Peru's Garcia Cuts Salaries, Including Own

Peru's President Alan Garcia, holds up a Holy Bible to the crowd after an event of Peruvian evangelical churches in Lima, Peru on Sunday, July 30, 2006. (AP Photo/Karel Navarro) (Karel Navarro - AP)

LIMA, Peru -- President Alan Garcia cut government salaries, including his own, on Monday, three days after announcing a long list of austerity measures in his inaugural address. Garcia, whose 1985-1990 government was plagued by mismanagement and corruption that left Peru nearly bankrupt, blasted outgoing President Alejandro Toledo for spending lavishly while failing to help Peru's poor.

More than half of Peruvians survive on less than $2 a day.

In a decree published in the official newspaper El Peruano, Garcia reduced his monthly paycheck to just over $5,000 _ a 60 percent cut. Lawmakers saw their salaries reduced by nearly 40 percent to about the same level.

The decree also lowered wages for regional presidents, mayors, municipal councilors and their deputies.

Garcia said an emergency decree would be issued in the coming days to implement the pay cuts immediately instead of in January, saving the country $16.2 million by year's end.

Jorge del Castillo, Garcia's Cabinet chief, said the new government also would impose sanctions on public officials who exceed their budgets.

"This proposal was made by Finance Minister Luis Carranza so that we can have a law of fiscal responsibility and transparency that can contain any excesses in government spending," Del Castillo told Radioprogramas radio.