When the World Bank signed an agreement with the Government of Peru in December 1997 to provide a $ 22.5 million loan to reform the outdated and corrupt judicial system of the country, the bank knew that before risk. Peruvian President Alberto Fujimori has been under fire, and observers believed possible that instead show real commitment to reform, the government may be seeking credit, mainly to give the appearance of legality of measures that actually reduce the independence of the judiciary and concentrated more power in the executive branch . In general, however, the bank officials who had to decide whether to proceed with the agreement of thought that offer a rare opportunity to address a number of long-standing poverty, including limited access to the justice system, the destruction of infrastructure and the lack of training of judges and prosecutors. But just three months after the agreement was signed, Peru Congress dominated members loyal to the president took steps that led the bank officials to question the integrity of the government. The new law limited the powers of one of the pillars of the loan agreement, the National Council of the Judiciary, an independent body authorized to ratify and remove judges and prosecutors. Members of the board resigned en masse, and in response, the bank postponed the date of entry into force of the judicial reform loan for six months, cessation of all spending. But in the days following the announcement by the Government of Peru to put more pressure on banks to change their minds, and finally brought the country director of the bank in Peru to a personal meeting with President Fujimori. Country Director must decide whether to stick with the loan deferment and, more generally, to take stock of what was actually going on in Peru. Loan will help the government genuinely started to reform? Or maybe it's just encouraging governments bent on undermining the judiciary for their own political purposes? HKS Case Number 1779.0 "Hide
by Kirsten Lundberg, Philip Heymann 3 pages. Publication Date: December 1, 2004. Prod. #: HKS574-PDF-ENG
Related Case Solutions & Analyses:
Financial Statements and Ratio Analysis
Jeffrey Sonnenfeld (B): The Road to Redemption
Emerging Networked Business Models: Lessons from the Field
Note on Valuing Equity Cash Flows
Industrial Relations Issue In Irish Rail (Iarnród Éireann)
Google’s Case Questions
DonorsChoose.org: How Technology Facilitated a New Funding Model
Proximity Designs
Spss Assignment
Westmont Retirement
