Peru produces about 60 percent of the world's coca crop, primarily in the Upper Huallaga Valley, and several major drug trafficking groups profit from this crop. A principal objective of the U.S. Andean Drug Stragtegy in Peru is to improve the effectiveness of Peru's counterdrug operations by providing military and law enforcement aid in the form of equipment, vehicles, training, technical assistance, and money. Although Peru refused about $45 million in U.S. assistance for fiscal year 1990, the Peruvian government accepted $114 million in fiscal year 1991, for fiscal year 1992, the U.S. Government requested $150 million in counterdrug aid for Peru ($40 million in military, $19 million in law enforcement, and $100 million in economic aid). The GAO review determined that Peru's government has not created a climate conducive to effective antidrug operations. Specific obstacles to progress include Peru's inability to maintain effective government control over military and police units involved in counterdrug operations, a lack of coordination between military and police personnel, failure to control airports, political instability caused by insurgents, extensive corruption, widespread human rights abuses, and the effects of an economy heavily dependent on coca leaf production. The GAO review also determined that the United States faces problems in managing its assistance to Peru. The executive branch has not established the management oversight needed to execute large counterdrug programs. No reliable criteria have been established to measure Peru's progress in meeting U.S. counterdrug objectives, and the U.S. Embassy in Lima lacks and end-use monitoring system for military aid to be provided by the United States. 1 figure