fervent support for Alejandro Toledo, there is still a great deal of residual disgust with the government.
Whatever Peruvians think of him now (polls show his popularity is slipping), Toledo is the most visible
leader of the opposition.  As such, his public behavior and strategic decisions in the months ahead are
critical.  His actions and words thus far suggest Toledo is a politician interested in peaceful participation
within a democratic process.
Fourth, the elections have generated both new constraints and potential opportunities in terms of working
with government institutions, that may have implications for our recommendations.  In the short term, the
opposition protests, the public clamor for institutional reform, the pressures being applied by
international actors, and the general need for the government to re establish its legitimacy in the wake of
the electoral process in order to govern effectively in its third term, seem to point the way toward a
genuine opportunity for a political opening of sorts.  While there is certainly cause for skepticism where
the Fujimori government is concerned, the donor community should plan for a phased approach for
democracy and governance efforts.  In other words, if concrete progress is made on certain reforms, the
benchmarks for which have been set by the OAS mission proposal, then USAID could consider moving
forward on other priorities or partners, including government institutions.  If, on the other hand, the
government renegs on its promises to deliver reforms, USAID ought to maintain its emphasis on support
for civil society activities that promote a system of institutional checks and balances.
H:\INCOMING\July24\MSI Submission\Fn Email.doc

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