Although economic conditions have improved over the last five years, there is still extensive poverty inPeru. (1)
Peru has a free market economy. Political Conditions: State of Democracy in Peru

Basic elements of a democracy include effective and independent legislative and judicial branches ofgovernment, freedomof expression, respect for human rights, and free elections. That controversy,combinedwith the revelation of high-level corruption in his administration led Fujimori first to agree to new presidentialelections inwhich he would not run, and then to flee to Japan and resign in November 2000. Under the constitution's rules of succession, the president of the Congress, Valentin Paniagua, became Peru's newpresident. The immediate challenge facing the interim government was to organize the extraordinary elections, heldonApril 8, 2001, with a presidential run-off held on June 3. The Toledo administration faces the more long-termchallenge ofmaintaining stability in Peru while trying to strengthen democratic institutions weakened by 10 years of ademocraticallyelected, but autocratically run, government. Erosion of Democratic Institutions under Fujimori. He did much to bring undercontroldestabilizing factors such as terrorism, drug trafficking, hyperinflation, and border disputes. But Fujimori also ledthecountry into several constitutional crises. Elections of 2000. The Paniagua government committeditself to holding presidential and parliamentary elections as scheduled, on April 8, 2001. Stabilizing the Economy. Voting is mandatory in Peru. U. S. Relations with Peru

The United States and Peru enjoyed generally friendly relations over the past decade, although the recurringpolitical crisesof the Fujimori government strained those relations. (7)
The primary U.S. interest in Peru over the past decade has been the reduction of illicit narcotics production and trafficking. The United States pressed the Fujimori government forimprovement in respect for human rights; for much of Fujimori's term his regime had one of the worst human rightsrecordin the hemisphere, according to State Department and other human rights reports. U.S. The United States has been concerned about security in Peruand in the Andean region as a whole. His enhancement of national security came at the cost of high levelsof humanrights violations, however, and his administration had one of the worst human rights records in the hemisphere. (14)

	Congressional Concerns Regarding Peru

Congress has expressed concern about the development of democratic institutions in Peru, and has conditionedaid on therespect for those institutions, respect for human rights, and the holding of free and fair elections. Congress has alsoexpressed concern about counter-narcotics assistance, including whether to resume an air drug-interdiction programsuspended after the accidental shootdown of an American missionary plane, and the relationship between U.S.agencies andPeru's former intelligence chief, Vladimiro Montesinos. Members have also expressed concern regarding the case of Lori Berenson, an American prisoner in Peru.
Peru survived constitutional and political crises in 1999 and 2000 and now faces the challenges of further strengtheningdemocratic institutions and stimulating the economy. President Alejandro Toledo assumed office on July 28, 2001. Hewon extraordinary elections that had to be organized following the sudden resignation in November 2000 ofPresidentAlberto Fujimori in the wake of electoral, human rights, and corruption scandals.
President Fujimori headed Peru from 1990 to 2000. During that time he did much to bring under control destabilizingfactors such as terrorism, drug trafficking, hyperinflation, and border disputes. But Fujimori also led the countryintoconstitutional crises, and his efforts to remain in power eroded democratic institutions. Allegations of electoralfraud andan eruption of scandals involving his top aide led to his sudden resignation, after which constitutional successionpassed thepresidency to the President of the Congress, Valentin Paniagua, in November 2000.
The immediate challenge facing the interim government was to organize new presidential and parliamentary elections. First and second round elections on April 8 and June 3 were widely praised as being free and fair, and AlejandroToledowas elected President. The Toledo administration faces the more long-term challenge of maintaining stability whiletryingto strengthen democratic institutions weakened by 10 years of a democratically elected, but autocratically run,government.
Peru is located along the Andean mountains of South America. Although economic conditions have improved over the lastfive years, there is still extensive poverty in Peru. Peru has a free market economy.
The United States and Peru have enjoyed generally friendly relations over the past decade, although the recurring politicalcrises of the Fujimori government strained those relations. The primary U.S. interest in Peru has been the reductionofillicit narcotics production and trafficking. Other stated goals of U.S. assistance are: broader citizen participationand moreresponsive government; increased incomes for Peru's poor; improved health of high risk populations; and improvedenvironmental conditions. The United States pressed the Fujimori government to improve respect for human rights;formuch of his term Fujimori's regime had one of the worst human rights record in the hemisphere. Both the interimand theToledo governments have taken steps to improve respect for human rights. The United States has been concernedaboutsecurity in Peru and in the Andean region as a whole.
The U.S. Congress has expressed concern about the development of democratic institutions in Peru, and has conditionedaid on the respect for those institutions, and for human rights, and the holding of free and fair elections. Congresshas alsoexpressed concern about the case of Lori Berenson, an American prisoner in Peru; the relationship between U.S.agenciesand Peru's spy chief, Vladimiro Montesinos; and whether to resume a joint aerial drug-interdiction program that wassuspended after the accidental shooting of an American missionary plane.