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2001 - Alejandro Toledo

A caretaker government under Valentin Paniagua presided over new presidential and congressional elections in April 2001. There was an eight-month gap between the time when President Alberto Fujimori left Peru, under a cloud of corruption charges, and the start of the Toledo Administration.

In the presidential contest, Alejandro Toledo defeated Alan Garcia in a runoff and took office on July 28, 2001. Toledo was born in a small and remote village in the Peruvian Andes, 12,000 feet above sea level. He grew up in extreme poverty in a family of sixteen siblings. At the age of six, Toledo worked as a street shoe shiner and also sold newspapers and lottery tickets to supplement the family income. Thanks to a series of accidental opportunities, he was able to escape from extreme poverty and attend the most prestigious academic centers of the world, later becoming one of the most prominent democratic leaders of Latin America. Toledo is the first Peruvian president of indigenous descent to be democratically elected in five hundred years.

Before becoming President, Toledo worked for the World Bank and the Inter-American Development Bank in Washington, DC, and the United Nations in New York. He first appeared on the international political scene in 1996 when he formed and led a broad democratic coalition that eventually brought down in 2000 the autocratic regime of Alberto Fujimori.

When Toledo assumed the presidency 28 July 2001, he brought to office a strongly personal one-man style. Decision-making resided with him as it has during the campaign. Although he talked a good game about empowering his ministers, Toledo has not proven able to delegate authority. A solitary leader, he did not easily extend himself or his trust to others. Closest to him was his wife, Eliane Karp. Negative perceptions of her influence led the Toledo camp to lower her profile temporarily, but her influence was significant and was likely to grow.

Also affecting Toledo's personal style was his need for affirmation, domestic and international. At home, this characteristic, according to critics, brought him to the borders of a messianic complex. After the vindication of his role in returning democracy to Peru, Toledo now saw himself as single-handedly responsible for lifting Peru out of poverty or, at a minimum, out of economic recession. The test of the Toledo government on economic issues was also the test of Toledo the man - his personal success or failure bound up with that of his government.

The positive side of Toledo's individualism was his tenacity and his determination to succeed. He was proud of being a fighter, demonstrated in his two-year struggle to get to the presidential palace. He came to the job, however, with no experience as an elected official or in management. This shortcoming made the decision-making process in Toledo's government appear dysfunctional.

With only rudimentary campaign financing rules, there was little information about possible financial backers and their interests. With the exception of the one million dollars George Soros' Open Society provided for the july 2000 anti-Fujimori protests (Cuatro Suyos), only media businessman Baruch Ivcher had been identified as a contributor. There are rumors that another, somewhat unsavory businessman, Leon Rupp, had been a major backer. Raul Diez Canseco, the first VP from an old, wealthy Lima family, also helped to bankroll Toledo's campaign.

Dr. Alejandro Toledo was democratically elected President of Peru in 2001. During his five-year term, the central aim of Toledoís presidency was the fight against poverty through investment in healthcare and education. As a result of sustained economic growth and deliberate social policies directed to the poorest of the poor, extreme poverty was reduced by 25 percent in five years, and employment rose at an average rate of 6 percent from 2004-2006. From 2001-2006, the Peruvian economy grew at an average rate of 6 percent, making it one of the fastest growing economies in Latin America.

The independence of the judiciary received a strong boost under the Paniagua government and it seemed likely to remain on the same track under Toledo. Nevertheless, although judicial independence has been largely restored to the status quo ante Fujimori, the Peruvian judicial system remained in dire need of radical reform and modernization. The military, discredited for its corrupt links to former intelligence advisor Vladimiro Montesinos, faced an unsympathetic master in Toledo. He put the armed forces on notice about pursuing corruption and abuses, favored military budget cuts and pressed for greater civilian control.

The Toledo government consolidated Peru's return to democracy, a process that had begun under President Paniagua. Despite being a frequent target of political and media criticism, Toledo maintained strong commitments to freedom of the press. The government undertook initiatives to implement the recommendations of the Truth and Reconciliation Commission (TRC), which had studied the circumstances surrounding the human rights abuses and violations committed between 1980 and 2000. Prosecutors brought criminal charges against former president Fujimori for corruption and human rights violations.

Under President Toledo, Peru negotiated a trade promotion agreement (the PTPA) with the U.S. Toledo also unveiled plans to construct a road connecting Brazil and Peru's isolated interior to the Pacific coast. Toledo's economic management--a continuation of Fujimoriís--led to an impressive economic boom in Peru. Poverty reduction was uneven, however. Although poverty in some areas decreased to 15.8% during the Toledo administration, nationally it only decreased by 9.8% and nearly half (44.5%) of Peruvians were still living below the poverty line. In 2005 the government implemented "Juntos," a program to double the income of people living in extreme poverty (17.4% that year).

The Alejandro Toledo government, after posting successful macroeconomic numbers (growth above 4% of GDP per year, inflation below 4%, poverty reduced from 55 to 44.5%, and absolute poverty reduced from 24.4 to 16.1%) found that the public reward was an approval rating below 15% for most of its tenure in office. The stellar macroeconomic numbers masked a remarkably unequal distribution of the gains from growth. Lima and the main cities along the coast reaped the gains from growth, but Peruís interior remained neglected.

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Page last modified: 09-03-2016 19:44:10 ZULU