LATAM-TRADE: Andean Pact Limps to Meeting Tired and Out of Pocket

By IPS Correspondents Reprint | | Print |

Abraham Lama

LIMA, Mar 7 1996 (IPS) - The security measures are in place and the presidents primed for the Andean Pact meeting scheduled in Peru Friday, even though old financial and institutional difficulties threaten to cripple the body.

The Pact organisation was forced to suspend all action when it ran out of funds last year and the Presidents attending the meeting in Trujillo, on the northern coast of Peru, will face an agenda loaded with problems.

The Andean Pact was first formed in 1969, in order to create a regional trade bloc, and it is currently made up of Bolivia, Colombia, Ecuador, Peru and Venezuela.

The leaders will discuss the situation of Peru, a nation suspended from the group because of serious disagreements on tariffs, along with the administrative reforms within the bloc, and how to deal with the almost terminal lack of funds.

“The institutional outlook for Bolivia, Colombia, Ecuador and Peru’s presidents in Trujillo is ugly: insolvency, the unpaid debts of three member countries and the atmosphere of unwillingness,” said analyst Jorge Zavaleta.

According to Chilean daily ‘El Mercurio,’ the overdue payments from Bolivia, Ecuador and Peru are being interpreted a loss of interest in Andean integration in diplomatic circles.

The apathy is such that Venezuela’s President Rafael Caldera will not even be attending the meeting.

All the governments of the three debtor nations have offered to make up their back payments, but have not yet done so, and the host nation, Peru, has not paid up its outstanding 800,000 despite getting the parliamentary go ahead last week.

Meanwhile, the Andean Pact headquarters in Lima, which were left paralysed in Mar. 1995, are currently functioning with a minimum of essential personnel.

“We have come to work of on our own initiative. They explained that the suspension is still on because of the lack of funds, but we think this will be resolved soon. We don’t think the governments will let the Andean Pact crumble,” said one worker who asked to remain anonymous.

Directing Secretary of the Cartagena Agreement Council (of the Andean Pact), Jose Antonio Garcia, attending the preliminary meetings in Trujillo this week, gave a more optimistic point of view.

“The debtor nations have assured us they will pay their quotas in the next few days. We are operating at an indispensible minimum but we are not thinking of totally closing our doors,” he said.

Peru, Colombia and Venezuela have to contribute 1,5 million dollars to keep the Andean Pact going each year, while Ecuador and Bolivia have lower payments of 500,000 each.

In 1982, the Andean Pact imposed a series of cut-backs, reducing their staff from 400 to 120, most of whom are currently suspended from action at present.

Peru and Bolivia have been owing their dues for a long time, and in 1993 it was officially announced that both countries had debts dating back five years.

In order to help them with the payments, the other Andean nations agreed to a 30 percent reduction of the debts, making a total of 4.7 million dollars for Peru and 1.55 million for Bolivia.

However, even when offered these facilities, neither of the nations paid up, nor did they pay their later contributions.

“Peru has paid 300,000 dollars, and has promised but not produced a further 800,000 which we hope to see in the next few days. But the old debt, for nearly five million dollars, has been frozen by the government,” said Garcia.