The decision had to be made by the officials of the bank regarding proceeding with the deal as it gave a rare chance to address a variety of longstanding ills-including limited access to the justice system, a crumbling infrastructure, and insufficient training of prosecutors and judges. But three months after the deal had been signed, Peru's Congress-dominated by members faithful to the President-passed a measure which led Bank officials to question the good faith of the authorities.
The Council's members resigned and, by six months, the Bank postponed the effective date of the judicial reform loan in response -blocking any disbursement of funds. But in the days following the statement, Peru's authorities put increasing pressure on the Bank to alter its mind-and finally summoned the Bank's country manager for Peru to a personal meeting with President Fujimori. The state manager would have to decide whether to stick with the loan postponement-and, more broadly, take stock of what was really going on in Peru. Would the loan help a government truly embarked on reform? Or might it just abet a government bent on subverting the judiciary to further its own political goals? HKS Instance Number 1779.0
PUBLICATION DATE: December 01, 2004 PRODUCT #: HKS574-HCB-ENG
This is just an excerpt. This case is about GLOBAL BUSINESS
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