TEXT OF PRESIDENT BUSH AND PERUVIAN PRESIDENT ALEJANDRO TOLEDO NEWS CONFERENCE

The Text Of A News Conference Saturday With President Bush And Peruvian
President Alejandro Toledo In Lima, Peru:

(Inaudible) ... of the United States of America, my good friend George
Bush, Mr. secretary of State, members of the delegation of the United
States accompanying President Bush, this (inaudible) representing a country
with which we have had an historical relationship.

It is not a merely diplomatic visit, it is an official working visit. And
we have touched on substantive issues which range from the open struggle
against poverty, a war without border against terrorism and drug
trafficking - I repeat, a war with no ambiguities whatsoever against
terrorism and drug trafficking. We've touched on issues of trade,
education, even the Peace Corps.

But my friend, George Bush, this Peru is a country that welcomes you with
open arms. We are renewing our friendship, and this is the beginning of a
new era in the relationship between Peru and the United States. And I'm
extremely happy that the two of us are able to begin this relationship.

I know you seem younger than I am, but we are both 55 years old. And we
have a long way ahead of us to work together.

I know that we both have the energy and the stubbornness, particularly with
regard to the issue of terrorism and drug trafficking, because your
country, just like mine, loves peace. It appreciates life, and we are
united on this. And as of today, we have a strategic alliance of hope for
the future. My friend, welcome to my country.

BUSH: Gracias, Senor Presidente. It's an honor for me to be the first
sitting president of the United States to visit Peru. I want to thank you
for the invitation. It's a greater honor for Laura and me to come here as
guests of a leader who symbolizes Peru's revitalization.

President Toledo and I have now met three times. At each meeting, I have
been impressed by his commitment to democracy and his determination to
improve the lives of the people of Peru.

Peru is on the path toward greater freedom and greater prosperity, and
America will be the partner in this progress, Mr. President.

Earlier today our two governments signed an agreement that will reintroduce
the Peace Corps to Peru after an absence of nearly 30 years. The first
volunteers will arrive in August, a symbol of the stronger ties between our
people and the stronger relationship between our nations.

This relationship is based on common values and common interests. Our
nations understand that political and economic progress depends on
security. And that security is impossible in a world with terrorists.

Peruvians have been reminded again this week of the terrible human toil of
terror. On behalf of the people of the United States, I express our deep
sympathy for the victims of the recent bombing and our deep sympathy for
their loved ones.

President Toledo and I share a common perspective on terrorism: We must
stop it. Since September the 11th, Peru has taken the lead in rallying our
hemisphere to take strong action against this common threat, and I want to
thank the president for his leadership and his strong support.

Our nations understand that freedom is only as strong as the institutions
protecting it. The United States is actively supporting the president's
efforts to strengthen Peru's democratic foundations. And we will continue
to support the work of Peru's Truth and Reconciliation Commission, which is
helping correct the abuses of the past and set the course for a better future.

President Toledo and I both understand the importance of providing economic
opportunity to all our citizens as a hopeful alternative to the drug trade.
We discussed ways to make the assistance that the United States provides
under the Andean Regional Initiative more effective.

And I emphasized to the president my commitment to renew and extend the
Andean Trade Preferences Act. The United States House of Representatives
has moved this legislation. It is stuck in the Senate, and I urge the
Senate to act.

President Toledo and I have agreed to renew discussions on a bilateral
investment treaty, and to complete a debt-for-nature agreement to help Peru
produce debt payments while it protects its biodiversity.

I also informed the president that Secretary of Commerce Don Evans will
lead a trade mission to Peru and the Andean region later this year. By
building these ties of commerce, both our nations can create more jobs,
more investments and more benefits for workers and consumers.

President Toledo and I believe that education is the key to participation
in the global economy. The president's own path in life is a lesson in how
education opens up doors for opportunity. He is passionate on the subject.
I love his passion, and I appreciate his commitment.

And I'm pleased to announce that our country will help establish an Andean
Center of Excellence for Teacher Training with a base here in Peru. The
center will support President Toledo's goal of quality schools, with
quality teachers that give more Peruvians the literacy and learning they
need to succeed.

I've also directed U.S. Commerce Department and the U.S. Trade and
Development Agency to establish an Andean e-business fellowship program, to
give more high-tech professionals from this region the chance to learn more
about information technology.

President Toledo and I have a strong relationship. I am inspired by his
life. I am inspired by his story. I am inspired by his leadership. I am
impressed by Peru's progress, and I am very confident of Peru's future.
Thank you, sir.

QUESTION: Given the increasing evidence that the FARC is now operating in
Peru, will you be willing to provide President Toledo extra assistance in
fighting the war against terrorism here, should he ask for it?

And are you concerned that what was once a regional problem in Colombia, or
something restricted to Colombia, is now spreading across Colombia's
borders and threatening its neighbors?

BUSH: We discussed the neighborhood at length today. President Toledo told
me that he is - now he has done a very good job, or the country has done a
good job, of making sure that relations with neighbors north and south are
peaceful, that he is moving troops and making decisions to prevent
terrorists from coming into this country from Colombia, and we will help
him in this effort. That's part of the reason why I am here is to support
our mutual desire to fight terror and to help this good democracy thrive.
Later on today, we'll be talking with presidents, and one vice president,
from the Andean nations. And we'll be discussing our common desire to
prevent terrorist groups like the FARC from holding people in nations hostage.

And I'm absolutely convinced, having talked to the president three times,
that he will do everything in his power to rout out terror, not let it take
hold, and preserve the institutions that make Peru a beacon for democracy.

TOLEDO: No, the evidence that we have is - I repeat, the evidence that we
have indicates that there is no transfer of the FARC into Peru. However, we
are adopting every measure possible.

The minister of defense visited the border very recently. We took our bases
that were along the border with Ecuador where, after signing the peace
agreement, there is no need for their presence. We removed them as a
precautionary measure over to the border with Colombia. As President Bush
just indicated, this is a joint task. What happens to Colombia affects us,
and vice versa.

I want to be very open. And I apologize to my friend President Bush now. We
are not fighting against drug trafficking in order to satisfy the United
States or Europe. Drug trafficking, in partnership with terrorism, is an
issue of national security. It's an issue of national security.

On Wednesday, they killed nine people, nine of our brothers and sisters.
And there were 30 people wounded.

I have publicly stated, and I want to repeat this, we are not going to let
this stand.

So let me respond to you. We have made a substantial reduction. We still
have 34,000 hectares to go. But we are going to do this together.

Final point, I think President Bush is extremely sincere. He is extremely
sincere and honest when he recognizes that as long as there is a demand out
there, there will be a supply. As long as there are consumers, there will
be producers.

And so together, we need to work on reducing the number of consumers, cure
them better, make them better. And we need to reduce the amount of hectares
under cultivation.

And footnote here, it's also true that the statistics indicate that,
although levels are still low, there is an increase in the consumption of
cocaine among youth in Peru. And that is also part of our concern with
regard to national security.

QUESTION: President Bush, you are in a region now that's been devastated by
terrorism and subversion and drug trafficking for over three decades. You
are offering us the Peace Corps. I would ask you if you're willing, as
president of the most powerful nation on earth, to lead a Marshall Plan for
South America?

BUSH: I appreciate that. I think I said more than just the Peace Corps, if
I'm not mistaken, in my opening comments. Obviously, our nation is
committed to this part of the world. I have come to Peru as the first sitting

president to express our solidarity with Peru and the people, as well as
expressed my appreciation for a reformer who got elected who's willing to
defend the institutions that make democracy go.

I'll repeat, if you'd like me to, go through the litany of things I just
said: the Andean Trade Preference Act, bilateral action on investment,
money for education, money to fight drugs. We've tripled the amount of
money, I believe it was $50 million up to $195 million, available.

And so, I think our commitment is - I think our commitment speaks for
itself. And I appreciate so very much the chance to come and explain it to
the Peruvian people, that ours is more than just words. Ours is deeds and
action.

QUESTION: Good afternoon, President Bush. Buenos tardes, Senor Presidente.

President Bush, many lawmakers in Congress are growing increasingly
concerned about your policy in the Middle East, wondering if the very talk
of potential high-level negotiations, involving Vice President Cheney
specifically with the Palestinian leader Yasser Arafat might not, in fact,
send a signal that terrorism against Israeli civilians can achieve some
limited political aims.

I'd like to ask you, sir, why you're contemplating that, and why those who
wonder if that is not the case are incorrect?

BUSH: Well, first of all, I think there has been no question that the
United States has stood strong with Israel. And we have made it very clear
to Mr. Arafat that he is not doing all he can do to fight off terror. I
can't be any more clear than that.

Vice President Cheney said, depending upon the Zinni mission and General
Zinni's recommendation, he might go back if and when Arafat performs.
Surely those in the Congress you talk about appreciate the fact that the
administration is engaged and sent General Zinni into the region. We laid
out the Tenet plan, which is a way to bring some security to the region,
which will then lead to the Mitchell plan. And we're doing everything in
our power to get the parties into Tenet, and we will continue working hard
to get them to Tenet.

QUESTION: Even if the violence continues and (inaudible)

BUSH: If and when Mr. Arafat.

BUSH: If and when Chairman ... Excuse me. If and when Chairman Arafat
performs, that's what we have said.

General Zinni went to the Middle East. He is leading discussions. But
people shouldn't mistake our desire to get into Tenet as anything more than
a desire to get to peace. And we'll continue working to do so.

And Prime Minister Sharon knows where the United States stands. We're
strong allies with Israel. We have been ever since I've been the president,
and we'll continue to be strong allies with Israel.

QUESTION: Good afternoon to both presidents.

President Bush, just a few days ago I was able to ask you in Washington
about leadership in the fight against poverty. And on this, aside from the
issue of being 55 and the fact that you are wearing the same color of ties,
you are in agreement with President Alejandro Toledo who also insists on
fighting against poverty.

But the fight against poverty presupposes, and this has been stated by Dr.
Toledo, thinking of reducing arms in Latin America, because for every tank
or F-16, we could buy a lot more schools.

Mr. President, I'd like to know your views on this and the views of
President Toledo with regard to this issue, the possibility of arms control
in the South American part of the hemisphere. And the same question for
President Toledo.

BUSH: We may be the same age, but el tiene pelo negro. Yo tengo pelo gris.

I appreciate President Toledo's work to have a security arrangement in
place in the neighborhood amongst the countries bordering Peru, that will
then allow him to reinvest in education. We talked about that. And I think
that is a strong commitment and a wise commitment.

As far as my country's commitment goes, I gave a speech in Monterrey,
Mexico, two days ago where I committed our country to a 50 percent increase
in development aid. But I said it's time for the world to stop looking at
inputs and to focus on outputs.

And that the United States and developed nations must do more financially,
and we're leading the way. But we expect other nations to develop the
habits that will lead to a better opportunity for their people - rule of
law, focus on education and good health care.

President Toledo understands that. He's been a leader in that effort. And I
think what I said in Monterrey was very important, that unless we all focus
on how programs benefit people directly, no matter what the efforts or
strategy is, it's likely to lead to failure.

But programs and policies that understand the worth of each human being,
that each individual matters, are those programs which will be successful.
And so, our country will try to foster that. And this president has made
that commitment, for which I have grateful.

TOLEDO: Aside from the fact that President Bush has very good taste with
regard to color in ties, he's also taller than I am.

On this issue of military expenditure, we discussed it with him. And here,
I want to strike a difference between military expenses for armed conflicts
between countries and military expenditures for defense against terrorism
and drug trafficking. Because these are two separate issues. I think that
there is a major challenge in the world in order to survive in this
globalized and savagely competitive world we live in. We need to invest
more in the minds of our people. Basically, what this means is investing
more in nutrition, health, education, and justice for the poor.

We won't be able to deal with the challenges of this globalized world,
unless we invest in the knowledge of our societies. And the question
immediately arises, and obviously so, in an economy that is growing and
overcoming recession, where do you get the money to invest in nutrition,
health, and education?

Well, we've made an appeal to countries at the bilateral level, and there
the United States has played a very generous role at the donor's table in
Madrid.

And I want to publicly express my appreciation, Mr. President. There has
been debt conversion, external bilateral debt swap for social investment.
And there, we have been able to get a commitment of about $1 billion. This
is one way to establish a financial space to invest in health, nutrition,
and education.

The other thing is that I believe that it makes no sense in this world, as
long as we have a country with 54 percent of Peruvians who live below the
poverty line, or 16 percent who live below the dire poverty line - when I
was born, the very first minute of my life, when I opened my eyes, I saw
the face of dire poverty. I know what this means.

That's why I am convinced that we can make an effort to reduce military
spending, to reorient those resources toward investment and justice and
education and health. Because the defense of a country no longer depends on
how many tanks or ships or aircraft we have. It's all about how strong our
economy is, how educated our people are.

And please, excuse me for being so passionate on this subject, but there is
absolutely no doubt on this. And the empirical evidence is very harsh with
regard to the return on investment on education and health and nutrition
for our people.

And here, once again, we have another point of coincidence that leads us
down the same path together.

I conveyed something that's very close to my heart with regard to the
(inaudible) education program, and I asked our friend to support us on
this. And I will be going to New York, and I'm going to talk to Mr. Bill
Gates to try to promote the (inaudible) project even more.

But if we reduce military spending, we're going to have some financial
leeway to reorient this money toward the poor who want to overcome poverty,
who want freedom. And we will be able to deal with the challenges of the
future even better.

Ladies and gentlemen, thank you very much.