• by IPS Correspondents (lima)
• Thursday, November 17, 1994
• Inter Press Service

LIMA, Nov 17 (IPS) - Peru's foreign creditors should not punish the South American nation for its economic adjustment programme's success, Economic Minister Jorge Camet said Thursday.

"On the contrary, this government's economic success in overcoming hyperinflation of nearly 7,000 percent and modernising the productive and state systems will favour negotiations with the banks," he said.

Camet thus refuted the British "Financial Times," which reported Tuesday that Peru's creditors would resist granting easy terms to a country that has made excellent economic progress and achieved a record level of hard currency reserves.

Peru's Central Bank reserves total 5.5 billion dollars, thanks to privatisation, which brought in nearly 2.5 billion dollars, and a rigid economic adjustment programme that reduced government spending for four years.

Peru owes some 6.5 billion dollars to 150 different foreign banks - mostly in the United States - some of which have filed suit for payment.

Having refinanced its debt with international organisations in 1991 and with the Paris Club in 1992, the government of President Alberto Fujimori now seeks to address its standing with foreign private banks.

The country's willingness to pay has pushed the price of its external debt bonds up from eight cents to 56 cents, and hardened the attitude of the committee representing the banks.

According to Camet, "it is natural for a creditor to want to collect his due, but Peru requires, needs and deserves special conditions, and our proposal will reflect that. We will accept no other terms."

"To suggest that we should use our five billion dollar reserves to pay the debt is absurd. We need that much for the imports that keep our productive system active and consumption levels up," he added.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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