FINANCE: Peru vs. the Dollar Dealers

Peru vs. the Dollar Dealers

Alan Garcia has never shied away from controversy. Two years ago, the Peruvian President stood up against international bankers and defiantly proclaimed that his country would limit payments on its $14.3 billion foreign debt to 10% of Peru's export earnings. Last week he dropped another economic bombshell. During a traditional Independence Day speech to the Congress, Garcia said that in order to halt the growing flight of capital from Peru -- an exodus depriving the country of much needed funds for investment -- he intends to nationalize all banks and insurance companies and shut down private currency- exchange houses. Furthermore, selling...