PERU: Italy forgives Peru $72 million of debt to fund various development projects in the impoverished Andean nation

Italy has forgiven Peru $72 million in debt in exchange for investment into development projects working to alleviate poverty in the impoverished Andean nation over the next five years. The agreement will fund a diverse range of social and construction projects in the poorest areas of Peru, including in the country's capital Lima. Italy's Foreign Minister Massimo D'Alema met with his Peruvian counterpart Jose Garcia Belaunde in Peru's capital of Lima on Thursday (January 04) to sign the accord. Peru has seen five years of strong economic growth, but 48 percent of the population still lives in poverty. Italy is the fourth-biggest investor in the country after Spain, the United States and Chile - last putting $1 million into the country. Peruvian President Alan Garcia also met with D'Alema to thank Italy for the move, which adds to the $116 million of debt forgiven by Rome in 2001. "Italy has already allowed $121 million of debt we owed to Italy to be invested into Ayacucho, Apurimac, Huancavelica and the poorest regions of our country. This project has now been amplified by $72 million, thanks to the presence of minister D'Alema," Garcia said. Peru is D'Alema last stop on his South America diplomatic tour, in which he also attended the inauguration of Brazilian President Luis Inazio Lula de Silva and held meetings with Chilean President Michelle Bachelet. D'Alema indicated that the tour was "very positive" and indicated Italy is looking to extend relations throughout Latin America. "We feel that we have a responsibility…because we have more than 50 million Italian children and grandchildren in this part of the world. We support business commerce between the European community and the Andean community," D'Alema said. Italy has also recently signed a debt exchange agreement with Ecuador and struck a debt cancellation deal with Bolivia.

ITN Source | January 5, 2007

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