Alberto Fujimor, who was Peru’s President, was under pressure and it was observed that the government may have been taking the loan chiefly to give a veneer of legitimacy to measures that in reality reduced judicial independence and concentrated more power in the executive. Moreover, a decision had to be made by the officials of the bank on whether to proceed with the agreement believed it offered a rare opportunity to address a number of longstanding ills-including limited access to the justice system, a crumbling infrastructure, and insufficient training of judges and prosecutors. But three months after the agreement had been signed, Peru's Congress-ruled by members loyal to the President-passed a measure which led Bank officials to challenge the good faith of the authorities.
The members of the Council resigned en masse and, by six months, the Bank postponed the effective date of the judicial reform loan in result -halting any disbursement of funds. But in the days following the statement, the government of Peru put increasing pressure on the Bank to alter its mind-and eventually summoned the Bank's country manager for Peru to a personal meeting with President Fujimori. The country manager would have to determine whether to stick with the loan postponement-and, more generally, take stock of what was really going on in Peru. Would the loan help a government genuinely embarked on reform? Or might it just abet a government bent on subverting the judiciary to further its own political aims? HKS Instance Number 1779.0
PUBLICATION DATE: March 31, 2005 PRODUCT #: HKS358-PDF-ENG
This is just an excerpt. This case is about GLOBAL BUSINESS
Related Case Solutions & Analyses:
Cybertech Project (A)
Apple Computer–1995 (A)
Syscom Computers
Rick Surpin (C)
Frost Inc. (C)
Murray Ohio Manufacturing Co.
Pixability: Bettina’s Board Walk
Accelerace: Accelerating Start-up Growth in Denmark
Automotive Foreign Direct Investment in the United States: Economic and Market Consequences of Globalization
ArcelorMittal (A)
