South America: Flair, Firmness And Ideas

The noontime sun beat down on a weather-beaten throng of 20,000 assembled in the dusty market town of Casa Grande. Normally toiling in nearby sugarcane fields, the villagers stood in the withering heat waiting for an apparition from the sky. As a whining white air force helicopter came into view, the crowd spotted the broad, beaming face of President Alan García Pérez, waving a white handkerchief in greeting. "Alan!" thundered the crowd as the helicopter set down in a swirl of dust. "Alan! Alan!"

After wading to the platform through a sea of outstretched hands, the lanky, self-assured García, 36, delivered the kind of rousing, nationalistic exhortation that audiences across Peru have come to expect. "A government of the people," he declared, "is a government where the people produce their own history." In countless speeches in the countryside, in the slums of Lima and from the balcony of Government Palace, García has spread the same message: the 19 million people of his hardscrabble country can shape their own destiny, even in the face of desperate poverty.

In office a mere six months, García has already established himself as one of the most admired and influential leaders in Latin America. Part preacher, part pedagogue, he is praised for injecting new vigor into a crippled government and moribund economy. In addition, he has shaken boardrooms from Wall Street to Tokyo with his defiance of the multinational banks that hold many of Latin America's burdensome loans. His July inauguration made front-page news in Western capitals when he used it to announce that Peru would spend no more than 10% of its export earnings for interest and principal payments on its $14 billion foreign debt. Said he, with a typical rhetorical flourish: "President Alan García, may the world hear me, knows that Peru has a first great creditor--its own people."

With his bold declaration, the young leader had spawned a new idea: that he and other Latin American leaders had a right to limit the sacrifices of their countrymen. And while bankers have been relieved that no other South American country has yet adopted Peru's guideline, several have followed García's lead by stiffening their resolve not to let their debt problems further damage either their national pride or their fragile domestic economies.

If proof was needed that Latin America's $360 billion debt burden is a time bomb with unpredictable implications, politically as well as economically, it came last week in Argentina, where a visit by retired Chase Manhattan Bank Chairman David Rockefeller touched off the most serious street violence since the country's return to democracy more than two years ago. Rockefeller, whose former employer remains a major Argentine creditor, was in Buenos Aires to discuss Latin American economic development. Seven people were injured and 81 arrested when 1,500 leftist demonstrators hurled rocks and eggs, smashed windows and set fires to protest what one group called "our dependence on North American imperialism." The continent's debt was also on the agenda last week in Washington, where Ronald Reagan praised visiting Ecuadoran President León Febres Cordero for his handling of the problem, calling him "an articulate champion of free enterprise."