Peru

The vast Andes mountain range divides the coastal strip of western South America from the rest of the continent. The highlands of the western coast from Ecuador to Peru and Chile are populated mainly by Indians, whose way of life has changed little over the centuries. In complete contrast, in the cities on the coast, Santiago, Valparaiso and Lima, Western traditions and a twentieth-century way of life prevail.

The masses of Peru suffered during the course of the twentieth century from a kaleidoscopic variety of more or less oligarchic governments, none of which succeeded in bringing about the fundamental economic and social reforms the country needed. Despite opportunistic political parties proclaiming high ideas of reform, periods of government by Congress and presidency with a semblance of democracy were punctuated by spells of authoritarian rule. Peru was unable to develop its industries, oil extraction or mining from its own capital resources. Loans and foreign investment were encouraged in one decade, only to arouse a nationalist reaction against foreign dependency in another. The economy swung from expansion to bust, depending on world prices for the commodities Peru exported, and later in the century the crushing foreign debt added to its burden. But the pattern of Peru’s economic development did not fundamentally differ from that of its neighbours.

The effect of bad times on the poor was all the more catastrophic as the disparity in wealth between the top 7 per cent and the bottom 40 per cent was extreme, even in the 1990s. Almost all the Indian population, comprising about a third of the total, was wretchedly poor, the children malnourished. Alcoholism and ill health flourished and in the early 1990s cholera from polluted water supplies reappeared.

The splendid buildings in Lima dating from the Spanish colonial period present a bitter contrast to contemporary misery. A society deeply divided is bound to be a society in conflict. Those who ruled Peru variously tried reform and repression, sometimes both at the same time. The landless Indians in the highlands hungered after land reform, migration of Indians to Lima created unsanitary shanty suburbs, and local industries produced an urban working class. It was fertile territory for communism in the 1920s. One of Peru’s best-known political leaders, Victor Raul Haya de la Torre, responded with a socialist programme of anti-imperialism, state control, nationalisation and the protection of freedom and human rights. He founded in 1924 the Alianza Popular Revolu-cionaria Americana, APRA for short. APRA was still a political party in the 1990s and still had a strong following. It soon shed its Marxist intentions when it came to practical politics, since it could attain power and the presidency only with the support of the middle class. It never effectively tackled the Indian problem, which could not be solved without radical land reform.

In the 1960s Belaunde, of the Popular Action Party, was elected as a reforming president. But when the 300,000 Indian peasants rose in revolt in 1965, the army was sent in to crush them. The history of Peru does not always follow what is regarded as a Latin American pattern. The army staged a coup in October 1968 at the height of another economic slump. The junta was headed by General Juan Velasco Alvarado, a man with sympathy for the oppressed Indians and the poor (the Peruvian military has not always been a reactionary force). Alvarado declared that the junta would reform the ‘unjust social and economic order’ and end subordination to foreign economic interests. A revolution was attempted from above. The large coastal sugar estates were expropriated and turned into cooperatives. The landowners on the coast and in the highlands were destroyed as an elite with political power. About 40 per cent of land had been transferred by 1975. The three-quarters of a million squatters in the shanty towns were given rights to the land and a sense of community was encouraged. Worker co-ownership in factories and management was designed to establish ‘industrial communities’ in parallel to the rural communities. Foreign-owned companies, mainly American, were nationalised. General Velasco’s aim was to establish a distinctive Peruvian socialism.

The economic flaws soon made themselves felt. While some workers and Indians were helped, overall the reforms did not bring the full benefit that had been expected. Artificially low food prices, designed to help the urban poor, hit the peasantry. The world economic recession of the mid-1970s led to a fall in copper prices and those of other commodities at a time of heavy Peruvian indebtedness to foreign investors. The discredited military junta handed the country back to the civilian politicians.

In 1980 Belaunde was elected president again. He dismantled the kind of corporate state the junta had wanted to set up. Orthodox financial management, especially policies designed to reduce the foreign debt, inevitably resulted in hardship, unemployment and protest. There were many strikes in Lima. In the remote highlands opposition was being organised by a new guerrilla group, the Sendero Luminoso, known in the West as the Shining Path. Inspired by Maoist doctrines, the Shining Path was ruthless in waging war on the class enemies. Despite sweeps by the army, the insurgents retained their bases and plunged the country into bloody strife.

In 1985, Peru’s new hope for recovery was the election of the leader of the Alianza Popular Revolucionaria Americana (APRA), Alan Garcia. Young and dynamic he instituted an economic reform plan that attempted to promote Peruvian industry. He was no socialist, preferring to leave industry in private hands, and his refusal to pay all the interest due to foreign investors made him popular. Thus began a long tussle between foreign governments and banks, with the Latin American debtors no longer prepared to impoverish their people in order to honour their financial obligations. Initial American reactions were hostile especially as Garcia also took a stoutly independent line in foreign policy. By the 1990s, with the US now taking the lead, it was accepted that Latin America’s debt burden was too heavy, and that it was better for bankers to accept a reduction than repudiation and a breakdown in trade relations. By the time it came to elections again in 1990, the economy was in a dreadful state, crime and drugs were rampant and the Shining Path was carrying the bloody struggle from the interior to the shanty towns around Lima, murdering fifty mayors in the countryside, as well as missionaries, priests and peasants. In just one year, 1989, insurgents and the government death squads, between them, killed over 3,000 people. The people’s disillusionment with their politicians was vividly demonstrated during the contest for the presidency in June 1990 when the son of a Japanese immigrant Alberto Fujimoro, a university academic promising reform but virtually unknown before, won by a convincing majority.

Fujimoro was determined to crush the Shining Path. In return for protection of the coca growers and drug barons, the Shining Path was financed by the drug traffic. The president introduced emergency powers and the conflict was stepped up by both sides. Fujimoro also launched an economic austerity programme, at the same time liberalising the economy and denationalising state enterprises. The immediate result was huge unemployment. Backed by the military, Fujimoro seized dictatorial powers, dissolving Congress and arresting some of the political leaders.

Fujimoro claimed that he required executive powers to carry out his programme of deregulating the economy, cutting subsidies and privatising, as well as to fight the Shining Path more effectively. His first success was to capture the guerrilla group’s leader after an intelligence operation in a flat in Lima in September 1992. But that was not likely to end the struggle with the Shining Path or the drug growers and merchants. For the Indians the growing of coca leaves had become an essential part of their survival economy. Great hardship was suffered by the people of Peru, and economic reforms - if they succeeded - would take years to raise the low standards of living.

In 1995 Fujimoro was re-elected. Two years later he became a popular hero when he rescued hostages taken in the Japanese Embassy. He had taken personal charge of the military operation, which ended with the shooting of their captors. He waged a successful fight against the Shining Path guerrillas. This reconciled many to his increasingly authoritarian rule. But by 2000 the corruption that was uncovered blighted his attempts to get re-elected despite a constitutional bar for a third term. The scandal broke, Fujimoro left the country. The arrest of his spy chief Vladimoro Montesimo uncovered a veritable can of worms, widespread fraud, bribery and kickbacks. The army generals were deeply implicated in the subversion of democracy and human rights abuses. President Alejaudro Toledo, Fujimoro’s successor, promised to restore democratic rule, and cut the overpowerful army down to size. A dozen generals awaited trial in 2003 and large numbers of officers have been retired. The guerrilla movement is not dead but no longer poses a serious threat. President Toledo’s aim is to return to democratic civilian government.