More specifically, the Team recommends that USAID's Democracy and Governance program strengthen
collaboration with the Agency's Alternative Development Program to consolidate the San Martin effort
as a model of democratic local governance that can be replicated in other area, including both coca 
growing regions and non coca regions. USAID should also use the Peru Ecuador border initiative to
apply some key approaches and lessons learned from the San Martin project. Finally, the Team
recommends that USAID search for ways to stimulate national debate on, and practical progress toward
democratic decentralization and more local control of resources.
Although the main democracy and governance problems that the Team identified lie in the sphere of
institutional politics and central government power, the strategies recommended in this report for
overcoming these problems lie primarily within the sphere of civil society.   This is because to date most
governmental institutions have not been capable of significant  reform from within , for a variety of
reasons explained in the text.   Hence this report stresses the responsibility of key actors in civil society,
as well as within the international community, to provide checks on state power and hold government
The OAS mission has recently proposed a set of institutional reforms that should be undertaken in Peru
in the short term, involving concrete government actions as well as dialogue and collaboration with the
political opposition and civil society organizations.  These include reestablishing the independence of the
Judiciary, strengthening the rule of law and separation of powers, ensuring adequate protection of human
rights and press freedom, and reforming the electoral system itself.  For the most part these are also
priorities cited in this report, and Team members consider their initial acceptance by the government as
well as the political opposition to be an encouraging sign.
However, given the Fujimori government's past record, the polarized political climate and the lack of any
firm agenda for dialogue on or enactment of these proposals, it too early to determine whether there is a
genuine commitment to reform on the part of authorities.  It is also too early to conclude whether other
political and social actors will participate in any such process.  
In the short term
, therefore, the Team
recommends that USAID respond to this new framework in the following ways:
Monitor government/congressional response to OAS proposals
USAID should support the efforts of qualified nongovernmental organizations to monitor government
response to the OAS proposals, particularly in the sensitive areas of justice, human rights and press
freedom.  In certain cases, initial  good faith  actions on the part of the government may be expected by
international observers as well as opposition leaders as a prelude to subsequent collaboration.
Many items on the reform checklist provided by the Gaviria Axworthy mission are by definition not
executive but 
 initiatives, and thus must originate in or pass through the Congress.  Therefore,
USAID should also support NGO efforts to track the progress of bills aimed at addressing the
deficiencies identified by the OAS in order to identify the obstacles obstructing the path to legislation
and policy. USAID can then make a determination about whether it is prudent to change its posture with
respect to legislative strengthening and support.
Encourage national dialogue and consensus
H:\INCOMING\July24\MSI Submission\Fn Email.doc

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