Mr. President,

Mr. Secretary-General,

Distinguished delegates, ladies and gentlemen,

Peru has no doubt that multilateralism is the best instrument to confront global challenges, as well as to guarantee peace and international security. For that reason, the United Nations is indispensable. All Member States must have the conviction to strengthen it, and the courage to reform it, in order to face the new agenda of international security; to emphasize the fight against poverty; to maintain the development agenda; to assure democracy and to fight decisively against drug trafficking and international terrorism.

Peru praises the strengthening of the role of the United Nations General Assembly as the highest guarantor of the coexistence of all its members, a role in which Peru firmly places its vows.

Terrorist attacks are taking place in different areas of the world, and the threats to peace in several regions create an international climate of instability and insecurity that calls for an urgent solution.

Peru strongly condemns the terrorist attack to the UN Headquarters in Baghdad and wishes to pay tribute to all the victims, in particular, to Sergio Vieira de Mello, Special Representative of the Secretary General.

We cannot accept violence as a political tool.

In our case, twenty years of violence, it is a hard lesson to cope with. According to the final report of the Truth and Reconciliation Commission, made public recently, thousands of lives were lost and more than US $ 20,000 million in losses were reported.

This report is the result of a resolute political decision of our Government to make sure that Peru no longer has to face irrational acts of terror.

Truth must also be a means to prevent impunity and to lead us to reconciliation with justice.

My government is firmly struggling against impunity.

For this reason, we consider that the fugitives that fled Peru, when the corrupted regime of the past decade was overthrown, should respond to justice for the gravity of the crimes they committed.

We insure these people a fair trial and all the guarantees of a due process, within the framework of the Inter-American Convention of Human Rights and Peruvian law.

This is the reason why we hope that our requests on extradition will be taken into account. Democratic States have the responsibility to avoid impunity.

In this regard, the Peruvian state wishes to express its appreciation to the 20 friendly countries that have expressed their decision to detain anyone in this extraditable list, if they enter their territories.

Mr. President,

Poverty, exclusion and fundamentalist ideologies are some of the causes for current crises.

The hopes of some of our countries to be part of an inclusive globalization are not occurring, despite some achievements.

As an example, in the case of Peru and despite this international environment, the economy grew by 5,2 % in 2002, one of the highest rates in Latin America.

Inflation was only 1,5 %, international reserves broke the barrier of US $ 10,000 million, and exports reached its highest point in many years with an amount of US $ 7,668 million.

However, those indicators are not enough when putting money into people's pockets is concerned.

Today, it is necessary that the global economy reach an annual GDP growth of 7 % to 8 %. That is the rate we require to reduce poverty and create sustained employment.

We have to do that as soon as possible. The poor cannot withstand 15 years of slow growth.

There is no doubt that there is a correlation between the health of the economy and social inclusion, and democratic governance.

World leaders cannot close their eyes: there is no possible governance without a reduction of poverty. Wall Street is not the same thing as Main Street.

Mr. President,

Last year, before this great Assembly, I highlighted the need to defend democracy of the market turbulence by creating innovative financial mechanisms.

We said that the time had come to build a new global consensus to reaffirm democracy and reevaluate development with social equity.

Since then, Peru has been working on a series of initiatives in this regard.

Last May, nineteen democracies of Latin America and the Caribbean, members of the Group of Rio, approved a key document that we call "The Cusco Consensus".

This document comprises the four Peruvian initiatives on innovative financial mechanisms.

These initiatives are:

1. The creation of a special regional trust, using part of the funds for servicing debt to the Paris Club, to promote private investment projects earmarked for the development of public infrastructure works.

2. The design of new debt instruments with counter-cyclic payment patterns, thereby making payments easier and reducing its costs.

3. The creation of regional investment authorities to support the initiative for the Regional Infrastructure Integration in South America (IIRSA), the Puebla-Panama Plan, and infrastructure projects in the Caribbean, and

4. The adoption of accounting practices that may allow adequate discrimination of investment expenditures from current spending, so as to prevent needless sacrifice of future growth and investment.

In relation to one of these proposals, last August, with the President of Brazil, Luiz Inacio Lula da Silva, we decided to work together on the materialization of the South American Infrastructure Authority project (ASI) that will operate as a fiduciary agency to facilitate the concretion of investment projects for the integration of South America.

I am sure that this experience can be replicated in other parts of the world.

Likewise, we have signed a Memorandum of Understanding on Economic and Physical Integration to execute the three axes of development and integration.

Being consistent with these projects, Peru signed an agreement for the creation of a free trade area with MERCOSUR.
Hence, from this international tribune, we reiterate that these efforts and achievements are positive steps in the construction of the South American Community of Nations.

However, I wish to stress that, besides the decision that two or more countries in the sub¬region may take, it will be essential that the international community takes a stand on these objectives and any others that may come out from collective reflection.

Mr. President,

Developing nations are worried that in many of our countries there is an alarming increase of external vulnerabilities, as a result of the instability of financial flows and their impact on investment levels and economic growth.

Trade protectionism, in particular in certain developed nations, is also perceived.

They cannot demand us tirelessly to keep on opening our markets while they protect their products with thousands of millions of subsidies every year.

Our countries cannot withstand this asymmetrical trade relationship. The time has come to build a two-way highway, which is freer, more predictable and transparent.

In this regard, Peru is concerned about the negative results of the recent Ministerial Conference of the WTO in Cancun. Although it has revealed some advances, it could not reach any consensus. In Peru, there is a great inclination on multilaterism and free trade. We trust that in the next months, some negotiations will be done so that the aims of the Doha Declaration, in which the development was the main theme of the agenda of the WTO, could be readopted and taken into reality.

Mr. President,

We have the obligation of building a safer, more just and more humane world.

That is why, I ask the United Nations and our great friend of peace, its Secretary General, impose his high authority and prestige, to promote a wide debate on the innovative financial mechanisms with the World Bank, the International Monetary Fund, the Inter¬American Bank, and the Group of Eight. This way we can include the excluded with more justice, education, infrastructure, and better health conditions.

Only this way, globalization can be inclusive and governance will be strengthened.

Thank you.