Former Prime Minister had hard view on debt

Press, 26 June 1987, Page 23

Former Prime Minister had hard view on debt

NZPA-Reuter Lima Luis Alva Castro, who resigned recently as Peru’s Prime Minister and Minister of the Economy, oversaw the implementation of Peru’s tough foreign debt stance and its confrontation with the International Monetary Fund (1.M.F.). He was the author of unorthodox economic policies adopted during the first 22 months of President Alan Garcia’s Government which spurred economic growth last year to the highest level in Latin America. Widely viewed as a presidential contender for elections in 1990, Alva steps down as the economy, which reached a 9 per cent growth rate, begins to show signs of deterioration.

The economist,aged 45, recently weathered mounting criticism as inflation accelerated, contributing to labour unrest and a general strike on

May 19.

As Peru’s second vicepresident and a legislator in Congress, he is expected to maintain a high profile.

Alva Castro has described the IMF as a colonial-style institution and as a bankers.’ “gendarme.” He has also likened United States international economic policies to a “big stick."

The confrontation with the fund reached its height last August when Peru lost its borrowing rights at the 151-nation organisation because the country refused to clear nearly a year’s worth of arrears.

In concert with President Garcia, Alva Castro has slashed debt repayments to 10 per cent of export earnings, suspending most payments on Peru’s overall lUSI4B (523.668) foreign debt Arrears now stand at over SUSS.SB ($9.298).

Alva Castro’s self-des-

cribed anti-imperialist stance is in step with the ideology of the ruling American Revolutionary Alliance (APRA), which he joined as a. student

He was born in the northern citv of Trujillo and he was educated in an Army-run military school in Lima before returning home to earn an economics degree from the National University of Trujillo. Government spokesmen said that he was jailed between 1970 and 1972 because of political persecution by the military government.

Once freed, he pursued a business pareer which included management posts in a foundry and a soda bottling plant

With Peru’s return to democracy in 1980, he became A.P.R.A.*s leading legislative spokesman on economic matters. He is also the author of three books on Latin American debt.