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Last Updated: 02/01/2006
Fresh Ideas for Peru
Rafael Velásquez

Dr. Francisco Sagasti is President of FORO Nacional/Internacional, an institution that promotes dialogue, debate and consensus on critical development issues, and Director of its Agenda: PERU program on development strategies and democratic governance. He is also visiting professor at the University for Peace, which is associated with the United Nations, and served as advisor to its Rector.

Rafael Velásquez approached Dr. Sagasti in Peru and covered a wide range of subjects in this interview to a long-time contributor of the UPEACE family.


Q. Of the more than 20 books under your name is there a particular one you hold closer to you or that you think does a better job reflecting your vision?

SAGASTI - Among the books I have published, The Future of Development Financing: Challenges and Strategic Choices, written with K. Bezanson and F. Prada and published this year, provides a good summary of my views on international development; Knowledge and Innovation for Development: The Sisyphus Challenge of the 21st Century, published in 2004, reflects best my point of view on science and technology policies; Development Strategies for the 21st Century: The Case of Peru, completed in late 2000 presents my ideas on how to promote development; and my paper “The Twilight of the Baconian Age and the Future of Humanity”, together with a supporting monograph, describes my ideas on the fundamental transformations we are experiencing at present.

Q. In your book Imaginemos un Peru Mejor you invite the reader to use his/hers imagination in order to reach development. Yet, the latest UNDP Human Development Report finds that the gap between the rich and the poor in Peru has actually increased in the last number of years. What has gone wrong? Is there a specific part of Agenda: PERÚ that you think has been ignored?

SAGASTI - The problem we face in Peru is not a lack of ideas. Our work in Agenda: PERÚ synthesized a huge amount of material and made many sensible proposals, and there are also many other efforts that point in the same direction. However, Peru is now an ‘overstudied’ and ‘undermanaged’ country, and the main problem has been the failure of our political elites to do what has long been obviously necessary (e.g. tax reform, improvement of public finances, provision of basic social services, reduction of gross inequalities, and so on). Without renewing politics no amount of rigorous studies and well-thought proposals will make any difference to most Peruvians.

Q. What do you mean by 'The Emerging Fractured Global Order'?

SAGASTI - This is a paradoxical world order that has been emerging for some time and has now come in full view. It puts all of us around the globe in contact with each other and forces us to acknowledge our growing interconnections, but at the same time it creates deep and growing fractures between peoples and countries. We have to learn to live in a global order that is riddled with fractures and divisions, and which both pulls us together and pulls us apart at the same time. I coined the phrase in 1989 and wrote a book on the subject a decade later (Development Cooperation in a Fractured Global Order: An Arduous Transition).

Q. The Secretary-General of the Andean Community of Nations, Allan Wagner Tizón, expressed confidence on the idea that greater regional integration could address the inability of the market to tackle the structural inequalities that have been increasing in the last decades. Do you agree?

SAGASTI - Regional integration is an instrument for development for the Andean countries. Greater openness in trade, investment, finance, technology and other related issues among countries with roughly the same level of development could help considerably in overcoming the limitations posed by relatively small national markets, and also pave the way for better participation in world markets. Dr Wagner expresses an aspiration we all share when he points out that regional integration could help overcome some of the structural difficulties of the Andean countries to achieve development. However, the political climate now prevailing in the region is likely to make integration a rather difficult proposition.

Q. How seriously can we take Corporate Social Responsibility endeavours in developing nations struggling to stay competitive in today’s global market?

SAGASTI - I think we should take them seriously. Business has a role to play in development that transcends profit making (still the main responsibility of business, for they must first be successful in order to play other roles!). In addition to being good corporate citizens, corporations should explore new ways of cooperating with public institutions and civil society organizations, so as to help create an appropriate environment for people to improve their living standards. In particular, there is a host of environmental, community development, social service provision and entrepreneurial initiatives in which business can contribute significantly to development.


Q. You were Chief of the Strategic Planning Division of the World Bank in the late 1980s. How involved where you with the infamous Structural Adjustment Loans?

SAGASTI - My division did not have direct responsibility for lending operations. However, we charted possible paths for the evolution of the institution and some of these envisaged restructuring lending operations, including Structural Adjustment Loans. However, in principle, and provided they were well designed and agreed with borrowing countries (which unfortunately did not happen often) such loans could help in smoothing the transition towards more sensible macroeconomic policies. As usual, the devil was in the details, and I had several discussions and run-ins with colleagues who were in charge of such loans. In particular, I remember our criticisms of rather misguided efforts to show that structural adjustment was working well in Africa, which involved quite a lot of statistical contortions to prove what was not the case.

Q. Is it fair to be as critical of these Structural Adjustment Policies as it has become the rule?

SAGASTI - As a whole, I would say no. Criticisms have to be more nuanced, something that opponents of structural adjustment seldom are. A similar situation obtains with the (in)famous ‘Washington Consensus’, which when you look at it carefully, out of its ten injunctions at least five are incontrovertible common sense policy recommendations that should be followed by every developing country government. Other three are debatable and two may be rejected. But hurling the epithet ‘neoliberal’ to disqualify those who advocate such policies smacks to me of intellectual laziness and even dishonesty.

Q. Tell me about your role as Senior Advisor for Programme on Development, Peace and Security at UPEACE?

SAGASTI - I was approached by Maurice Strong, the Chairman of the UPEACE Council, when the decision was taken by the UN Secretary General to revitalize UPEACE. For three years I advised Martin Lees, the Rector, on a variety of issues related to development, peace and security and to the idea of promoting policy-oriented research at the university. Unfortunately, several of the recommendations I made could not be put in practice in a resource constrained setting and I left my advisory position to become visiting professor.

Q. What was the motivation, the reason behind the programme Agenda: PERÚ

SAGASTI - When my colleague Max Hernández and I decided to launch this program in the late 1980s, the idea was to create spaces where dialogue could be started and consensus reached on critical issues for Peruvian development. At that time we had an incredible political polarization between President Alan García and challenger Mario Vargas Llosa, against a background of terrorism and rampant hyperinflation. This did not leave any space for sensible discussion of key issues and we thought that Agenda: PERÚ could help in this regard. When the program began in January 1993 the situation had changed, but the polarization, this time for and against President Alberto Fujimori and his self-inflicted coup, still continued unabated. We thought it was necessary to show that dialogue and consensus are possible, that democracy and development go hand in hand, and that institutional reforms to promote democracy were essential for our country. More than a decade later, I think we achieved a good measure of what we set out to do.


Q. What holds the future for you, are you looking at entering “political life”?

SAGASTI - I have completed three of the main books I intend to write and I plan to devote a good part of my time to write two or three others during the next few years. One of them focuses on the role of knowledge in development, and particularly on what I have called ‘the twilight of Bacon’s age’ to indicate that we are entering a new era in the evolution of humanity. Another takes these ideas and applies them to Latin America and a third one, which is well under way, deals with the relations between development and peace. I will also try my hand at writing fiction and at producing television documentaries.

At the same time, I have decided to participate actively in politics and am a full member of a new political party in Peru, the Party for Social Democracy (PDS). While I do not intend to run for office, at least not for a few years, I am actively involved in party matters and —against the odds for such a new party— hope we shall do well in the April 2006 elections.

Q. What do you think are the greatest areas of concern for Peru in the future?

SAGASTI - The main problem is the dismal failure of the political elites. This is not new, and was highlighted more than five decades ago by Peruvian historian Jorge Basadre. However, unless we renew the political class and change the way of doing politics, very little is going to change in my country. This is one of the reasons why I have decided to enter into politics.

Q. Thank you for your time.

SAGASTI - Thank you.

Rafael Velásquez holds a MA International Peace Studies from the United Nations-mandated University for Peace. After a year supporting UN-related disarmament endeavors in Latin America and the Caribbean he currently works in the area of capacity building on conflict prevention, management and resolution in South Africa.