Word: peru
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Dates: during 2000-2009
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...year ago, I was working in Peru with a nonprofit in an attempt to rein in the country’s frenzy of illegal logging. Much of the work was productive and engaging; we motored down obscure Amazonian tributaries, held press conferences with indigenous leaders, and plead for support from American diplomats-cum-drug warriors...
When I asked him why he had moved so swiftly, he had several theories. The previous year, his house in Queens, N.Y., had burned to the ground. He had escaped, blinded by smoke. Oh, yes, he had also been in a serious earthquake as a child in Peru and in several smaller ones in Los Angeles years later. He was, you could say, a disaster expert. And there's nothing like a string of bad luck to prepare you for the unthinkable...
...Peru's gambit comes at a time when talk of default is in the air. As García took office, 1,200 delegates from Latin America and the Caribbean gathered in Havana for a debt conference, and Fidel Castro urged his guests to repudiate their obligations. Bankers remain confident, however, that the Latin American countries will not default. Such a drastic strategy would cut them off from international credit, which for some is the only means of paying for vital imports like food and fuel...
García had no choice politically but to resist foreign creditors. Peru's fragile democratic government, only five years old, must contend with a rebel guerrilla insurgency as well as an economy in crisis. Inflation runs at 250%, and about two-thirds of the labor force is either unemployed or working part time. Worst of all, García alleges, wealthy Peruvians have been frantically buying U.S. dollars and putting money into bank accounts abroad. To stop this capital flight, García shut down Peru's banks after he became President. When he allowed them to reopen two days later, accounts...
Bankers are counting on García to turn Peru's financial situation around. In the meantime, the creditors will have to hope that other Latin American debtors do not demand the same easy terms...