Peru: Postponed Problem

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Formidable Dollars. If there is not, by a deadline that is now set at Aug. 6 (at which time the Ministry of Energy and Mines must have acted on the IPC appeal), the U.S. may go ahead and invoke the amendment. At the present time, though, the Yanqui dollar has begun to look like a more formidable weapon. U.S. banks normally underpin Peruvian industry and trade with about $150 million in loans; these funds have been reduced sharply since the expropriation arguments began. Another potential $700 million in U.S. private investment in Peru, mostly in copper mining, is being held up until the issue is settled. Advisers have rightly warned Velasco that such losses are more detrimental to Peru's economy than the withdrawal of U.S. aid. However, as one puts it: "Getting Velasco interested in the economy is like getting a Buddhist monk interested in water-skiing." Conversations on the problem—Peru refuses to term them negotiations—resume shortly in Washington. Before long, the Administration firmly hopes, the monk will develop a yen to waterski.