PERU CONSIDERS ISSUING BONDS TO FINANCE WAR ON DRUGS

Lima, Mar 29 (EFE).- Peru is studying the possibility of issuing special
sovereign bonds in the international markets to finance the war on drugs,
according to presidential drug enforcement adviser Ricardo Vega Llona.

In statements published Friday in the daily La Republica, Llona said Peru
urgently needs at least $1.2 billion to carry out development programs
promoting alternative crops to replace coca leaf, the raw material of cocaine.

Outlining the scope of the initiative, he said the funds raised through
sale of the bonds "would be used for a specific program through a
trusteeship held by a major institution such as the World Bank, the
Inter-American Development Bank or the Andean Development Corp."

The idea of issuing drug-fighting bonds has already been raised with U.S.
and European authorities, who have shown themselves willing to discuss the
matter in depth, according to Llona.

"We should sit down and find mechanisms to raise money, since we could talk
about grants or other alternatives," he added, recounting his approach in
talks with U.S. and European officials.

As for the foreign aid Peru is currently receiving to fight illegal drug
traffic, Llona said that "without blaming any cooperating country, Peru
needs a lot more money than it receives to invest (in alternative
development) in coca-producing areas."

More than $2 billion will be needed for such programs over the next four
years, Llona said, adding, "but $1.2 billion is urgently needed right now."