Peru

G

Liberal Period

In the elections of 1956, former president Prado was again victorious. He immediately effected sweeping liberal reforms, but was soon hampered by strikes and riots occasioned by economic instability and runaway inflation. In 1959 the government introduced a programme to restrict the outflow of American dollars and encourage domestic industries by various means, including assisting the import of capital goods. By May 1960 the economy had improved markedly, and foreign capital flowed into Peru in loans and development contracts. That October the government won approval of its policy of gradual nationalization of most Peruvian oil-production facilities.

In the presidential elections of 1962 no candidate received the necessary one third of the votes, and a military junta took control. General Ricardo Pío Pérez Godoy was installed as president in July but was deposed by the junta in March 1963. Three months later Fernando Belaúnde Terry was elected president. During the second half of his administration, political opposition grew, and increasing inflation resulted in devaluation of the currency in 1967.

H

Military Rule

A long dispute over the claims of the International Petroleum Company (IPC), a subsidiary of the American Standard Oil Company, in the operation of the rich La Brea y Pariñas oil fields was finally settled by the Belaúnde government in August 1968. Widespread disapproval of this settlement, however, forced the resignation of the Cabinet on October 1, and Belaúnde was ousted two days later. The constitution was suspended and a military junta established, headed by General Juan Velasco Alvarado, president of the joint chiefs of staff. His government expropriated the IPC’s assets, seriously straining relations with the United States. Relations deteriorated still further in February 1969, when a Peruvian gunboat accosted two American fishing vessels off the Peruvian coast, claiming they were poaching in Peruvian waters. In 1970, despite these differences, American relief supplies were quickly sent to Peru following an earthquake that killed about 50,000 Peruvians and left some 600,000 homeless.

In the early 1970s the Velasco government began its radical reform of the social and economic system. Among the major actions were seizure of foreign-owned ranchlands, the imposition of price controls on basic goods and services, and a sweeping land-reform law. The anchovy fishing industry, seriously damaged in 1972 by alteration of ocean currents, was nationalized in 1973. The 1973-1974 budget provided a 35 per cent increase in spending to build up and diversify private industry. In June 1973 the World Bank extended credits of US$470 million to Peru, and the Inter-American Development Bank lent Peru US$30 million.

I

Return to Democracy

Another military coup toppled the Peruvian government on August 29, 1975, after a series of strikes and demonstrations expressed popular discontent with the ailing President Velasco. The following day, General Francisco Morales Bermúdez, who had been prime minister and minister of war under Velasco, was sworn in as president. His government announced that the country would be returned to democratic rule in 1980. That year, as promised, presidential elections were held. The winner, former president Belaúnde Terry, took office in July, when a new constitution came into effect. During the next five years, per capita income declined, the foreign debt rose, and violence by leftist guerrillas and government counter-insurgency forces mounted. In the 1985 presidential elections, voters chose the APRA candidate, Alan García Pérez, who failed to stem the country’s rapid economic decline.

In an upset in the 1990 presidential election, Alberto Fujimori, an agricultural economist of Japanese descent, defeated novelist Mario Vargas Llosa. Fujimori, who ran in the run-off with left-wing support, imposed an austerity programme to deal with hyper-inflation and to restore Peru’s ability to borrow money internationally. Economic hardship led to an escalation of violence by the Sendero Luminoso (Shining Path)—Maoist guerrillas who had made large areas of Peru almost ungovernable in the 1980s. In April 1992 Fujimori suspended parts of the constitution and took full control of the government, alleging that Congress and the judiciary had blocked his efforts to suppress the drug trade and the guerrillas. In September several key Sendero Luminoso leaders were captured, and in November Fujimori’s supporters won a solid majority in a legislative election. In 1993 the United States and other creditor nations resumed loans to Peru. On October 31, 1993, Peruvians voted to accept a new constitution, signed by Fujimori on December 29, that increased presidential power, created a new legislature, and allowed Fujimori to run for office again in 1995.

In January 1995 a long-standing border dispute between Peru and Ecuador escalated into violent clashes between each nation’s military forces. The territory in question covered about 340 sq km (130 sq mi) of the Condor Cordillera, which traverses both countries. This mountainous region is largely unexplored but is believed to be rich in deposits of gold, oil, and uranium. The disputed area was assigned to Peru when the border was fixed by international arbitration in 1950, but Ecuador consistently refused to accept the decision.

Heavy fighting continued through January and February, culminating in air strikes by the Peruvian air force. By the end of that period the Latin American Association of Human Rights, an independent organization, estimated that there were at least 200 dead and injured on both sides, about 5,000 civilians displaced from their homes in northern Peru, and about 15,000 displaced from their homes in southern Ecuador. Two ceasefire agreements were signed in March to allow peaceful negotiations between the countries to take place.

J

Fujimori’s Second Term and Fall From Power

The Peruvian government regarded this as a successful outcome, and President Fujimori’s popularity increased. He ran again in the presidential election in April 1995, and decisively defeated Javier Pérez de Cuéllar, the former secretary-general of the UN. From mid-1995 the Sendero Luminoso guerrillas joined forces with drug cartels in order to continue financing their activities. Peace negotiations with the Ecuadoreans continued throughout 1996.

On December 17, 1996, guerrillas of the Tupac Amaru Revolutionary Movement (MRTA) stormed the Japanese Embassy and held over 550 people hostage. Mediation and negotiations with the guerrillas, who demanded the release of imprisoned MRTA members, continued through the early months of 1997. A number of the hostages were released until only 72 hostages were left inside the building. On April 22 Peruvian military forces stormed the embassy, killing all 14 of the guerrillas and releasing 71 of the 72 hostages. One of the hostages died of a heart attack. President Fujimori took personal credit for the success of the raid, which had been launched without consulting Japan, while radical left-wing groups worldwide condemned the violence.

Fujimori’s popularity was short-lived as anti-government protests increased in mid-1997. Allegations of authoritarian rule were fuelled by the events surrounding the constitutional amendment allowing the president to serve a third term. The president was further hit by problems caused by the El Niño weather system, which caused severe flooding in early 1998, the country’s worst for 50 years.

Progress was made in the border dispute with Ecuador, when the Peruvian and Ecuadorian officials established a working timetable aimed at resolving the issue. The 157-year-old dispute was ended in October when the presidents of Peru and Ecuador signed an agreement that established a formal boundary between their two countries. The agreement is largely in Peru's favour, but allows Ecuador access to the Amazon via Peru and for the establishment of a small ecological park. That same month an earthquake measuring 6.3 on the Richter scale hit southern Peru, and archaeologists found six frozen Incan mummies near the crater of the Misti volcano in the Andes.

In January 1999 President Fujimori, in a bid to improve his popularity ratings, reshuffled his cabinet and appointed Victor Joy Way as prime minister. Way was Peru's third prime minister in six months. In April eight political parties in Peru signed an agreement to oppose any attempt by President Fujimori to stand for a third term as president.

Torrential rain and flooding, the worst in 30 years, affected the northern Loreto province in May 1999; official figures stated that 250,000 people were affected. The government's efforts to control guerrilla insurrection were given a boost in July with the capture of the Shining Path leader, Oscar Ramírez Durand. However, the group was still active later in the year. Alberto Bustamante was installed as the new prime minister in October after the entire Cabinet resigned; this was the deadline for ministers to leave office so as to be eligible candidates for the next legislative elections. The following month, Peru's final territorial dispute with Chile, dating from the War of the Pacific, was resolved.

In December 1999, Fujimori announced his intention to run in the next presidential elections; his decision, which was endorsed by the National Electoral Board in January 2000, sparked public and political protests. Fujimori's announcement that martial rule would be lifted at the end of February, almost 20 years after its imposition, was seen as a measure to gain popular support for his presidential campaign. Fujimori won the presidential election in April 2000, after a run-off election against Alejandro Toledo which opposition supporters were encouraged to boycott.

Soon after the election, the former head of Peru’s intelligence services, Vladimiro Montesinos, was involved in a bribery scandal, forcing Fujimori to call for new elections to be held in April 2001. However, in November 2000, while on a visit to Japan, he resigned from the presidency and Valentin Paniagua, the opposition’s speaker of Congress, was chosen to serve as interim president until the elections were held. Javier Pérez de Cuéllar, the former United Nations secretary-general, was appointed prime minister a few days later, and, in early January 2001 the Peruvian government announced the setting up of a Truth Commission to investigate human rights abuses committed in the country since 1982.

In February 2001 Fujimori, although still in exile in Japan, was formally charged in Peru for corruption, and in March further charges of abandoning the office of president were brought against him. Charges were also brought against former prime minister Federico Salas. The Peruvian attorney-general raised the stakes in August 2001 when he filed homicide charges against Fujimori, and an international arrest warrant was duly issued in September, with a further warrant being issued in January 2002. Although Japanese law prohibits the extradition of its citizens, the Peruvian Congress is hoping that the severity of the charges will prompt Japan to make an exception of Fujimori. In a further move in July 2002 Fujimori was accused of treason; despite this, Japan still refused to have him extradited.

K

Toledo’s Presidency

One of Fujimori’s rivals, Alejandro Toledo, was elected as president in June 2001, beating former president Alan García and becoming the country’s first president of Indian descent. Toledo pledged to improve the lot of the country’s poor and to fight corruption. In November 2001 a Truth Commission began to discuss human rights abuses from the past 20 years; it sat for the first time in April 2002. The government met the opposition as it attempted to implement a programme of economic reform. In May and June 2003 Lima and the southern cities of Arequipa and Tacna saw massive and sometimes violent demonstrations in protest at the government’s privatization plans and failure to increase the wages of public sector workers. An apparent resurgence in the activities of the Shining Path terrorist group compounded the sense of crisis surrounding Toledo’s government. A new Cabinet was appointed at the end of June, led by Peru’s first female prime minister, Beatriz Merino. She lasted a mere six months in the job before being sacked. She was replaced by Carlos Ferrero Costa. In 2005 President Toledo was convicted of electoral fraud but he escaped impeachment. Meanwhile, his prime minister resigned in August in response to the appointment of Fernando Olivera Vega, a close ally of Toledo, as foreign minister. Toledo countered by dismissing the entire Cabinet and appointing Pedro Pablo Kuczynski as prime minister. In the 2006 presidential election a previous president, Alan García, faced a run-off against Ollanta Humala, a former army officer. García won the run-off in early June, capturing more than 52 per cent of the vote.