On Jan. 24, Dr. Alejandro Toledo, former president of Peru, delivered the first of his three scheduled Payne Distinguished Lectures at FSI Stanford. His talk, entitled “Can the Poor Afford Democracy? A Presidential Perspective,” analyzed the relationship between democratic reform, economic growth, and poverty, inequality, and social exclusion in Latin America.

Toledo was democratically elected president of Peru in 2001 and served a five-year term, leaving office with a strong record on governance and economic growth. He achieved 6% average annual growth, increased foreign direct investment by 50%, balanced the budget, and brought 25% of the population above the poverty line. Since his presidential term ended in July 2006, Toledo has founded the Global Center for Development and Democracy, which “promotes sustainable democracies and economic self-sufficiency in developing countries by building a better understanding of poverty, social inequality, and historical imbalances in disadvantaged regions, and by crafting and implementing practical solutions to promote the well-being of individuals, particularly women, in economically disenfranchised communities throughout the world.”

In his Jan. 24 Payne lecture, Toledo interwove first-hand observations with quantitative research to support his argument that a reduction in poverty and inequality does not necessarily follow economic growth. While he has “cautious optimism” that Latin America is poised to “make a substantial jump and take a prominent place in the world economy in the next 15-20 years,” he said that only an ambitious social agenda to reduce poverty and inequality will stimulate economic growth, strengthen democratic institutions, and consolidate democratic governance in the region.

Forty percent of Latin Americans—230 million people—are trying to survive on less than $2 a day, and 110 million live on less than $1 a day. Toledo noted that income levels, however, do not reflect the “drama of poverty”—things like infant mortality, malnutrition, lack of access to healthcare and education, and ethnically based social exclusion. Impoverished populations see corruption, exclusion, and economic inequality and they begin to associate these things with democracy, and become impatient with it. Toledo called for leaders to have the courage to invest in human development through nutrition, education, and micro-finance programs and to make decisions that may not have short-term political benefits. “This is a moment for more leadership and less politics,” he said.

The first president of Peru of Indian descent, Toledo initiated a program called Juntos, or “Together,” a system of conditional, direct cash transfers to female heads of the poorest households. In return for obtaining pre- and post-natal checkups, vaccinating their children, and making sure their children went to school, the women received $30 per month to invest in their economic self-sufficiency. The short-term solution provided by Juntos was initially criticized by the IMF but has been so successful that it is now being evaluated as a policy option by both the IMF and the World Bank and has been continued by the current government.

Toledo is the Payne Distinguished Visiting Lecturer for the academic year 2007-08 and is affiliated with FSI’s Center on Democracy, Development and the Rule of Law (CDDRL). In addition to delivering several public lectures over the course of the year, Toledo will present seminars, interact with students who participate in FSI activities, and continue his work on poverty, growth, and the future of democracy in the developing world. The remaining two lectures in the series are scheduled for April 10 and May 14.

The Payne Lectureship is named for Frank E. Payne and Arthur W. Payne, brothers who gained an appreciation for global problems through their international business operations. This lecture series presents to the Stanford community distinguished speakers who are chosen for their international reputation as leaders, with an emphasis on visionary thinking; a broad grasp of a given field; and the capacity to clearly articulate an important perspective on the global community and its challenges. Previous Payne lecturers have included The Honorable Joschka Fischer, Dr. Mohamed ElBaradei, Sir David Manning, The Honorable Jorge Castaneda, and Dr. Sadaka Ogata, Dr. Josef Joffe, and The Honorable Bill Bradley.