March 23, 2002: Presidents Bush and Toledo in Peru

Presidents George W. Bush and Peruvian President Alejandro Toledo delivered the following remarks at a joint press availability at 6:00 PM EST in the Presidential Palace in Lima, Peru, on March 23, 2002.

PRESIDENT TOLEDO: This is an historic visit made by a friend representing a country with which we have had an historical relationship. It is not merely a diplomatic visit, it is an official working visit and we have touched on substantive issues, which range from the open struggle against poverty, a war without quarter against terrorism and drug trafficking. I repeat, a war with no ambiguities whatsoever, against terrorism and drug trafficking.

We’ve touched on issues of trade, education, even the Peace Corps. But, my friend, George Bush, this Peru is a country that welcomes you with open arms. We are renewing our friendship and this is the beginning of a new era in the relationship between Peru and the United States. And I’m extremely happy that the two of us are able to begin this relationship.

President George W. Bush and Peruvian president Alejandro Toledo (right) wave from the steps of the Presidential Palace in Lima, Peru, March 23, 2002. "It is an honor for me to be the first sitting President of the United States to visit Peru," said President Bush during the two leaders' joint press conference where he explained that steps such as reintroducing the Peace Corps to Peru are being taken to strengthen the relationship between America and Peru.

I know you seem younger than I am, but we are both 55 years old. And we have a long way ahead of us to work together. I know that we both have the energy and the stubbornness, particularly with regard to the issue of terrorism and drug trafficking, because your country, just like mine, loves peace. It appreciates life. And we are united on this. And as of today, we have a strategic alliance of hope for the future.

My friend, welcome to my country.

PRESIDENT BUSH: Gracias, Senor Presidente. It is an honor for me to be the first sitting President of the United States to visit Peru. I want to thank you for the invitation. It’s a greater honor for Laura and me to come here as guests of a leader who symbolizes Peru’s revitalization.

President Toledo and I have now met three times. At each meeting I’ve been impressed by his commitment to democracy and his determination to improve the lives of the people of Peru. Peru is on the path toward greater freedom and greater prosperity, and America will be the partner in this progress, Mr. President.

Earlier today, our two governments signed an agreement that will reintroduce the Peace Corps to Peru, after an absence of nearly 30 years. The first volunteers will arrive in August, a symbol of the stronger ties between our people and the stronger relationship between our nations.

This relationship is based on common values and common interests. Our nations understand that political and economic progress depends on security — and that security is impossible in a world with terrorists. Peruvians have been reminded again this week of the terrible human toll of terror. On behalf of the people of the United States, I express our deep sympathy for the victims of the recent bombing and our deep sympathy for their loved ones.

President Toledo and I share a common perspective on terrorism: We must stop it. Since September the 11th, Peru has taken the lead in rallying our hemisphere to take strong action against this common threat. And I want to thank the President for his leadership and his strong support.

Our nations understand that freedom is only as strong as the institutions protecting it. The United States is actively supporting the President’s efforts to strengthen Peru’s democratic foundations. And we will continue to support the work of Peru’s Truth and Reconciliation Commission, which is helping correct the abuses of the past and set the course for a better future.

President Toledo and I both understand the importance of providing economic opportunity to all our citizens as a hopeful alternative to the drug trade. We discussed ways to make the assistance that the United States provides under the Andean Regional Initiative more effective. And I emphasized to the President my commitment to renew and extend the Andean Trade Preferences Act. The United States House of Representatives has moved this legislation. It is stuck in the Senate, and I urge the Senate to act.

President Toledo and I have agreed to renew discussions on a bilateral investment treaty, and to complete a debt-for-nature agreement, to help Peru reduce debt payments while it protects its biodiversity.

I also informed the President that Secretary of Commerce Don Evans will lead a trade mission to Peru and the Andean region later this year. By building these ties of commerce, both our nations create more jobs, more investment, and more benefits for workers and consumers.

President Toledo and I believe that education is the key to participation in the global economy. The President’s own path in life is a lesson in how education opens up doors to opportunity. He is passionate on the subject. I love his passion, and I appreciate his commitment.

And I’m pleased to announce that our country will help establish an Andean Center of Excellence for Teacher Training, with a base here in Peru. The center will support President Toledo’s goal of quality schools with quality teachers, that give more Peruvians the literacy and learning they need to succeed.

I’ve also directed the U.S. Commerce Department, and the U.S. Trade and Development Agency, to establish an Andean e-business fellowship program, to give more high-tech professionals from this region the chance to learn more about information technology.

President Toledo and I have a strong relationship. I’m inspired by his life, I’m inspired by his story, I’m inspired by his leadership. I’m impressed by Peru’s progress and I’m very confident of Peru’s future.

Thank you, sir. (Applause.)

Q Mr. President —

PRESIDENT BUSH: Which one? (Laughter.)

Q You, sir. Given increasing evidence that the FARC is now operating in Peru, will you be willing to provide President Toledo extra assistance in fighting the war against terrorism here, should he ask for it? And are you concerned that what was once a regional problem in Colombia or something restricted to Colombia is now spreading across Colombia’s border and threatening its neighbors?

PRESIDENT BUSH: We discussed the neighborhood at length today. President Toledo told me that he is — now that he’s done a very good job, or the country’s done a good job, of making sure that relations with neighbors, north and south, are peaceful, that he is moving troops and making decisions to prevent terrorists from coming into his country from Colombia. And we will help him in this effort. That’s part of the reason why I’m here — is to support our mutual desire to fight terror and to help this good democracy thrive.

Later on today we’ll be talking with Presidents from — and one Vice President, from the Andean nations. And we’ll be discussing our common desire to prevent terrorist groups like the FARC from holding people and nations hostage. And I’m absolutely convinced, having talked to the President three times, that he will do everything in his power to rout out terror, not let it take hold, and preserve the institutions that make Peru a beacon for democracy.

Q — (inaudible.)

PRESIDENT TOLEDO: No, the evidence that we have is — I repeat, the evidence that we have indicates that there is no transfer of the FARC into Peru. However, we are adopting every measure possible. The Minister of Defense was at the border very recently. We took our bases that were along the border with Ecuador — where, after signing the peace agreement, there is no need for their presence — we removed them as a precautionary measure over to the border with Colombia.

As President Bush just indicated, this is a joint task. What happens to Colombia affects us, and vice versa. But here, too, we’re partners. And I think that the issues that have to do with the Andean community are issues on which President Bush is extremely interested and I’m sure that we will be working together on these. We are going to work together on this; I’m sure of that.

Q President Bush, you granted an audience recently to my daily, El Comercio, at the White House, and you said in that interview that Peru, for the United States, is not only a friend, but an ally. I’d like to ask you, beyond trade preferences and the commitment to struggle against drug trafficking, what will be the major elements in your administration that would highlight this different relationship you want to have with Peru? For example, would you open up an antechamber, so to speak, for Peru to come into a free trade agreement negotiation with the United States?

And let me ask President Toledo, with regard to the issue of shared responsibility in the fight against drug trafficking, would you take on the commitment before President Bush to establish a control office that would monitor whatever the United States does not comply with?

PRESIDENT BUSH: I listed quite a few things in my opening remarks about our relationship. I believe strongly that if we promote trade, and when we promote trade, it will help workers on both sides of this issue — it will help Peruvian workers, help U.S. workers.

The Andean Trade Preference Act is a cornerstone of good policy, as far as I’m concerned, and it’s a cornerstone of good relations. We talked about a treaty on investment; that could be the beginning of a trade treaty. The President brought it up. He asked whether or not we would consider it. I said we’ll take it back and discuss the issue when I get back to Washington, D.C.

There’s nothing more important than fostering good economic relations. I mean, the best way for people to get lifted out of poverty is a job. And the best way to encourage jobs is through trade.

I mean, what we’re beginning to realize in the world is development aid is important, but development aid pales in comparison to the amount of capital that’s generated through trade in the marketplace, in the private sector. And countries that open markets and countries that trade freely are countries where the people are more likely to be able to succeed. And I would not discount the importance of our relationship when it comes to fighting terror.

The world has called us to action. This is a new era. We’re fighting a new kind of war. And we’re strong allies in that war. And when we win, our peoples will be better off. You can’t alleviate poverty if there’s terror in your neighborhood. It’s impossible to achieve what we want if terrorists run free.

And so I think one of the best things we can do to lay the foundation for a better tomorrow is to be tough and firm and not yield to threat. And that’s exactly the way the President feels, and I can assure you that’s the way I feel.

PRESIDENT TOLEDO: I think that in the war against drug trafficking and terrorism, we are partners, not simply through conviction, my good friend, but because we, ourselves, have experienced it. We have experienced the effects of terrorism here for 20 years. The United States, on September 11th. And I have here my friend, Colin Powell, with whom we have a very solid human relationship because, in this very palace, we were witnesses to the news of September 11th, while we were having breakfast.

On this issue we are partners. I am stubborn. I am stubborn and I believe it is not incompatible to respect the law and to be strong-handed with regard to the issue of terrorism and drug trafficking.

I do know there’s been a decision from the U.S. government to increase support for the struggle against drug trafficking, and I appreciate that enormously. We still have a long road ahead to walk together in this struggle, but we will do it.

And, Mr. Journalist, I want to underscore something that was referred to by President Bush. Trade preferences is an issue on which President Bush has demonstrated — and I am a witness — his will for congressional approval in the United States. The separation of powers makes it impossible for Presidents to control congresses — just like I don’t control mine. But that’s the way democracy works.

Nonetheless, we have gone beyond Andean Trade Preferences. I have asked of President Bush that he consider an initiative for trade, for bilateral trade and investment within the framework of the Andean community. And we are going to be talking to our colleagues in just a few minutes.

I think it’s important because trade is a synonym for work. And work is a way to deal with poverty. Through work, education and health, we can eradicate poverty. We are partners on the issue of trade, on the issue of drug trafficking and terrorism, in the defense of democracy and of human rights, my friend — human rights.

Q Mr. President, the Peruvians have expressed an urgent desire for the resumption of U.S. drug interdiction flights in Peruvian airspace. You told us yesterday in Monterrey that the issue was under rigorous review. My question to you, sir, is it your ultimate goal to see a resumption of those flights? And what preconditions would you put on those flights before authorizing resumption?

And for President Toledo, if I could, sir, if you are to expect a maximum effort at a partnership with the United States to eradicate drug trafficking, why won’t you make the same commitment to coca eradication as your neighbors, Bolivia, have? You’ve talked a lot about the problem being drug trafficking, but you have not made the same commitment on coca production, sir.

PRESIDENT BUSH: John, we are reviewing all avenues toward an effective policy of interdiction. As you know, we had a terrible situation where a young mom and her daughter lost their life; that caused us to step back to take a look at our policy at home, and then to work with the Peruvian government to figure out how best to be effective at interdicting drugs.

And so the discussions are ongoing. And we want to make sure that when we work with countries like Peru, that we achieve the common objective, which is to make it hard for those narco-traffickers to move through their airspace, across their land, or in oceans.

I want to say something about — there’s a lot of talk about interdiction, and there should be. And there’s a lot of talk about battling the narco-traffickers here in the Andean area, and we will. But our country has an obligation, as well, not only to provide support and help. The President mentioned that we have expanded the direct aid to Peru on this issue, which we have. We’ve tripled it, up to about $200 million — about $195 million, I think it is. But the best thing that America needs to do is reduce demand for drugs. We’ve got to do a better job of convincing our own country to quit using them. As demand for drugs goes down, it will take the pressure off of our friends in Peru.

So we’ve got a double obligation, it seems like to me — on the one hand, to provide help and aid that’s effective and will work. And that’s exactly what we spent a long time talking about, in all three of our meetings. But I want to remind our Peruvian friends that we’ve got to do a better job at home of convincing Americans to stop using drugs. And part of our drug initiative will be to focus on the demand side. Less demand for drugs will mean that the supply for drugs will be less urgent. And that will in turn help the region.

PRESIDENT TOLEDO: Look, my friend, let me deal with your question head on. In 1990, the number of hectares with coca cultivation was approximately 140,000 total. Today, we are down to 34,000 hectares where we have coca cultivation. Enormous progress has been made.

I know it’s not enough. We have a long path ahead of us yet. And we have to do this together. I know that the drug traffickers have become more sophisticated over time — they have more high-tech capabilities. And now we, too, have to push forward in that direction.

I want to be very open, and I apologize to my friend, President Bush, now. We are not fighting against drug trafficking in order to satisfy the United States or Europe. Drug trafficking, in partnership with terrorism, is an issue of national security. It’s an issue of national security. On Wednesday, they killed nine people — nine of our brothers and sisters — and there are 30 people wounded. I have publicly stated — and I want to repeat this — we are not going to let this stand.

So let me respond to you. We have met a substantial reduction. We still have 34,000 hectares to go. But we are going to do this together.

Final point. I think President Bush is extremely sincere — he’s extremely sincere and honest when he recognizes that as long as there is a demand out there, there will be a supply. As long as there are consumers, there will be producers. And so, together, we need to work on reducing the number of consumers, cure them better, make them better. And we need to reduce the amount of hectares under cultivation.

And, footnote here, it’s also true that the statistics indicate that although levels are still low, there is an increase in the consumption of cocaine among youth in Peru. And that is also part of our concern with regard to national security.

Q President Bush, you are in a region now that’s been devastated by terrorism and subversion and drug trafficking for over three decades. You’re offering us the Peace Corps. I would ask you if you’re willing, as President of the most powerful nation on Earth, to lead a Marshall Plan for South America?

PRESIDENT BUSH: I appreciate that. I think I said more than just the Peace Corps, if I’m not mistaken, in my opening comments. Obviously, our nation is committed to this part of the world. I’ve come to Peru as the first sitting President to express our solidarity with Peru and the people, as well as express my appreciation for a reformer who got elected who’s willing to defend the institutions that make democracy go.

I’ll repeat if you’d like me to, go through the litany of things I just said — the Andean Trade Preference Act, the bilateral action on investment, money for education, money to fight drugs. We’ve tripled the amount of money — I believe it’s from $50 million up to $195 million available. And so I think our commitment is — I think our commitment speaks for itself. And I appreciate so very much the chance to come and explain it to the Peruvian people that ours is more than just words — ours is deeds and action.

Q Good afternoon, President Bush. Buenos tardes, Senor Presidente. President Bush, many lawmakers in Congress are growing increasingly concerned about your policy in the Middle East, wondering if the very talk of potential high-level negotiations involving Vice President Cheney, specifically, with the Palestinian leader, Yasser Arafat, might not, in fact, send a signal that terrorism against Israeli civilians can achieve some limited political aims. I’d to ask you, sir, why you’re contemplating that, and why those who wonder if that is not the case are incorrect?

PRESIDENT BUSH: Well, first of all, I think there’s been no question that the United States has stood strong with Israel. And we’ve made it very clear to Mr. Arafat that he is not — he’s not doing all he can do to fight off terror. I can’t be any more clear than that. Vice President Cheney said, depending upon on the Zinni mission and General Zinni’s recommendation, he might go back, if and when Arafat performs.

Surely those in the Congress you talk about appreciate the fact that the administration is engaged, and sent General Zinni into the region. We laid out the Tenet plan, which is the way to bring some security to the region — which would then lead to the Mitchell plan. And we’re doing everything in our power to get the parties into Tenet. And we’ll continue working hard to get them to Tenet.

Q Even if the violence continues —

PRESIDENT BUSH: If and when — if and when Mr. Arafat — if and when —

Q — (inaudible) —

PRESIDENT BUSH: Excuse me. If and when Chairman Arafat performs. That’s what we have said. General Zinni went to the Middle East; he’s leading discussions. But people shouldn’t mistake our desire to get into Tenet as anything more than a desire to get to peace. And we’ll continue working to do so.

And Prime Minister Sharon knows where the United States stands. We’re strong allies with Israel. We have been ever since I’ve been the President, and we’ll continue to be strong allies with Israel.

Q Good afternoon to both Presidents. President Bush, just a few days ago I was able to ask you in Washington about leadership in the fight against poverty. And on this, aside from the issue of being 55 and the fact that you’re wearing the same color ties, you are in agreement with President Alejandro Toledo, who also insists on fighting against poverty. But the fight against poverty presupposes — and this has been stated by Dr. Toledo — thinking of reducing arms in Latin America, because for every tank or F-16, we could buy a lot more schools. Mr. President, I’d like to know your views on this, and the views of President Toledo with regard to this issue. The possibility of arms control in the South American part of the hemisphere. And the same question for President Toledo.

PRESIDENT BUSH: We may be the same age, but el tiene pelo negro. (Laughter.) Yo tengo pelo gris. (Laughter.)

I appreciate President Toledo’s work to have a security arrangement in place in the neighborhood amongst the countries bordering Peru that will then allow him to reinvest in education. We talked about that. And I think that is a strong commitment and a wise commitment.

As far as my country’s commitment goes, I gave a speech in Monterrey, Mexico, two days ago where I committed our country to a 50-percent increase in development aid. But I said it’s time for the world to stop looking at inputs and to focus on outputs, and that the United States, developed nations, must do more financially. And we’re leading the way.

But we expect other nations to develop the habits that will lead to a better opportunity for their people: rule of law, a focus on education, and good health care. President Toledo understands that, he’s been a leader in that effort. And I think what I said in Monterrey was very important, that unless we all focus on how programs benefit people directly, not matter what the efforts or strategy is, it’s likely to lead to failure. But programs and policies that understand the worth of each human being, that each individual matters, are those programs which will be successful. And so our country will try to foster that. And this President has made that commitment, for which I am grateful.

PRESIDENT TOLEDO: Aside from the fact that President Bush has very good taste with regard to color in ties — (laughter) — he’s also taller than I am. (Laughter.)

On this issue, Raul, of military expenditure, we discussed it with him. And here I want to strike a difference between military expenses for armed conflicts between countries, and military expenditures for defense against terrorism and drug trafficking, because these are two separate issues.

I think that there is a major challenge in the world in order to survive in this globalized and savagely competitive world we live in. We need to invest more in the minds of our people. Basically, what this means is investing more in nutrition, health, education, and justice for the poor.

We won’t be able to deal with the challenges of this globalized world unless we invest in the knowledge of our societies. The question immediately arises, and obviously so, in an economy that is growing that is overcoming recession, where you get the money to invest in nutrition, health and education? Well, we’ve made an appeal to countries at the bilateral level. And there the United States has played a very generous role at the donors table in Madrid. And I want to publicly express my appreciation, Mr. President.

There has been debt conversion, external bilateral debt swap, for social investment. And there we have been able to get a commitment of about $1 billion. This is one way to establish a financial space to invest in health, nutrition and education.

The other thing is that I believe it makes no sense in this world that as long as we have a country with 54 percent of Peruvians who live below the poverty line, or 16 percent who live below the dire poverty line — when I was born, the very first minute of my life when I opened my eyes, I saw the face of dire poverty. I know what this means. That’s why I am convinced that we can make an effort to reduce military spending, to reorient those resources towards investment and justice and education and health. Because the defense of a country no longer depends on how many tanks, or ships, or aircraft we have. It’s all about how strong our economy is, how educated our people are.

And please excuse me for being so passionate on this subject, but there is absolutely no doubt on this. And the empirical evidence is very harsh with regard to the return on investment on education and health and nutrition for our people.

And here, once again, we have another point of coincidence that leads us down the same path together. I conveyed something that’s very close to my heart with regard to the Huascaran education program, and I asked our friend to support us on this. And I will be going to New York, and I’m going to talk to Mr. Bill Gates, to try to promote the Huascaran project even more. But if we reduce military spending, we’re going to have some financial leeway to reorient this money towards the poor, who want to overcome poverty — who want freedom. And we’ll be able to deal with the challenges of the future even better.

Ladies and gentlemen, thank you very much.

November 2, 2001: Letter to Members of Congress Related to Drug-Producing, Drug-Transit Countries

President George W. Bush sent the following letter to members of Congress related to major drug-producing and major drug-transit countries, including many Latin American and Caribbean nations, on November 1, 2001.

Text of a Letter from the President to the Chairmen and Ranking Members of the House and Senate Committees on Appropriations, the House Committee on International Relations, and the Senate Committee on Foreign Relations
November 1, 2001

Dear Mr. Chairman:       (Dear Representative:)       (Dear Senator:)

In accordance with section 490(h) of the Foreign Assistance Act of 1961, as amended (FAA), I have determined that the following countries are major illicit drug-producing or major drug-transit countries: Afghanistan, the Bahamas, Bolivia, Brazil, Burma, China, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, Thailand, Venezuela, and Vietnam.

I note that a country’s presence on the list of major drug-transit countries is not an adverse reflection on its government’s counternarcotics efforts or on the level of its cooperation with the United States. Consistent with the statutory definition of a major drug-transit country set forth in section 481(e)(5) of the FAA, among the reasons that major drug-transit countries are placed on the list is the combination of geographical, commercial, and economic factors that allow drugs to transit despite the most assiduous enforcement measures of the government concerned.

In recent years, we have seen rapidly rising quantities of illegal synthetic drugs entering the United States, especially MDMA (Ecstasy) from Europe. MDMA abuse is an emerging problem that we are studying closely. Because much of the Ecstasy consumed in Europe and the United States is manufactured clandestinely in the Netherlands, we are working closely with Dutch authorities to stop the production and export of the drug. I commend the Government of the Netherlands for its excellent cooperation with the Government of the United States.


I have removed Cambodia from the Majors List. Cambodia was added to the Majors List in 1996 as a transit country for heroin destined for the United States. In recent years, there has been no evidence of any heroin transiting Cambodia coming to the United States. On the basis of this cumulative evidence, I have determined that Cambodia no longer meets the standard for a major drug-transit country and I have removed Cambodia from the Majors List. I will, however, keep it under observation as a country of concern.


I am also noting in this letter various “countries/economies and regions of concern.” These are countries or areas that are not “majors,” but which in the past met, or could in the future meet, the statutory definition. This informational category carries no stigma, penalty, or sanction. This information is provided to keep the Congress informed of those additional countries and regions on which the executive branch is focusing its antidrug cooperation efforts.

The Majors List applies by its terms to “countries.” The United States Government interprets the term broadly to include certain entities that exercise autonomy over actions or omissions that would lead to a decision to place them on the list and subsequently to determine eligibility for certification.

Belize. Belize was removed from the list of major drug-transit countries in 1999 because there was clear evidence that the drug trade was not currently using it as a transit point for drugs moving to the United States. If, at a future date, there is reliable information that U.S.-bound drugs are again moving through Belize in significant quantities, I will again place it on the Majors List.

Central America. Central America’s position as a land bridge between South America and Mexico, together with its thousands of miles of coastline, several container-handling ports, the Pan-American Highway, and limited law enforcement capability, makes the entire region a natural conduit and transshipment area for illicit drugs bound for Mexico and the United States. Currently, only Guatemala and Panama have been designated major drug-transit countries, since there is clear evidence that drug trafficking organizations use their territory to move significant quantities of illegal drugs to the United States. The same is not yet true of Costa Rica, El Salvador, Honduras, or Nicaragua.

Although there is no question that fluctuating quantities of drugs do flow through these countries en route to the United States, the bulk of the drug traffic has shifted away from land routes. Stringent law enforcement and interdiction measures on land have forced trafficking organizations to move drugs along sea routes. In the event that I receive evidence that drugs transiting these countries are having a significant effect on the United States, I will add them to the Majors List.

Central Asia. United States Government agencies have again conducted probes in Uzbekistan and Tajikistan, the traditional opium poppy growing areas of the former Soviet Union. These probes did not show significant opium poppy cultivation. If ongoing analysis reveals cultivation of 1,000 hectares or more of poppy, I will add the relevant countries to the Majors List.

Cuba. Cuba’s geographical position, straddling one of the principal Caribbean trafficking routes to the United States, continues to make it a logical candidate for consideration for the Majors List. While in the past there have been some anecdotal reports that trafficking syndicates use Cuban land territory for moving drugs, we have not confirmed that this traffic carries significant quantities of cocaine or heroin to the United States. For the last several years, much of the suspect air traffic that previously crossed Cuban airspace has shifted to Hispaniola (Haiti and the Dominican Republic). I will continue to keep Cuba under careful observation for any changes in current transit patterns. If there is evidence of significant quantities of drugs transiting Cuba to the United States, I will add Cuba to the Majors List.

Eastern Caribbean. The Leeward and Windward Islands, together with Aruba and the Netherlands Antilles, constitute a broad geographical area through which U.S.-bound drugs pass en route from Latin America. There is no evidence at this time, however, that any of these Eastern Caribbean nations is a major drug-transit country under the definition in section 481(e)(5) of the FAA. The information available indicates that drugs moving through the area are overwhelmingly destined for Europe. I am, therefore, keeping the region under observation and will add relevant countries to the Majors List, should conditions warrant.

Hong Kong. Hong Kong was removed from the Majors List in 2000 and listed as a country of concern. Since 1996, there have been no significant seizures in the United States of heroin linked with Hong Kong. Similarly, the Hong Kong authorities report that in the past 4 years they have made no large seizures locally of heroin destined for the United States. If in the future we detect any drug flows through Hong Kong that significantly affect the United States, I will again place Hong Kong on the Majors List.

Iran. While Iran was once a traditional opium-producing country, the Government of Iran appears to have been successful in eradi-cating significant illicit opium poppy cultivation. The latest United States Government survey of the country revealed no detectable poppy cultivation in the traditional growing areas. Although one cannot rule out some cultivation in remote parts of the country, it is unlikely that it would be sufficient to meet the threshold definition of a major illicit drug-producing country under section 481(e)(2) of the FAA.

Important quantities of opiates reportedly continue to transit Iran en route to Europe, but I have no evidence that these drugs significantly affect the United States, a require-ment for designation as a major drug-transit country under section 481(e)(5) of the FAA. Moreover, Iran has taken extensive measures to thwart the use of its territory by drug traffickers, seizing well above 200 metric tons of drugs annually in recent years.

Malaysia. Malaysia was removed from the Majors List in 1998 because there was no evidence that drugs transiting the country were reaching the United States in significant quantities. That situation did not change in 2001.

North Korea. United States Government observations this year have been unable to confirm reports that significant quantities of opium poppy may be under cultivation in North Korea or that heroin originating in the country may be entering the international drug trade. I continue, however, to monitor the situation. If there is evidence that there is indeed significant poppy cultivation or that North Korea is a transit point for drugs significantly affecting the United States, I will add it to the Majors List.

Syria and Lebanon. Syria and Lebanon were removed from the list of major drug producers 4 years ago after the United States Government determined that there was no significant opium poppy cultivation in Lebanon’s Biqa’ Valley. Recent surveys have confirmed that there has been no detectable replanting of opium poppy, and we have no evidence that drugs transiting these countries significantly affect the United States. I continue, however, to keep the area under observation.

Taiwan. Taiwan was removed from the Majors List in 2000, because there was no evidence that it was any longer a transit point for drugs destined for the United States. Stringent law enforcement procedures, together with enhanced customs inspection and surveil-lance methods, have all but cut off serious flows of heroin from

Taiwan to the United States. At the same time, the opening of major container ports in southern China has diminished Taiwan’s importance for the drug trade. If in the future we detect any drug flows through Taiwan that significantly affect the United States, I will place Taiwan on the Majors List.

Turkey and Other Balkan Route Countries. I continue to be concerned by the large volume of Southwest Asian heroin that moves through Turkey and neighboring countries to Western Europe along the Balkan Route. There is no clear evidence, however, that this heroin significantly affects the United States. In the event that I determine that heroin transiting Turkey, Albania, Bulgaria, Greece, Yugoslavia, Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia, or other European countries on the Balkan Route significantly affects the United States, I will add the relevant countries to the Majors List.

Major Cannabis Producers. While Kazakhstan, Kyrgyzstan, Morocco, the Philippines, and South Africa are significant cannabis producers, I have not included them on this list since in all cases the illicit cannabis is either consumed locally or exported to countries other than the United States. I have determined that such illicit cannabis production does not significantly affect the United States.



Odebrecht Signs Agreement with Government of Peru

Odebrecht and the government of Peru signed an agreement which will allow the Brazilian construction conglomerate to operate in the country, according to Reuters.

Two sources told Reutersthat Odebrecht will have to pay an approximately US$180 million fine over 15 years and admit to paying bribes related to four infrastructure projects.

Another source said, “The 15 years’ time frame was established for the payments because Odebrecht is technically bankrupt.”

However, the fine is less than half the amount owed to Peru for illegal cost overruns caused by Odebrecht’s bribes.

“I’ll charge the rest to Odebrecht’s former partners, as well as businessmen, high-ranking government officials, former presidents and former ministers involved,”
prosecutor Jorge Ramirez told Reuters.

The Odebrecht corruption scandal became public in December 2016. Over the course of more than a decade, Odebrecht funneled nearly US$800 million in bribes to officials of foreign governments, state-owned companies, and political parties across Latin America and the Caribbean.

In its investigation, the United States Justice Department found that Odebrecht paid out  US$29 million in bribes in Peru, which resulted in US$143 million in illicit gains. 

Former Peruvian presidents Aljejandro Toledo, Alan Garcia, Ollanta Humala, and Pedro Pablo Kuczynski, as well as the current opposition leader and several local construction companies, are under investigation in connection with Odebrecht’s illegal bribery scheme. All have maintained their innocence.

Plateau Energy Metals Finds 2.5 Million Tonnes of Lithium in Peru

A large discovery of lithium in Peru by Plateau Energy Metals, a Canadian lithium and uranium exploration and development company, could prove to be a boon for the South American country as global demand for the metal is projected to grow.

Reuters reports that the Macusani Yellowcake unit of Plateau Energy Metals said it found 2.5 million tonnes of high-grade lithium and 124 million pounds of uranium.

Ulises Solis, general manager of the Macusani Yellowcake unit, said in a news conference that a planned feasibility study in 2019 would reveal how much of the metal deposits would be economically viable.

Laurence Stefan, president and director of operations of the Macusani Yellowcake unit, believes that Peru could start exporting US$ 500 million worth of lithium carbonate per year by 2021, according to Andina.

Pointing out that 90 percent of lithium refineries are located in China, Stefan said that Peru has an opportunity to build lithium refineries and eventually battery and electric car factories.

Peru has not been a consistent exporter of significant quantities of lithium carbonate. According to trade data from UN COMTRADE, Spain imported US$ 1,234 worth of lithium carbonate from Peru in 2017. China imported US$ 654,675 in 2013, US$ 654,150 in 2014, and US$ 110,250 in 2015.

Growing demand

Lithium is the key component in the rechargeable batteries that power modern technology ranging from smartphones to electric cars. As demand for these and other consumer goods grows, countries with significant lithium deposits will be able to cash in.


According to International Lithium Corp., worldwide lithium reserves are estimated to be around 23 million tonnes with a significant amount located in South America.

“Deposits of lithium are found in South America throughout the Andes mountain chain. Chile is the leading lithium producer, followed by Argentina. Both countries recover the lithium from brine pools… However, half the world’s known reserves are located in Bolivia, a nation sitting along the central eastern slope of the Andes… According to the US Geological Survey, Bolivia’s Uyuni Desert has 5.4 million tonnes of lithium.”

Peru Holds Rate Steady, Sees Inflation in Range in Q2

Peru’s central bank left its policy rate steady at 2.75 percent, noting the fall in inflation in the last five months, declining inflation expectations and economic activity that is below potential.

The Central Reserve Bank of Peru (BCRP), which cut its rate in March and January this year, also reiterated its recent guidance that it is paying close attention to inflation and would consider making additional changes to the policy rate if it were necessary.

BCRP has been in an easing cycle since May 2017 and has lowered the key rate six times by a total of 150 basis points.

Peru’s inflation rate has been falling rapidly since March last year when food prices jumped in response to devastating floods that killed more than 100 people and wiped out crops and roads.

In March inflation fell to only 0.36 percent, sharply down from 3.97 percent 12 months ago, and well below the BCRP’s target range of 1-3 percent.

The central bank said inflation is projected to return to its target range in the second quarter and then gradually converge to 2.0 percent by the end of this year. But inflation expectations 12 months ahead have continued to decline to 2.18 percent.

The Peruvian sol has been relatively steady in the last year and was trading at 3.22 to the U.S. dollar today, up 0.9 percent this year.

This article originally appeared on and is reproduced here with permission from the author.