Peru-+The+Political+and+Economic+Roller+Coaster+of+the+Last+Two+Decades

By David Houle (Professor- This was supposed to be in the -09b wikis, but due to some miscommunication between myself and Sonja, I put it here. Sorry for the inconvenience. I also apologize for the length; this topic turned out to be far deeper and more interesting than I had first guessed.)


 * The State of Peru in 1990**

The end of the 20th century was a difficult time for Peru. In 1990, the Peruvian government under President Alan Garcia (Alianza Popular Revolucionaria Americana party) competed with several insurgent and extremist groups for political control of the country. The two largest were the Shining Path, who were Maoist rebels under Abimael Guzman, a professor of philosophy who was impressed with China's cultural revolution and supported Mao's ideology; and the Tupac Amaru Revolutionary Movement, a leftist group that wanted to install a communist government in Peru. During the 90's, the Peruvian government and these two insurgent groups were collectively responsible for thousands of murders and kidnappings. Peruvian Flag

President Alan Garcia

Much of the trouble in this period can be attributed to Garcia's maladministration of the country. His major economic policies included: -- Extensive use of price controls (a very anti-capitalist technique that goes against orthodox economic theory) -- Protectionist policies that handicapped foreign trade -- Interest Payment Caps on foreign debt (this severely damaged the willingness of the international community to lend to or invest in Peru) -- Vast increases in the size of the government (projects included nationalization of banks and a massive electric rail project in Lima)

These policies led to massive increases in government spending and a precipitous drop in foreign investment. These two effects resulted in hyperinflation that amounted to more than two million percent during Garcia's term in office. In turn, hyperinflation led to a dramatic increase in poverty, which was already a problem at the beginning of Garcia's presidency, but reached crisis levels by the end. Poverty increased from 42% of Peruvians to 55%, as per capita real wages dropped considerably.

The dramatic downturn of the economy soon led to discontent with the government, and the Shining Path was able to gain some traction, especially in poor rural areas. By 1990, the Shining Path actually had political control over a substantial portion of Peru.

At first, President Garcia mostly ignored the Shining Path, believing that they didn't pose any real threat. Later, when it became clear that the Shining Path seriously threatened the government (possibly in light of other rebel movements throughout the Americas,) he started a military campaign against them. Unfortunately, these military efforts were poorly controlled, and members of the armed forced committed several massacres. Garcia also created an off-the-record paramilitary organization to combat the Shining Path, but this group also committed various crimes, such as murders and kidnappings.

Shining Path Flag

Shining Path Guerrillas

Between popular discontent and the government's poorly-led efforts to suppress insurgency, the Shining Path grew considerably. The organization was founded and led by a philosophy professor named Abimael Guzman. Guzman was very impressed by the Cultural Revolution in China, and strongly followed the Maoist school of thought. Principally, this meant that the Shining Path was severely anti-capitalist, and desired leftist economic reforms. It also meant the Shining Path followed Mao's roadmap for revolution, whereby rebels convert the poor in rural agricultural areas to their cause first, isolating the major cities and the bourgeoisie living in them from financial support from the countryside.

Areas of Shining Path Influence and Control

The common people never really believed in Maoism as a group, but they were very upset over rising poverty, massive inflation, and the apparent disinterest of the Peruvian government which had allowed the Shining Path to operate virtually unchecked in many regions. Although most common people never supported the full ideology of the Shining Path, they were sympathetic towards it because it called for a revolution that would uplift the poor.

Following Maoism, Shining Path members generally operated as guerrillas. They tried to operate covertly, and didn't generally use uniforms. They also explicitily rejected the very idea of human rights, believing that the entire concept was invented by the rich to maintain power (because human rights necessarily requires wars to be conducted between uniformed soldiers, and the poor can't field a legitimate army.) As such, the Shining Path didn't flinch at murder, torture, kidnapping, bombing, mutilation, etc.

In many areas, the Shining Path conducted a campaign of assassinations against local leaders, much like ETA did in Spain. By 1990, about a third of the local Peruvian communities were too intimidated to hold elections.

MRTA Flag

MRTA Members

The other major insurgent group was the MRTA (Tupac Amaru Revolutionary Movement.) Somewhat like the Shining Path, MRTA members wished to establish a communist government Peru, and they were willing to commit serious crimes to further their goal. Beyond that, however, the two groups had serious differences, and they fought openly against one another.

The MRTA stood strongly against the "Imperialists" like the United States, and didn't believe in Maoism at all. They also were not guerrillas; they operated openly and with uniforms, as seen above, like some other major criminal organizations in the Americas. Over time, the MRTA conducted many raids and robberies. They often took hostages, but unlike both the Shining Path and the Peruvian government, they largely refrained from killing unarmed civilians. The MRTA was also much smaller than the Shining Path, which was itself smaller than the government, and due to its size, the MRTA ultimately did less damage to Peru than either of the other groups.


 * The 1990's**

In 1990, Peru held new elections. Peru was hungry for change, and the two leading candidates, Alberto Fujimori and Vargas Llosa, ran on change platforms. Among the policies that Llosa openly supported were radical economic reforms that included full repayment of interest to foreign creditors (reversing Garcia's policy of capping debt repayment) and large reductions in the size of government. The poor feared that these changes would remove what little government support they had, and Fujimori capitalized on this fear, telling them that Llosa's proposals would indeed worsen things for the poor.

With the support of the numerous poor, Fujimori won the election. He became the first American of Japanese decent ever to win a presidential election. President Alberto Fujimori

In an interesting twist, after the election, Fujimori largely abandoned his own platform, and adopted a more extreme version of Llosa's. He instituted radical liberalizing reforms (which led to the neologism "Fujishock," which refers to his economic reforms). These reforms were not only very different from Fujimori's campaign platform; they were actually a more extreme version of his Llosa's platform, which Fujimori had just scared people away from.

Fujishock included several major reforms: --Ended Garcia's limit on debt repayments (pleasing the international financial community) --Greatly reduces price controls (initially, this caused commodity prices to increase rapidly, but ultimately stoked the economy) --Greatly reduced government size and spending by selling off most of the nationalized businesses --Greatly reduced restrictions on international trade and investment

Fujimori's economic policies ultimately made lots of sense, but the congress remained under the control of opposing political parties and restricted Fujimori's freedom to enact policy changes. However, by 1992, the congress's popular support was abysmal, so Fujimori staged a coup against his own government (leading to the neologism "Fujigolpe," or "Fuji-coup"), using the military to forcibly disband the congress. At first, the congress tried to hold a legislative session anyway, but the military used tear gas to disperse them. Fujimori also struck out against political and media opponents in general, arresting or kidnapping them.

A tank in front of the Congress building

Soldiers outside of a news building

After that, Fujimori gave himself virtually unlimited authority and power over the country. He took over the Judiciary, suspended the constitution, and assumed all of the legislative powers, giving himself the authority both to enact his policies and to detain or arrest literally anyone for any reason. In this regard, Fujimori became a full-fledged authoritarian, with powers similar to other authoritarians throughout history.

The Fuji-golpe was condemned by the rest of the world, including the United States. It was also obviously very unpopular with the legislature, which immediately used its authority to officially remove Fujimori from office, but the military (aside from an unsuccessful military coup that year), along with the majority of Peruvians, supported Fujimori, and he remained in power. Shortly after the auto-coup, the United States recognized Fujimori's new government as legitimate, and the rest of the world followed suite thereafter.

Fujimori used his new powers to fully enact his economic reforms. These economic reforms started a long period of strong economic growth. Within a year, he also drafted a new constitution and held elections for a new congress. These elections were reasonably fair, and Fujimori's supporters won a majority of the seats and later ratified the new constitution.

Fujimori also used the military to hunt down members of both the Shining Path and the MRTA. He gave the military the power to arrest anyone that it suspected of being part of these groups and try them in secret military courts. The military used its powers to excess, murdering or detaining many innocents, but they ultimately crippled the Shining Path and captured Guzman in 1992. Naturally, Fujimori took full political credit for the capture, and even ordered that Guzman be given a special black-and-white-stripes prisoner outfit to make media photos of Guzman's capture more striking.

Abimael Guzman after his arrest

The MRTA was also severely weakened. It conducted its last major insurgency in 1996, when 14 members attacked a party held at the Japanese ambassador's residence, taking about 400 politicians, diplomats and business leaders hostage. The hostage crisis lasted four months, and most of the hostages were released during that time. Finally, Fujimori ordered the military to raid and recapture the residence. Military commandos succeeded in taking back the residence with minimal casualties, killing all 14 hostage takers (some in combat, some by summary execution after their surrender.) Again, Fujimori took full credit for the successful raid.

1996 Japanese Embassy Hostage Crisis (although it did not technically happen at the embassy)

After strengthening the Peruvian economy, and weakening domestic insurgency, Fujimori was very popular, and he easily won a second term in office after elections in 1995. However, with economic desperation behind them, the people of Peru started to grow weary of Fujimori's heavy-handed authoritarian style. They began to want more of their old freedoms back, and Fujimori failed to deliver. On the contrary, Fujimori trampled on the human rights of many Peruvians. One particularly striking example was a "family planning" initiative that forcibly sterilized hundreds of thousands of indigenous women.

Fujimori's support deteriorated in the late 90's. When a new election season began, Fujimori manipulated the congress to be able to run for president for a third time (the constitution, which Fujimori himself was instrumental in drafting, limited presidents to two terms.) Fujimori won a third term in office in 2000, but the election was extremely close.

Soon after Fujimori won a third term, various scandals within Fujimori's government and revelations about his human rights abuses led to a popular movement against him. On November 10, 2000, seeing the writing on the wall, Fujimori requested and received approval from the congress to hold another presidential election in 2001 which he would not participate in.

Anti-Fujimori Protesters

A week later, while in Japan, Fujimori resigned as president. The Congress rejected the resignation, and instead voted him out of office. Fujimori's official power had come to an end, and he received multiple convictions for human rights violations and corruption.

Although Fujimori is no longer in power, he is still well-liked by many Peruvians who know him for his economic and anti-insurgency successes. His daughter, Keiko Fujimori, is currently a beneficiary of this support; she is now a prominent member of Congress. She is rumored to be considering a run for the Presidency in 2011. Keiko and Alberto Fujimori

Fujimori was ultimately succeeded as president by Alejandro Toledo, his closest opponent in the 2000 elections. To the probable benefit of the people of Peru, Toledo's term in office was much less interesting than the prior decades. He continued to use liberal, capitalistic economic policies, and signed free trade agreements with several countries, including the United States. He also initiated programs to benefit the poor (he himself grew up in poverty. His father was a bricklayer and his mother was a fishmonger, and Toledo was one of sixteen children.)

President Alejandro Toledo

In the years between 1990 and 2006, Peru had been on a political and economic roller coaster. The country had gone from a massively unstable economy crippled with hyperinflation to one of the stronger economies in the Americas. Peru had seen the entire array of crimes against humanity take place on its soil, perpetrated by both insurgent groups and the government. Peru had seen elections with landslide victories, elections with extremely tight margins, and even a military self-coup.

Interestingly, just like a roller coaster, Peru ended up right back where it started in 2006, when a certain veteran politician won the 2006 presidential elections...



Thankfully, President Garcia seems to have learned from some of his previous mistakes (which, of course, he blames entirely on other countries,) and his newest term in office hasn't been nearly as disastrous as his previous terms.

BBC News. Mass Sterilisation Scandal Shocks Peru Becker, Wolfy. Japanese embassy hostage crisis in Peru started 10 years ago Kenney, Charles. __Fujimori's Coup and the Breakdown of Democracy in Latin America.__ University of Notre Dame Press (2004). Wikipedia. Alberto Fujimori, Keiko Fujimori, Garcia, Toledo, Guzman, Shining Path, MRTA, Fujigolpe, 1996 Hostage Crisis, [|Economic History of Peru]
 * Sources**