunted resource base in the
immediate term, but since party financing is a function of the number of votes
received in the previous federal election - and furthermore assuming the party’s
financial constraints result in underperformance at the polls in July - the
sanction could have repercussions for the PRI in the 2006 presidential elections.
Credibility is at stake here as well: if the IFE’s decision is upheld, the PRI will
once again be linked to a corruption scandal heading into a decisive election.
Sara Rioff

Standard and Poor’s maintains its rating outlook for Mexico as stable—as
opposed to positive—until key structural reforms pass through congress.
While the financial outlook is largely positive, tepid economic growth,
legislative gridlock and the lack of a consensus prompted Standard and Poor’s to
stay with its stable credit rating. Standard and Poor’s notes that Mexico must
expand its narrow tax base in order to reduce the country’s dependency on oil
revenues and increase investment to foster economic growth. With frequent
congressional opposition to President Fox’s proposals on fiscal and energy
reform, Mexico is unable to implement the structural reforms that could help
raise its productivity and enhance its competitiveness in the global market. The
upcoming congressional elections in July could lead to PAN increases in the
Chamber of Deputies, although President Fox will still have to contend with a
divided Senate.
Marisa Taylor

CENTRAL AMERICA and CARIBBEAN

The FMLN, former EL SALVADOR
leftist guerillas,
maintained the Legislative and municipal elections held in El Salvador on March 16 indicated
a desire for change by Salvadorians. The voter turnout amounted to only 40
mayorship of the percent of the registered voters, which has been interpreted as discontent with the
capital of the existing political parties. The FMLN, former leftist guerillas, maintained the
country, San mayorship of the capital of the country, San Salvador, which they have held since
1997. Furthermore, their victories in this election allowed them to maintain their
Salvador, which status as the largest single party in the government. Yet, control of the congress
they have held since remains in the hands of ARENA, the conservative Nationalist Republican Alliance
which been in power since 1989, in a coalition with other right-wing parties. The
1997. free market reforms that ARENA has implemented are controversial. Measures
such as privatization of the National Social Security Institute met strong opposition.
Large segments of the population have not seen improvements in their living
conditions due to reforms. Jana Zindell

TRINIDAD AND TOBAGProfessor George Maxwell Richards was sworn
in as the fourth president of Trinidad and Tobago on March 17, following

Americas Program • Center for Strategic and International Studies
1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

his victory in the February 14 elections by a 45-23 margin. His predecessor
Arthur N. R. Robinson had been in office for the previous 6 years. President
Richards comes to office in a tumultuous time of heightened international
conflict. As an oil-exporting country, Trinidad and Tobago’s earnings have
increased because of higher oil prices. President Richards’ honeymoon period
could serve as a time for establishing a renewed commitment to regional
integration and development throughout the Caricom community. Meaghan K.
Marshall

Last week GUATEMALA
Guatemalan
President Alfonso Former Guatemalan paramilitaries threaten to paralyze the country if
Portillo promised to governmental compensation for their civil war service remains unpaid. Last
disburse $680 to week Guatemalan President Alfonso Portillo promised to disburse $680 to each
each of the 250,000 of the 250,000 ex-paramilitaries who fought against guerilla forces in
ex-paramilitaries Guatemala’s 36-year civil war. The proposed payment plan consisted of three
who fought against installments; however, former members of the Civil Self-Defense Patrol (PAC)
guerilla forces in demand that the government compensate the veterans in a single payment before
Guatemala’s 36-year April 1. The paramilitary troops publicly threatened last Wednesday to paralyze
the country for five consecutive days should the president fail to comply with
civil war. their request. The Coalition of Mayan People’s Organizations, or Copmagua,
declared “indignation and resounding opposition” against compensation
programs for the PAC veterans. “It’s unacceptable to equate victims of human
rights violations with those who victimized them,” says Copmagua. The
organization argues that the government should offer the economic
compensation to families who bear the loss of the 200,000 dead, detained, or
missing as a result of the war, rather than to those who have repeatedly been
accused of the war’s atrocities. Portillo’s decisions regarding the allocation of
economic compensation will determine whether the government has finally
claimed responsibility for human rights violations of the civil war. The
impending remuneration would surely widen the considerable sociopolitical
schism that already exists between Mayan and Ladino populations, creating a
more volatile and conflict-ridden society. Portillo’s potential compliance could
essentially sacrifice Guatemala’s economic and cultural future for the past.
Tamra Ayers

SOUTH AMERICA

ARGENTINA

With less than a month left to go before the first round of presidential

elections, it is difficult to predict who will be inaugurated the next president of

A second round will Argentina on May 25th. If the polls are to be believed, a second round will be
be required on May required on May 18, as no candidate enjoys more than 20% support, which is short
18, as no candidate of the 45% benchmark needed to win in a first round. Given the strength of their

enjoys more than Americas Program • Center for Strategic and International Studies
N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739
20% sup1p8o0r0t,KwShtircehet, • www.csis.org
is short of the 45%

benchmark needed to

win in a first round.

political machinery and financial resources, the odds favor former president Carlos
Menem and government candidate Nestor Kirchner to come out on top on April 27.
The war in Iraq, although much talked about, should not make much of a difference
on election day, although Kirchner and others are trying to make hay of Menem's
traditionally pro-U.S. leanings. Voters will likely vote their pocketbooks and decide
on the basis of who is best capable of restoring the country back to economic
health. For its part, the government, and its presumed standard bearer Nestor
Kirchner, is making the claim that the economy is well on the road to recovery and
points to some encouraging economic data and the decision to unfreeze deposits as
evidence of this. The question that the voters will have to decide is whether this
recovery is sustainable and whether it will make a real difference in their lives.
Miguel Diaz

VENEZUELA

Capturing the headlines this month was the asylum sought by, and
conceded to, CTV leader Carlos Ortega in Costa Rica. At about the same
time, a judge struck down the warrant arrest for seven former oil executives who
had led the stoppage by Pedevesa that transpired earlier in the year. Chávez, not
to be outdone, captured some headlines himself by warning that his government
is contemplating renegotiating the country's debt (causing a sell-off of
Venezuelan paper) and lambasting the U.S. for its actions in Iraq. The vacuum
of leadership in the opposition left by the departure of Ortega and loss of
credibility of other leaders of the failed strike has triggered infighting among the
opposition ranks on who will lead the movement to oust Chávez. Some like
former presidential candidates Henrique Salas Romer, opted to sever formal ties
with the opposition umbrella group - la Coordinadora Democratica --while
others who decided to stay in the fold, are resorting to visits to the United States
and even professional political consultants to manage their campaigns to lead
the opposition. In the months ahead, this infighting is likely to keep the
opposition from waging a new campaign to unseat Chávez, leaving it up to the
international community to bear the burden of pressing the two sides to agree
on a solution to the political impasse, ideally an electoral solution. Miguel Diaz

BRAZIL

For the Lula administration, the honeymoon expired before its first hundred

days in office did. Although the economic signs have been positive, it’s been a

rocky month politically. Despite repeated efforts, neither Lula nor his chief

lieutenants have managed to close a deal by which the PMDB party would become

Despite repeated part of the government. The PMDB is a major presence in the Congress, and
efforts, neither Lula bringing it—despite its legendary maverick tendencies—into the fold would give
the government a theoretical majority in both houses. The Workers’ Party (PT) is in
nor his chief the midst of a crisis of discipline, and some extremist PTistas in Congress face
lieutenants have sanctions for intemperate statements. The Chamber President, PT moderate Joao
managed to close a Paulo Cunha, has criticized his party’s inability to push its priorities. Lula wants to
deal by which the introduce important legislation on pension and tax reform simultaneously,
PMDB party would

become part of the

government. Americas Program • Center for Strategic and International Studies

1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

Within 30 days two preferably one in each house to streamline consideration. But Joao Paulo also
judges were sticks by the position that constitutional law, regimen and tradition alike, dictate
executed and reform bills should be introduced in the Chamber. “Zero Hunger,” Lula’s flagship
social program, has been sniped at by practically everybody for its incompetent
simultaneous bureaucracy and the politically insensitive remarks of its head. The Landless
criminal attacks Movement, newly critical of “Fome Zero,” has also returned to its pre-Lula tactics
took place in Rio de of confrontation. The government is also (and probably unfairly) perceived as slow
Janeiro and Espírito to grapple with Brazil’s difficult security situation. The poster-child for the issue is
major drug trafficker Fernandinho Beira-Mar, who has bounced in recent weeks
Santo states. from Rio to Sao Paulo to Alagoas, with another move to the poor state of Piaui
likely once a prison there can be federalized and strengthened. Jose Dirceu, head of
Massad had the Civil Household, has criticized the excessive “individualism” of governors who
served at that post rejected Fernandinho’s presence and called for a greater sense of collective
responsibility. So, despite the country’s encouraging signs of economic recovery,
since 1997 and the image of Brazil’s administration is taking fire. In the weeks ahead, look for an
was recently intensified focus on the issues, a greater sense of priorities, and renewed emphasis
on discipline and a common message. William Barr
confirmed to serve
until 2007. As a result of the escalating violence across the southeast region of the country,
the past month was marked with the cruel reality of consecutive and successful
operations of the organized crime. Within 30 days two judges were executed and
simultaneous criminal attacks took place in Rio de Janeiro and Espírito Santo
states. One judge was responsible for the imprisonment of the biggest narco-
trafficker of Brazil, Luiz Fernando da Costa, known as “Fernandinho Beira-Mar”.
The second judge was responsible for the jailing of one the leaders of the organized
crime of the Espírito Santo state. Most recently, bombs have been dropped in front
of a busy hotel, a metro station, a shopping mall, and two buses were burned in the
main avenue of Rio de Janeiro. Earlier, as requested by the state governor, President
Lula controversially authorized the presence of the army in the streets of Rio de
Janeiro designed to reestablish order,. President Luiz Inácio Lula de Silva recently
declared war against the organized crime, and is reviewing his government security
plan, which initially was not one of his top priorities. Veronica R. Prado

CHILE

After immense pressure from Congress and the lack of support from
President Ricardo Lagos, Central Bank President, Carlos Massad resigned
on March 31. Massad had served at that post since 1997 and was recently
confirmed to serve until 2007. Weeks after it became known that Massad’s
former secretary, Pamela Andrada, leaked key information to the General
Manager of Inverlink, Enzo Bertinelli, political pressure grew calling for his
resignation. At first it was only the opposition parties (RN and UDI) that made
the demands; however over the last week members of the Concertación started
to make the same calls. President Lagos now has two immediate tasks: replace
Massad, a position that has to be confirmed by Congress; and more difficult
task, to convince the international community that Chile’s recent corruption

Americas Program • Center for Strategic and International Studies
1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

scandals are isolated incidents, not a pattern. Luis Pinto

On March 24, the CSIS Mercosur/South America Project hosted a Chilean
congressional delegation, featuring members of one of Chile’s main
opposition parties: Sebastián Piñera, President of Renovación Nacional (RN);
Senator Antonio Horvath (RN); Senator Nicolás Monckeberg (RN); and former
Senator Miguel Ortero (RN). The discussion centered on the U.S.-Chile FTA;
the modernization of the Chilean state; and the possible impact of the U.S.-led
war in Iraq on U.S.-Chilean relations. The panelists’ main objective was to
demonstrate their unfailing support for the U.S.-Chile FTA, despite their
differing views on the war with Iraq. Chile is the first Latin American country to
negotiate a bilateral FTA with the United States under President Bush’s fast
track authority. The U.S.-Chile FTA, coupled with the Chile-EU FTA, will afford
Chile the opportunity to gain preferential market access to two of the world’s
largest markets. Mr. Piñera illustrated three challenges that Chile will face in
implementing the FTA: (1) a changed economic structure capable of embarking
upon second-generation reforms; (2) the creation of a favorable investment
climate free from corruption and scandal; (3) the realization of constitutional
reforms. Tamra Ayers and Meaghan Marshall.

COLOMBIA

Military and Minister of Defense at odds. During a visit to Madrid last month
the minister, Marta Lucia Ramírez, announced that Spain was giving Colombia
six Mirage jet fighters. As soon as the news reached Bogotá, the Air Force Chief
of Staff let the press know he didn’t think much of the gift. The jets would, he
believed, be expensive to maintain and did not fit his service’s assigned
missions. President Alvaro Uribe entered the fray with a statement welcoming
signs Europe is finally willing to aid Colombia’s struggle against terrorism
Later he added a declaration of support for Ramírez, and the Air Force general
apologized for speaking out of turn. But by that time the press was feasting on
further stories of military dissatisfaction with the minister. Twelve years ago
Colombian presidents began appointing civilians as defense minister rather
than military officers as had been the tradition. Ramírez is the first woman and,
perhaps more significantly, the first experienced business manager to hold the
job. She is determined to take control of the burgeoning defense procurement
budget. For their part, military commanders complain about not being
consulted, even when the minister began drafting the national defense plan nine
months ago. When he took office in August, Uribe said he would pursue a
“democratic security” strategy, but, while the outline of what he meant is well
known, the plan spelling out it details remains in draft. Phillip McLean

Uribe’s momentum slows. President Uribe remains highly popular (at 60 per

cent), but his support has declined since enthusiasm for his administration peaked

President Uribe (at more than 75 per cent) just before Christmas. Colombians welcomed his early

remains highly

popular (at 60 per Americas Program • Center for Strategic and International Studies
cent), but1h8i0s0suKpSptorertet, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

has declined since

enthusiasm for his

focus on security issues and good government. Now eight months into his
administration people are chafing under higher taxes and the pension and labor
reforms he put in place. The employment picture has improved somewhat, but the
debt-burdened economy remains wobbly. Both Uribe’s popularity and the
investment climate could use a boost from a major success with the guerrillas. That
need for action, of course, is one cause of civilian-military friction. Uribe had
counted on his proposed referendum to provide him with a platform to keep his
agenda in public view, but the draft approved by congress in December remains
bottled up in the Constitutional Court and could remain there until July.
Meanwhile, the congress – friendly to Uribe but not his tool - is pushing its own
version of political reform that would do much of what the referendum was
designed to do. Phillip McLean

ECUADOR

Gutiérrez Vetoes Customs Bill. As expected, President Lucio Gutiérrez vetoed
parts of a customs bill, which he claimed was too weak to tighten controls on
rampant evasion of duties that costs Ecuador an estimated $600 million a year.
Gutiérrez’ call to eliminate the customs agency and hand over control to the
more hard-line Internal Revenue Service was ignored by the congress. The bill
to tighten control over customs is a vital part of the president’s economic
program designed to shore up Ecuador’s weak fiscal position as required by the
$200 million loan obtained from the IMF last month. The crackdown on
customs evasion is only part of Gutiérrez’ anti-corruption battle that he
promised in his election campaign. The opposition-dominated legislature could
still override the veto with 67 votes (out of 100). President Gutiérrez’
supporters control only 22 votes in the unicameral body. Lowell Fleischer

ECUADOR
U.S. Seeks Interdiction Agreement. On a visit to Ecuador to meet the
country’s new military leaders, SOUTHCOM Commander, Gen. James T. Hill,
acknowledged that Ecuador and the United States were working on a new
“interdiction agreement” that would regularize drug interdiction in Ecuador’s
territorial waters. This lead to speculation in the Ecuadorian press that U.S.
attempts to “regionalize” Plan Colombia would lead to increasingly intense
pressure on Ecuador’s border with Colombia. The leasing of the Manta base,
signed in 1999 by former President Jamil Mahuad (whom then-Colonel
Gutierrez tried to overthrow) was opposed by Ecuador’s well-organized
indigenous movement and other allies of President Gutierrez. During his visit
to the United States in February, he said he wanted Ecuador to become this
country’s “closest ally” in the war on terrorism and drug trafficking. At the
same time he continues to express his opposition to any participation by
Ecuador in the Colombian conflict. Ecuador joined Brazil, Venezuela and Peru
in refusing to brand the FARC a terrorist organization during a meeting of
Andean defense and foreign ministers in Bogotá earlier this month. Lowell
Fleischer

Americas Program • Center for Strategic and International Studies
1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

Montesinos was PERU
convicted of helping
his former mistress’ Despite the heavy strains on Peru’s judicial system, the trial of former Chief
brother get out of jail. of the National Intelligence Service, Vladimiro Montesinos, continues as the
He was sentenced to courts address the 57 charges against him, relating to bribery and
corruption. Since the start of the trial on February 18, Montesinsos has
five years to be successfully disrupted courtroom procedures by refusing to testify, claiming that
served concurrently the court was incompetent to judge him, and at another point, fainting due to his
hunger strike. On March 24, Montesinos was convicted of helping his former
in addition to a mistress’ brother get out of jail. He was sentenced to five years to be served
$143,000 fine. concurrently in addition to a $143,000 fine. Over 1,300 people are being
investigated for connections with Montesinos’ corruption network. Peru’s
judicial system will be strained under the backlog stemming from Montesinos’
case coupled with the trials granted for about 2,000 Shining Path guerrillas.
Though Peru’s judicial system is now free from the authoritarian regime of
former President Fujimori, the fragile system’s legitimacy will be tested
throughout these trials. Meaghan Marshall

Coca cultivation increased by 8 percent last year in Peru, but coca
cultivation decreased by 15 percent last year in Colombia. U.S. eradication
efforts in Colombia may be compromised by the flow of trade back to the
Apurimac River Valley in Peru. From mid to late February, coca farmers
protested President Alejandro Toledo’s administration, demanding that the
government suspend its coca leaf eradication program. In early March, Prime
Minister Luis Solari organized a High Level Commission to travel to the coca
production zones and meet with local cocalero leaders. The fragile Peruvian
government now faces high political risks from social unrest and the threat of
armed resistance to U.S. drug policy, plus the government’s attempt to maintain
friendly relations with the United States. The United States supports forced
eradication carried out by trained Peruvian police forces, but the government of
Peru favors interdiction and financial incentives instead. President Toledo must
reestablish the rule of law in the coca production zones by appeasing the
cocaleros while simultaneously striving to meet U.S. demands for decreased
coca production. Meaghan K. Marshall

Contributing Authors: Greg Anderson
Senior Associate, Canada
Dr. Sidney Weintraub
Director, Americas Program William Barr
Senior Associate, Brazil
Miguel Diaz
Director, Phillip McLean
South America Project Senior Associate, Colombia

Armand Peschard-Sverdrup Lowell Fleischer
Director, Mexico Project Senior Associate, Bolivia

Brain Latell Luis Pinto
Senior Associate Program Coordinator
Central America and Caribbean

Christopher Sands
Senior Associate, Canada

Americas Program • Center for Strategic and International Studies
1800 K Street, N.W. • Washington, D.C. 20006 • Tel: (202) 775-3150 • Fax: (202) 466-4739 • www.csis.org

Veronica Prado Intern-Scholar
Research Associate
Marisa Taylor
Viviane Vanni Intern-Scholar
Research Assistant
Jana Zindell
Sara Rioff Intern-Scholar
Research Assistant
Tamra Ayres
Megan Marshall Intern-Scholar

Hemisphere Highlights is published monthly by the Americas Program at the Center
for Strategic and International Studies (CSIS), a private, tax-exempt institution
focusing on international public policy issues. Its research is nonpartisan and
nonproprietary.

CSIS does not take specific policy positions. Accordingly, all views, positions, and
conclusions expressed in this publication should be understood to be solely those of
the authors.

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