| Alejandro Toledo | |
|---|---|
| 92nd President of Peru | |
| In office July 28, 2001 – July 28, 2006 |
|
| Vice President | Raúl Diez Canseco David Waisman |
| Preceded by | Valentín Paniagua |
| Succeeded by | Alan Garcia |
| Personal details | |
| Born | March 28, 1945 Cabana, Peru |
| Nationality | Peruvian |
| Political party | Perú Posible |
| Spouse(s) | Eliane Karp |
| Alma mater | University of San Francisco Stanford University Harvard University |
| Profession | Economist |
| Religion | Roman Catholicism |
Alejandro Celestino Toledo Manrique (born 28 March 1946) is a politician who was President of Peru, from 2001 to 2006. He was elected in April 2001, defeating former President Alan García. Toledo came to international prominence after leading the opposition against President Alberto Fujimori, who held the presidency from 1990 to 2000.
Born into a family of indigenous campesinos (peasants) of Quechua heritage and living in extreme poverty, he was one of sixteen brothers and sisters.[1] He was born in the village of Ferrer, Bolognesi, but registered in the nearby town of Cabana, Pallasca Province, Ancash Department. He grew up in Chimbote, a city on Peru's northern coast, where from the age of six, he worked shining shoes and selling newspapers and lottery tickets.[2]
After a childhood filled with multiple jobs and living in impovershed conditions, Toledo eventually found employment as a news correspondent for La Prensa in Chimbote, where he interviewed several high-ranking politicians. At age 20, with guidance from members of the Peace Corps, Toledo enrolled at the University of San Francisco on a one-year scholarship. He completed his BA program in economics and business administration at USF by obtaining a partial soccer scholarship and working part time pumping gas.[3] He later attended Stanford University, earning a master's in Economics and Economics of Human Resources, he then earned his PhD in Economics of Human Resources in 1993 at the Stanford University School of Education.[4]
From 1981 to 1983, Toledo directed the Institute for Economic and Labor Studies in Lima, under the Ministry of Labor and Social Development. During the same period, he also served as Chairman of the Economic Advisory Committee to the President of the Central Reserve Bank and the Labor Minister.
Throughout his academic and governmental career, Toledo worked as a consultant for various international organizations, including the United Nations, the World Bank, the Inter-American Development Bank, the International Labour Organization (ILO), and the Organisation for Economic Co-operation and Development (OECD). He led the 1989 UNDP/ILO mission for the evaluation of: “Impact of Macroeconomic Policies on Growth, Employment and Salaries,” in six Central American countries.[5]
Toledo has also been a regular professor at ESAN, one of Peru's leading Business Schools, serving as its director from 1986 to 1991. From 1991 to 1994, he was an affiliated researcher in the field of international development at the Harvard Institute for International Development. He has also been a guest professor at the University of Waseda in Tokyo and at the Japan Foundation.[6]
Toledo entered politics as an independent candidate for the presidency (gaining 3% of the electorate) in the 1995 election in which Alberto Fujimori was ultimately re-elected. Nevertheless, the party he founded in 1994, Perú Posible, gained popularity and influence over the next few years. Toledo declared his intent to run again in the 2000 election and despite a constitutional controversy about his eligibility to serve a third term, Fujimori also announced his candidacy.
Despite being a relatively low-profile politician, Toledo suddenly found himself the leader of the opposition to Fujimori's presidency. Toledo promised to uphold and strengthen the market program in place, while also mitigating inequality issues attributed to it. He promised to work for various democratic reforms and reinvigorate Peru's social infrastructure. During the campaign, he promised to raise the wages of civil servants, which were stagnant under Fujimori, and to create 400,000 jobs a year through programs designed to encourage agriculture, tourism, and small business.[7] Toledo repeatedly advocated for expansion of government corruption investigations, including those regarding allegations that the Fujimori administration had stolen billions from government coffers.
Racial-ethnic themes also echoed throughout the campaign. Toledo was running to become Peru's first indigenous president. Referring to himself as the cholo throughout his campaign, many indigenous Peruvians hoped that he would be an advocate for indigenous issues in office. Toledo's background, engaging manner, and informal attitude made him an attractive candidate to both indigenous and non-indigenous Peruvians.[8]
Just minutes after the polls closed at 4:00 PM on April 9, 2000, major news networks rushed to announce that Toledo had garnered more votes than Fujimori. These announcements were based on projections from Peru's top polling firms, who base their numbers on exit polls. The prominent pollsters quickly modified projections based on samples of actual vote counts from selected polling places, better known as the "quick count". Shortly after news of Toledo's round one success, supporters gathered in the streets around Toledo's hotel room. An enthusiastic Alejandro Toledo walked out onto the balcony of his room wearing a red headband, reminiscent of ancient Inca warriors. He optimistically speculated that a first round victory might be within his grasp but still urged his supporters to wait for the results of the quick count. The second wave of quick count results reversed earlier projections, projecting a round one Fujimori plurality and possible majority. Fujimori had a projected 48.73% to 41.03% lead later that evening. Fujimori was closing in on the 50% mark which would give him the round one victory, no runoff necessary.
Allegations of fraud were not far-fetched. On the day preceding the election, Tranparencia, the national election observation organization, reported that it had received information concerning a web site with capabilities to hack into the ONPE (Oficina National de Procesos Electorales) computer system. Eduardo Stein also claimed that ONPE had made no provisions for OAS technicians to monitor the vote count system in real time. Toledo claimed that a fraud had been perpetrated, other opposition candidates agreed and joined protests led by Toledo.[9] "...even the U.S. State Department, which had supported Fujimori's neo-liberal economic policies, described the 2000 elections as 'invalid'."[10] Since no candidate had received a majority of vote, a runoff was required, but Toledo refused to participate in a second round against Fujimori. He unsuccessfully petitioned to have the election annulled, and lobbied international organizations and foreign government to refuse recognition of Fujimori's government.[11]
On July 28, 2000, Peruvian Independence Day, Fujimori assumed the presidency for a third term. Toledo led a group of protesters towards Congress. It was a massive, peaceful demonstration, but violence broke out and a powerful explosion led to the death of six people.[12] It was later discovered by the Peruvian Judiciary that the explosion had been planned and carried out by the National Intelligence Service run by Vladimiro Montesinos, who was already indicted on corruption and bribery charges. Montesinos had fled to Venezuela, where he hid for several months before being captured and brought back to Peru. The charges against Montesinos ranged from bribery to drug trafficking to arranging death squads.[13] But it was the release of the "Vladi-videos" which prompted retreat by Fujimori. The first of these incriminating videos featured Montesinos bribing a Congressman with US$15,000 to switch to Fujimori's camp.[14]
In November 2000, amid growing allegations of fraud and corruption within his administration, Fujimori agreed to have new elections held in 2001, in which he would no longer be a candidate. While attending the APEC forum in Brunei, Fujimori's party lost control of the Congress. Fujimori then flew to Japan, where he submitted his resignation and claimed Japanese citizenship.[15]
After the fall of Fujimori, the newly elected president of the Peruvian Congress, Valentín Paniagua, became interim president and oversaw the already planned new elections on May 29, 2001. Toledo won after a close run-off election against former President Alan García of the APRA party, with 52.23% of the vote, to Garcia’s 47.77%, becoming the first South American President of indigenous descent to be democratically elected in five hundred years.[16]
During his campaign, Toledo promised Peruvians higher wages, a fight against poverty, anti-corruption measures, higher pensions, more employment, military reform, development of tourism, and industrialization. As Pedro Pablo Kuczynski noted “Toledo comes after almost 30 years of either dictatorships or governments that weren't so democratic. People expect Toledo to solve all the problems of the last 30 years, which included an enormous increase in relative poverty."[17] Toledo's inability to fulfill many of these promises created widespread dissatisfaction. His approval ratings were consistently low throughout his presidency, sometimes sinking into single digits.
Toledo also promised open market free trade reforms, which reflected Peru's business interests while also promising to review Fujimori's privatization programs. Specifically, Toledo promised not to privatize any of Peru's public utilities. This promise, combined with lofty promises of reduced unemployment and poverty, caused Peru's rank and file to set the bar very high for his administration. Shortly after coming to office Toledo met with IMF officials and promised that he would raise $700 million in 2002, and almost one billion dollars in 2003, by selling state assets.[18]
To compound his problems, President Toledo faced a devastating earthquake in his first year in office. This natural disaster left much of Peru devastated morally and fiscally. With many homes and businesses destroyed, economic ills were exacerbated.[14]
In November 2001, Toledo opened talks which concluded in the National Accord of July 22, 2002. It was a framework agreed upon by seven political parties and seven social organizations of Peru, it was designed to guide policy for the next twenty years. The accord established twenty four policy goals under the four objectives of democracy and the rule of law, equity and social justice, economic competitiveness, and an institutional framework of efficiency, transparency, and decentralization. Initially, the accord opened up dialogue in Peru’s political arena, but within a year, the public believed that it was not as effective as had been hoped.[19]
Touting his heritage throughout his campaign, Toledo continued the efforts begun by Paniagua, who had brought together experts and indigenous leaders to discuss the needs of indigenous people throughout the country. Toledo’s inauguration ceremony on Machu Picchu was attended by all the presidents of the neighboring Andean states who joined him in signing the “Declaration of Machu Picchu,” promising to protect indigenous rights.[20]
Maria Elena García calls the years of Toledo’s presidency; a transition rife with new opportunities for indigenous people, noting the “reframed state-indigenous interactions” and “increase in NGO projects and social movements” and “proliferation of indigenous organizations.”[20] Toledo created and first lady Eliane Karp headed a new agency for indigenous and afro-Peruvian affairs, CONOPA (Commission for Amazonian, Andean, and Afro-Peruvian Peoples). The agency was meant to establish a development agenda for indigenous communities, provide representation of indigenous interests within the government, and lead the way for multi-cultural constitutional reforms. Some critics viewed these actions as a state co-optation of indigenous identity, mockingly dubbing the agency the “Karp Comission.”[21] However, Oxfam's Martin Scurrah points out the agency's good work, noting that in addition to promoting a chapter on indigenous rights in the new constitution, Eliane Karp has "intervened on numerous occasions in support of or in defense of indigenous initiatives."[20]
As President, Toledo made it a priority to try to recover ancient Incan artifacts from Yale University's Peabody Museum of Natural History, some art historians claimed that such artifacts found at Machu Picchu could help the Peruvian people gain knowledge of their ancestry.
He also brought serious attention to bilingual education in indigenous schools, creating a new and well-staffed division within the Ministry of Education devoted to the issue. This effort gives advocates greater autonomy and opportunity to influence policy and work towards institutionalizing bilingual education.[22]
Toledo's efforts at decentralization sought to give more influence to indigenous groups in affecting policy on a regional level. The first regional and local elections, held in November 2002 required that the list of candidates in regions with an indigenous presence must comprise 15% indigenous representatives. However, decentralization has been viewed critically by some, who claim that in dividing up regions, administrators at times ignored cultural and historical factors defining different areas.[23]
Some of Toledo's efforts at jump-starting the economy through investment have also received criticism by advocates of indigenous rights, including his support of the Camisea natural gas project and other projects exploring or developing natural resources. These critics claim that companies buy land at unreasonable prices, force indigenous people off of land that is historically theirs, and exploit natural resources in ways that are harmful to communities and the environment. As one of the largest producers of gold, silver, and zinc in Latin America, some point to the priority the government gives mining industries over those like fishing and agriculture which indigenous peoples are more familiar with. They note that mining companies may bring new jobs to rural areas, but not jobs for which natives are well qualified.[23]
Despite unprecedented, strong, and consistent economic growth under his leadership, Toledo dealt with much labor unrest during his presidency as workers demanded higher wages and the fulfillment of campaign promises. The crisis underlined a basic flaw in Peru's economy as noted in The Economist "some 70% of output falls within the grey or "informal" economy, and thus escapes tax. Tax-collections, at below 12.1% of GDP, are stagnant, with most coming from a handful of large, formal companies. Evasion is widespread, particularly among better-paid independent professionals." Tax collections by Toledo's government could simply not cover the wages promised to civil servants.[24]
In addition to insufficient revenues and inability to pay civil servants Peru saw its cost of living increase dramatically in the early years of Toledo's administration. These hardships, combined with increasing unemployment and stagnant wages led the general public to doubt that Toledo was living up to lofty campaign promises. By 2003, Toledo's approval rating had fallen bellow 10%, the lowest of any South American president of the time.[25]
Despite periods of unpopularity and unrest, Toledo did implement some of his plans for investment in social infrastructure and institutions. The amount of paved roads increased by 20% during his presidency, medical attention to the poor doubled in rural areas, and public sector salaries increased, including an increase of 87% for schoolteachers and over 100,000 new homes were built for poor Peruvians.[26]
By 2004, Peru had a far-reaching social safety net that included food programs serving 35 percent of the population, and work programs offering temporary employment to unskilled workers. The Cooperative Fund for Social Development funded projects like constructing and referbishing schools, health clinics, rural roads, water and sanitation systems, and electric grids. Through enacting poverty alleviation strategies, Toledo placed food and infrastructure programs under the Ministry for Women and Social Development and urged decentralized implementation by municipalities. Social safety net spending in Peru remained well below the Latin American average under Toledo and covered a larger percentage of the population, which resulted in widespread coverage, but not enough to pull many people out of poverty.[19]
Toledo inherited an education system rife with decades of problems in quality, completion, resources, and eqalityty between genders, classes, and races. Toledo first launched Project Huascaran, which enabled primary and secondary school classrooms usage of a nationwide network of computer-based, internet-connected learning systems. During his campaign, Toledo had promised to double teachers’ salaries, but ran into problems when the teachers unions successfully opposed an initiative to tie salary increases to improved skills and performance standards. In 2002, Toledo declared an emergency in education, stating four objectives to respond to it:
Throughout his administration, enrollment rates in primary and secondary education remained high and private school enrollment increased, but overall literacy and test scores improved only slightly. In an interview on his last day in office, Toledo expressed frustration that his administration had not done more to improve education.[19]
During his first year in office, Toledo replaced previous health insurance programs aimed at the poor with a more comprehensive free insurance program, Seguro Integral de Salud (SIS). The program aimed to provide Peruvians without health insurance with improved access to heath care. By the end of his term, SIS covered more than 11 million Peruvians living in the outskirts of cities or in rural areas, however, about a third of the country remained without health coverage.[19]
The immense popularity of the program has locked it into the political scene. President García expanded the program and it has been praised by neoliberal reformers for extending coverage of indigenous people and women. They also note that it has closed some gender stratification in healthcare provisions, since Peruvian women’s healthcare costs are much higher than men’s due to higher rates of illness and reproductive issues. The legislature continues to build upon SIS, using it as a legal basis for what many hope will someday be universal healthcare coverage for all Peruvians.[27]
Toledo also attempted to improve access to healthcare in the most remote places. His Juntos program gave a monthly benefit to poor families in exchange for getting vaccinations, screenings, attending school, and obtaining birth registration documents. The Toledo administration also provided financial incentives to young doctors willing to spend the first few years of their practice in remote areas.[19]
Peru faced a major housing deficit in 2001, with the majority of its urban population living in slums. Toledo’s administration sought to improve access to affordable housing through subsidies, loans, down payments, land titling, and encouraging financial institutions to reach further down-market. Most of these efforts were grouped under the Fondo Mivivienda program started in 1999.[19]
Under Toledo's predecessor, Fujimori, governing authority in Peru was condensed and centralized. A Fujimori-dominated congress passed a new constitution in 1993 which consolidated the bicameral legislature into a unicameral legislature with a single national district. Under Fujimori local governments retained minimal legal authority including fees for utilities, basic civil registries, and management of public spaces and markets.
Decentralization was among Toledo’s most successful institutional reforms. In addition to announcing regional elections upon inauguration, he charged a Decentralization and Regionalization Commission with developing proposals. In 2002, a constitutional amendment was approved establishing three levels of government: local, regional, and national. Over the next few years, the congress gradually passed on resources and responsibilities to the regional and municipal governments including food programs, social development projects, and health and education programs.[19] Upon assuming the presidency, Toledo announced his intent to further decentralize. His government established a set of legal norms for the reinstallation of regions and the restoration of the sina qua non factor for other forms of regional autonomy.[28] He divided the single district up, called for regional elections, and eliminated the centralist Ministry of the Presidency begun under Fujimori.[28] However, when Peru Possible's rival political party APRA made large gains in regional elections, the Toledo administration halted their decentralization program by withholding power in the areas of revenue and expenditure. This left many regionally elected governors confused as to what their authority encompassed. Without strong fiscal plans to support his new policy of centralization, Toledo had to continue decentralizing authority and recognizing more regions. Toledo continued to assert control of regional governments by way of funding.[28]
Toledo’s plan for decentralization enjoyed widespread popular support. Most opposition and difficulty in implementing proposals came from politicians and bureaucratic agencies accustomed to their centralized form of government.[19]
The Truth and Reconciliation Commission, which had been implemented by interim president Paniagua, was tasked with examining large scale acts of violence and atrocities committed within Peru between the years of 1980-2000, to assess responsibility and pave the way for reparations. The Commission's final report to President Toledo was issued in 2003, and concluded that approximately 69,000 people had been killed by the Shinning Path and other extremist groups, the bulk of victims being innocent peasants.[29] It was estimated that 54% of these victims were killed by the extremist guerrilla group Shining Path, 30% by the Peruvian Military and police forces, and the rest were killed by rural or peasant self-defense militias.[30] These investigations were financed by a portion of the US$360 million discovered in foreign accounts which had been stolen by Fujimori officials.[14] Toledo wasted no time in pursuing suspected terrorists, arresting 199 of them in 2002 alone.[31]
In late 2001, the Directorate against Terrorism reported that the Shining Path, a terrorist movement which has been active since the eighties, was organizing along new front and infiltrating protests, blocking highways, and organizing student marches. The government reacted by reestablishing five counterinsurgency bases, which soon assisted in destroying six Shining Path camps. But terrorist activity continued and in 2003, Toledo declared the first of several states of emergency due to terrorist threat.
Toledo walked a thin line in responding to both U.S. pressure to severely limit coca-production and protests by coca farmers against eradication in poor, rural areas, where the majority of the population is involved in coca production. The presumed link between the Shining Path and narcotics trafficking was unclear, because the coca farmers gave most of their crops to drug traffickers who then paid the Shining Path to operate within certain regions.
Recognizing drug trade as a threat to regional security, Toledo sought to create a common Andean approach to the drug war. He saw that revenue from drug trafficking funded terrorist activities, but also that U.S. insistence on eradication of coca crops failed to address the problem. Alternative crop programs were also being resisted by coca farmers who depended on the trade for their livelihood. At a meeting of the 19-member Rio group in May 2003, Toledo proposed developing a joint strategy to deal with drug trafficking, but pressure from Washington, which preferred bilateral efforts, helped kill the notion.[19]
The Toledo administration was unusually active in foreign policy. It’s major goals were promotion of democracy outside Peru, addressing the struggle against poverty, promotion of economic development in the borderlands, and regional reduction in arms spending, strengthening relations with Asia-Pacific countries, and integration with the Andean Community of Nations.[19] Peru also became an associate member of MERCOSUR, a free trade zone would be established gradually between Peru and MERCOSUR countries, more infrastructure would be built to help MERCOSUR members trade amongst each other and increase international exports, signing nations would cooperate with scientific advancements toward energy efficiency, and signing members would commit to future agreements that would increase cross border investment by taking measures to avoid double taxation.[32]
The Toledo administration held free trade agreement talks with Singapore, concluded one with Thailand where an air transport agreement was also reached, and signed an extradition treaty with South Korea. Foreign Minister García-Sayan visited China and discussed support for multilateralism and strengthening the UN. In 2004, China declared Peru an official tourist destination and in 2005, the countries concluded several trade agreements.[19]
Toledo attended Evo Morales’ inauguration in 2006, indicating a willingness to work with his administration, but Morales joined his mentor, Chavez, in repeatedly making offensive comments about Toledo and his government, especially after the successful conclusion of the Peru’s free trade agreement with the U.S., souring official relations with Colombia.[19]
Peru’s relations with Brazil under Toledo were part of an effort to reorient Peru from the Andean Community, toward the more economically active Brazil and MERCOSUR. In August 2003, Toledo met with President Lula. They committed to increased political and economic cooperation under the Initiative for Integration of Regional Infrastructure in South America which invests in large-scale, debt-heavy projects, aimed at developing 10 economic axes or hubs throughout South America. Construction projects, including roads, were also part of the bilateral talks. President Lula also agreed to allow Peru access to two surveillance systems which Brazil developed in the Amazon Basin to target legal and illegal activity.[19]
Concern for security and trafficking led the Toledo administration to reinforce its border with Colombia and ensure improved police coordination as its top priorities. In 2003, With increased private and UN investment in the area, the two countries agreed to an integrated frontier zone which treats air travel between border cities as domestic and simplifies customs and tariff procedures.[19]
Most of the Toledo administration dealings with Chile involved concern over Chilean procurement of arms. Despite his repeated call for regional arms reductions, Chile continued purchasing arms, including 10 F-16 fighters from the U.S. and one hundred Leopard 2 tanks from Germany.[19]
While Peru and Ecuador had been at peace for years, President Toledo worked to solidify that peace and produce something of it. In a 2001 visit to Ecuador, Toledo expressed support for the Brasília Accords, agreed to demilitarization of the two countries’ border, advocated reduced military spending, and agreed to more energy, transportation, and police cooperation. Toledo joined Ecuador President Noboa at the International Advisory Committee of the Binational Development Plan where they called for greater investment in their region, with Toledo putting forth a detailed program for international assistance. From there, economic activity in the region improved as demining of the border continued, construction projects were completed, and military forces reduced. By 2006, investment in the area had reached $1.2 billion.[19]
Relations with Venezuela deteriorated during the latter half of the Toledo presidency due to opposing philosophies and policies of Presidents Toledo and Chavez. The issues contributing to this contentious atmosphere included Venezuelan shielding of Vladimiro Montesinos,[33] Peruvian support for democratic process in Venezuela, and Venezuelan interference in politics in Peru. (157) This included Chavez’s official endorsement, and unofficial financial backing of leftist candidate Ollanta Humala in Peru’s 2006 presidential race, which was soon seconded by President Morales.[19]
President Toledo worked hard throughout his presidency on what became a very productive relationship with the U.S., and what Toledo described as a personal friendship with President Bush. He received lavish praise from the American president for his economic and domestic security policies. During a visit to Peru, Bush announced the establishment of an Andean Center of Excellence for Teacher Training, with a base in Peru, and a fellowship program to give Andean professionals access to education in information technology. In June 2002, the U.S. agreed to let Peru exchange $14 million of its debt for a promise to invest $12 million in conservation projects. In September, Toledo secured a $300 million commitment from Bush to fund alternative-crop development in coca-producing areas. In 2003, the Peace Corps returned to Peru. Peru opposed U.S. efforts most visibly in the War in Iraq, refusing to support the invention in any kind of international arena.[19]
The United States – Peru Trade Promotion Agreement (Spanish: Tratado de Libre Comercio Perú – Estados Unidos) is a bilateral free trade agreement, whose objectives are eliminating obstacles to trade, consolidating access to goods and services and fostering private investment in and between the United States and Peru. Besides commercial issues, it incorporates economic, institutional, intellectual property, labor and environmental policies, among others. The agreement was signed on April 12, 2006; ratified by the Peruvian Congress on June 28, 2006; by the U.S. House of Representatives on November 2, 2007 and by the U.S. Senate on December 4, 2007. The Agreement was implemented on February 1, 2009.[34]
Peru's interest in the agreement are to:
Iincrease workers' income
The United States looks to the agreement to:
The U.S.-Peru agreement has faced criticism. In Peru, the treaty was championed by Toledo, and supported to different extents by former President Alan García and candidates Lourdes Flores and Valentín Paniagua. Current President Ollanta Humala has been its most vocal critic. Humala's Union for Peru won 45 of 120 seats in Congress in 2006, the largest share by a single party, prompting debate on ratification of the agreement before the new legislature was sworn in. Some Congressmen-elect interrupted the debate after forcibly entering Congress in an attempt to stop the agreement ratification.[36]
One controversial element of the agreement relates to land resources. Laura Carlsen, of the Center for International Policy, and contributor to Foreign Policy in Focus notes that "Indigenous organizations warn that this ruling effectively opens up 45 million hectares to foreign investment and timber, oil, and mining exploitation." [37]
However, most criticism of the agreement has focused on the potential impacts on Peru's agricultural sector. By planting similar crops to those subsidised by the U.S., Peru faced a competitive disadvantage in producing agricultural products because poor farming families with inadequate tools, technology and techniques may not be able to produce crops at low enough prices to export. In response to these concerns, Peruvian lawmakers created a Compensation Fund which directed $34 million per year to cotton, maize/corn, and wheat producers for a five-year period to help adjust to the new competitive pressures.[38]
Toledo’s economic policies can be described as neoliberal or strongly pro free-trade. He inherited a national economy which in the previous decade had experienced widely varying and unstable GDP growth and shrinkage as well as fiscal deficits frequently over 2% of GDP. Inflation had not dropped below 23% until 1995 and was still feared by many. In response, Toledo developed policies which focused on fighting poverty, generating employment, decentralization, and modernization of the state.[39]
Among Toledo’s plans to generate revenue and makeover the economy were plans to privatize national industries. The first major plas was the $167 million sale of two state-owned electric companies. However, protests in the city of Arequipa turned violent as Peruvians reacted to the prospect of layoffs and higher priced power and also recalled that billions of dollars from privatization under the Fujimori administration had filled the president’s personal accounts. Toledo decided not to realize the sale of electric companies, but promised to continue privatization efforts, which were a key provision of a deal struck with the International Monetary Fund. Toledo had promised to bring in US$700 million through privatization in 2001 and US$1 billion in 2002.[40] Despite failure to meet these goals, the IMF approved a $154 million disbursement to Peru in December 2002 and allowed the country to raise the fiscal deficit target in its agreement.[41]
Although Toledo originally promised tax cuts, violent protests by civil servants prompted the increase in social sector spending that Toledo had promised, which necessitated tax increases. To tackle tax reform in June 2003, he brought in Peru’s first female prime minister, Beatriz Merino who quickly submitted proposals to the congress. Among the suggestions were cutting pay for higher-paid public-sector officials, including a 30% trim for Toledo himself, a 5% across the board cut for all agencies and ministries, tax increases on beer, cigarettes and fuel, and an extension of the 18% sales and value-added tax extended to, among other things, long-distance bus journeys and live entertainment.[42] The final package also included the elimination of tax breaks, introduction of a minimum corporate tax, closing tax loopholes for the rich, and strengthening of local government real estate tax regimes.[41]
During Toledo's five years as president, Peru's economy experienced 47 consecutive months of growth and grew at an average rate of 6% per year while inflation averaged 1.5% and the deficit sank as low as .2% of GDP. Between 2004 and 2006, employment grew at an average rate of 6%,[4] the percentage of people living in poverty fell, and food consumption by the poorest segments of the population rose dramatically.[26] Much of this growth has been credited to the free trade agreements signed with the United States, China, Thailand, Chile, Mexico, and Singapore.[43][44]
In an attempt to increase remittances from Peruvians abroad, the Ministry of Foreign Affairs under Toledo sought to strengthen the link between Peruvian migrants and their homeland through the creation of advisory councils. The issue is especially important for a country which saw massive emigration of professionals under Fujimori and which still has 10% of its population living abroad. The councils were also part of an effort by the first Minister of Foreign Affairs, García Sayan, to professionalize foreign service.[45]
After his presidency, Toledo left Peru and went to the United States where he was a Distinguished Scholar in Residence at the Center for Advanced Study in the Behavioral Sciences at Stanford University, during the 2006-2008 academic years.[46] Toledo was named a Distinguished Visiting Fellow at the Hoover Institution at Stanford University from 2006 to 2009, and then in 2007-2008 he was a Payne Distinguished Visiting Lecturer at Stanford University's Freeman Spogli Institute for International Studies and a CDDRL (Center on Democracy, Development and the Rule of Law) Visiting Scholar.[46] While at Stanford, Toledo founded and continues to serve as the President of the Global Center for Development and Democracy, based in Latin America, the United States, and the European Union and studies the interrelationship between poverty, inequality, and the future of democratic governance.[6]
In 2007, following the closing of media outlet RCTV in Venezuela, Toledo published an op-ed in the New York Times condemning the actions of President Hugo Chavez’s government as a violation of free speech. Toledo called for action by the Organization of American States to intervene, citing its commitment to protecting the development of democratic institutions, including the press. He also called for "continent-wide solidarity" as repression of free speech is felt beyond the country of origin. He warned that allowing Venezuela to silence its press without repercussion would encourage similar repression in the rest of Latin America, because "[w]hen one voice is silenced, we all become mute. When one thought it eliminated, we all lose some awareness. And when a space for the expression of ideas becomes closed, we all become trapped in the dungeons of dictatorship."[47]
In 2009, Toledo joined the Brookings Institution as a nonresident senior fellow. His works on the Latin America Initiative, a joint effort of the Global Economy and Development and Foreign Policy programs at Brookings. The initiative focuses on the most critical economic, political and social issues facing the region. Research activities focused on a wide range of topics; including the challenges that a changing world economy poses for Latin America, the impact of organized crime on democratic institutions and economic prosperity, trade and investment policies, strategies to tackle poverty and inequality, combating climate change, and Cuba's political transition.[48]
Toledo is also a member of the United Nations Steering Committee on the Human Development Report for Latin America, a member of the Club of Madrid, and a member of the International Board of Governors of the Peres Center for Peace in Israel.[6]
In 2010, Toledo joined the Spanish Prime Minister, Nobel Peace Prize Laureate David Trimble, Italian philosopher Marcello Pera, former United States Ambassador to the United Nations John Bolton, British historian Andrew Roberts, and others in forming the Friends of Israel Initiative. The project’s aim is to counter efforts to delegitimize the State of Israel and its right to live in peace within safe and defensible borders. It specifically encompasses a non-Jewish population concerned for continued acceptance of Israel as part of the western world and as a full-fledged democracy with the right to defend itself.[49]
In a 2011 article, titled "How not to have a Palestinian State," Toledo and his co-writers argued that Obama's advocation of a return to talks based on the pre-1967 lines is a "clumsily concealed delegitimization device,"[50] as Palestine does not meet the internal and external requirements to become a state. The only way forward, as they see it, is a bilateral agreement between the Palestinians and the Israelis, as opposed to unilateral action by the UN General Assembly, where both parties agree to recognize each other as a legitimate state.[50]
In December 2010, Toledo announced his candidacy to the 2011 presidential election. Telling the Peruvian Times that "Garcia (the incumbent) is governing for the rich and not the poor", he continued his scathing criticism, "When I left the government in 2006, with 1 sol (approximately $0.34) you could buy 10 breads. Now, with 1 sol you buy five… President Alan García (must) realize that Peru is much greater, much deeper, more generous and more warlike than the rich friends that surround him.”[51]
The general election, which took place on April 10, 2011 gave 15.62% of the vote to Toledo, who finished behind Ollanta Humala with 31.75%, Keiko Fujimori with 23.5%, and Pedro Pablo Kuczynski with 18.52%, and ahead of Luis Castaneda with 9.84%.[52] The run off featured Keiko Fujimori, daughter of the former authoritarian president, Alberto Fujimori. Peruvian election law requires a run-off round if the initial election does not give a majority of the vote to one candidate. After the initial round, the conservative congresswoman received the support of candidate and former president Alan García and Toledo supported leftist former army officer, Ollanta Humala, calling him the lesser of two evils.[53][54]
However, Toledo’s support came with conditions and he threatened to mobilize protests if Humala’s presidency does not live up to Toledo’s standards in terms of protecting democratic institutions, human rights, and stimulating the economy.[54] Just before the election, an email was released revealing that the socialist president of Venezuela, Hugo Chavez, had supported Humala's 2006 campaign financially. The story also brought scrutiny on Humala's wife, Nadine Heredia, who was well-paid for consulting work at a pro-Chavez newspaper.[55]
The final results of the election showed that Humala had clenched 51.6% of the vote to Fujimori's 48.4%.[56] The day after the final vote, the Peruvian stock market plunged over concern for the state of Peru's neo-liberal economic policies.
Drawing on close relations with Evo Morales, President-elect Humala visited Bolivia shortly after the election and suggested the possibility of reunification of the two countries, a proposal which Toledo explicitly rejected, warning that he will not “allow Peru to become another Venezuela or Nicaragua.”[57]
Amidst worries that Humala's election was a shift too far to the left, Peru Posible, under the leadership of Toledo, announced the month after the election that it would not accept ministerial positions within the administration and would limit its support of Humala's government to backing in some issues in the Congress.[58][59]
From the start of Toledo’s presidency, the press took an aggressive stance, scrutinizing the personal and public lives of Toledo and his advisors. Many news outlets were determined to expose corruption in a way they could not under the Fujimori administration. Others wished to prove their independence from the government, which had controlled the press under Fujimori. Ironically, it was Toledo's commitment to maintaining a free press that allowed these attacks to occur.[19]
Charges of corruption, nepotism, and graft aimed at Toledo, his family, members of his administration and fellow PP members plagued his presidency. In the form of headlines, these stories led to many resignations and were the most significant contributing factors to Toledo's low approval ratings. Those ratings bottomed out in 2004, following the resignation of his Minister of Agriculture.[19]
In 2006, UCSD's Institute of the Americas honored President Toledo with its Award for Democracy and Peace for his efforts in promoting economic growth and strengthening democracy.[60] "It is the force of his personality that has led this country to understand that in this globalized world, there is no alternative to regional integration, to free trade, to sane economic policies," said Jeffrey Davidow, the institute's president.[61]
Toledo has received honorary doctorates from University of Winnipeg,[62] Los Andes Peruvian University,[19][63] and 50 other prestigious universities around the world—for a total of 52. He has lectured in more than thirty countries on issues of poverty, economic growth, and democracy, as well as on the benefits of human-capital investment.
July 28, 2011 was the tenth anniversary of Toledo's inauguration, an event catalogued in the Associated Press's "Highlights in History" for that day.[64]
In October 2011, Tbilisi State University gave a state honorary doctor degree to Toledo "for his special role in establishing and developing relations between Peru and Georgia."[65]
Many of Toledo's harshest critics recognize the high premium that Toledo put on democratic processes and safeguards despite the mostly negative press coverage of his presidency. In recognition of his efforts to keep the press unrestrained Enrique Zileri, President of the Peruvian Press Council, affirmed in May 2003 that there were no problems with press freedom in Peru.[19]
In July 2010, the United States Senate honored President Toledo for his “policies which contributed immensely to the improving Peruvian economy” and “helped make great strides in the areas of education, healthcare, and poverty-reduction.” The resolution was proposed and read in Congress by Senator Charles E. Schumer of New York.[66]
Among Toledo's publications are works on economic growth and structural reforms. However, his latest book, Las Cartas sobre la Mesa (The Cards on the Table), describes his political career which led him to found the party Perú Posible.[6]
| Political offices | ||
|---|---|---|
| Preceded by Valentín Paniagua |
President of Peru 2001 – 2006 |
Succeeded by Alan García |