Peru

---

Peru - Acknowledgments and Preface

The authors would like to acknowledge any contributions made by the writers of the 1981 edition of Peru: A Country Study. The authors and book editor of the present volume would also like to thank one of those writers in particular, James D. Rudolph, for kindly supplying the official 1989 Peru regionalization map, on which the corresponding map in this volume is based.

The authors are grateful to individuals in various agencies of the United States government, private institutions, and Peruvian diplomatic offices, who gave their time, research materials, and special knowledge to provide information and perspective. Thanks also go to Ralph K. Benesch, who oversees the Country Studies--Area Handbook Program for the Department of the Army. None of these individuals, however, is in any way responsible for the work of the authors.

The book editor would like to thank members of the Federal Research Division who contributed directly to the preparation of the manuscript. These include Sandra W. Meditz, who reviewed all textual and graphic materials, served as liaison with the sponsoring agency, and provided numerous substantive and technical contributions; Marilyn L. Majeska, who reviewed editing and managed production; Andrea T. Merrill, who edited the tables; and Barbara Edgerton and Izella Watson, who did the word processing. Thanks also go to Cissie Coy, who edited the chapters; Beverly J. Wolpert, who performed the final prepublication editorial review; and Joan C. Cook, who compiled the index. The Library of Congress Printing and Processing Section performed the phototypesetting, under the supervision of Peggy Pixley.

David P. Cabitto provided invaluable graphics support, including preparation of several maps. He was assisted by Wayne Horne, who prepared the cover artwork; Harriett R. Blood, who prepared the topography and drainage map; and the firm of Greenhorne and O'Mara. Deborah Anne Clement designed the illustrations on the title page of each chapter.

Finally, the authors acknowledge the generosity of the individuals and the public and private agencies who allowed their photographs to be used in this study.

Preface">

Like its predecessor, this study is an attempt to examine objectively and concisely the dominant historical, social, economic, political, and military aspects of contemporary Peru. Sources of information included scholarly books, journals, monographs, official reports of governments and international organizations, and numerous periodicals. To the extent possible, place-names follow the system adopted by the United States Board on Geographic Names. Measurements are given in the metric system.

Spanish surnames generally are composed of both the father's and mother's family names, in that order, although there are numerous variations. In the instance of Alan Garc�a P�rez, for example, Garc�a is his patronymic and P�rez is his mother's maiden name. In informal use, the matronymic is often dropped, a practice that usually has been followed in this book, except in cases where the individual could easily be confused with a relative or someone with the same patronymic.

The body of the text reflects information available as of November 1992. Certain other portions of the text, however, have been updated. The Bibliography lists published sources thought to be particularly helpful to the reader.

Peru

Peru - History

Pre-Inca Cultures

The first great conquest of Andean space began some 10,000 years ago when the descendants of the original migrants who crossed the land bridge over what is now the Bering Straits between the Asian and American continents reached northern South America. Over the next several millennia, hunter-gatherers fanned out from their bridgehead at Panama to populate the whole of South America. By about 2500 B.C., small villages inhabited by farmers and fishermen began to spring up in the fertile river valleys of the north coast of Peru.

These ancient Peruvians lived in simple adobe houses, cultivated potatoes and beans, fished in the nearby sea, and grew and wove cotton for their clothing. The catalyst for the development of the more advanced civilizations that followed was the introduction of a staple annual crop--maize (corn), and the development of irrigation, both dating from around the thirteenth century B.C. The stabilization of the food supply and ensuing surplus formed the foundation for the development of the great civilizations that rose and fell across the Andes for more than a thousand years prior to the arrival of the Europeans.

The Incas, of course, were only the most recent of these highly developed native American cultures to evolve in the Andes. The earliest central state to emerge in the northern highlands (that is, a state able to control both highland and coastal areas) was the Kingdom of Chav�n, which emerged in the northern highlands and prospered for some 500 years between 950 B.C. and 450 B.C. Although it was originally thought by Julio C. Tello, the father of Peruvian archaeology, to have been "the womb of Andean civilization," it now appears to have had Amazonic roots that may have led back to Mesoamerica.

Chav�n was probably more of a religious than political panAndean phenomenon. It seems to have been a center for the missionary diffusion of priests who transmitted a particular set of ideas, rituals, and art style throughout what is now northcentral Peru. The apparent headquarters for this religious cult in all likelihood was Chav�n de Huantar in the Ancash highlands, whose elaborately carved stone masonry buildings are among the oldest and most beautiful in South America. The great, massive temple there, oriented to the cardinal points of the solstice, was perceived by the people of Chav�n to be the center of the world, the most holy and revered place of the Chav�n culture. This concept of God and his elite tied to a geographical location at the center of the cosmos--the idea of spatial mysticism--was fundamental to Inca and pre-Inca beliefs.

After the decline of the Chav�n culture around the beginning of the Christian millennium, a series of localized and specialized cultures rose and fell, both on the coast and in the highlands, during the next thousand years. On the coast, these included the Gallinazo, Mochica, Paracas, Nazca, and Chim� civilizations. Although each had their salient features, the Mochica and Chim� warrant special comment for their notable achievements.

The Mochica occupied a 136-kilometer-long expanse of the coast from the R�o Moche Valley and reached its apogee toward the end of the first millennium A.D. They built an impressive irrigation system that transformed kilometers of barren desert into fertile and abundant fields capable of sustaining a population of over 50,000. Without benefit of the wheel, the plough, or a developed writing system, the Mochica nevertheless achieved a remarkable level of civilization, as witnessed by their highly sophisticated ceramic pottery, lofty pyramids, and clever metalwork. In 1987 near Sip�n, archaeologists unearthed an extraordinary cache of Mochica artifacts from the tomb of a great Mochica lord, including finely crafted gold and silver ornaments, large, gilded copper figurines, and wonderfully decorated ceramic pottery. Indeed, the Mochica artisans portrayed such a realistic and accurately detailed depiction of themselves and their environment that we have a remarkably authentic picture of their everyday life and work.

Whereas the Mochica were renowned for their realistic ceramic pottery, the Chim� were the great city-builders of pre-Inca civilization. As loose confederation of cities scattered along the coast of northern Peru and southern Ecuador, the Chim� flourished from about 1150 to 1450. Their capital was at Chan Chan outside of modern-day Trujillo. The largest pre-Hispanic city in South America at the time, Chan Chan had 100,000 inhabitants. Its twenty square kilometers of precisely symmetrical design was surrounded by a lush garden oasis intricately irrigated from the R�o Moche several kilometers away. The Chim� civilization lasted a comparatively short period of time, however. Like other coastal states, its irrigation system, watered from sources in the high Andes, was apparently vulnerable to cutoff or diversion by expanding highland polities.

In the highlands, both the Tiwanaku (Tiahuanaco) culture, near Lake Titicaca in Bolivia, and the Wari (Huari) culture, near the present-day city of Ayacucho, developed large urban settlements and wide-ranging state systems between A.D. 500 and A.D. 1000. Each exhibited many of the aspects of the engineering ingenuity that later appeared with the Incas, such as extensive road systems, store houses, and architectural styles. Between A.D. 1000 and 1450, however, a period of fragmentation shattered the previous unity achieved by the Tiwanaku-Wari stage. During this period, scores of different ethnic-based groups of varying sizes dotted the Andean landscape. In the central and southern Andes, for example, the Chupachos of Hu�nuco numbered some 10,000, while the Lupacas on the west bank of Lake Titicaca comprised over 100,000.

Peru

Peru - The Incas

The Incas of Cusco (Cuzco) originally represented one of these small and relatively minor ethnic groups, the Quechuas. Gradually, as early as the thirteenth century, they began to expand and incorporate their neighbors. Inca expansion was slow until about the middle of the fifteenth century, when the pace of conquest began to accelerate, particularly under the rule of the great emperor Pachacuti Inca Yupanqui (1438-71). Historian John Hemming describes Pachacuti as "one of those protean figures, like Alexander or Napoleon, who combine a mania for conquest with the ability to impose his will on every facet of government." Under his rule and that of his son, Topa Inca Yupanqui (1471-93), the Incas came to control upwards of a third of South America, with a population of 9 to 16 million inhabitants under their rule. Pachacuti also promulgated a comprehensive code of laws to govern his far-flung empire, called Tawantinsuyu, while consolidating his absolute temporal and spiritual authority as the God of the Sun who ruled from a magnificently rebuilt Cusco.

Although displaying distinctly hierarchical and despotic features, Incan rule also exhibited an unusual measure of flexibility and paternalism. The basic local unit of society was the ayllu, which formed an endogamous nucleus of kinship groups who possessed collectively a specific, although often disconnected, territory. In the ayllu, grazing land was held in common (private property did not exist), whereas arable land was parceled out to families in proportion to their size. Since self-sufficiency was the ideal of Andean society, family units claimed parcels of land in different ecological niches in the rugged Andean terrain. In this way, they achieved what anthropologists have called "vertical complementarity," that is, the ability to produce a wide variety of crops--such as maize, potatoes, and quinoa (a protein-rich grain)--at different altitudes for household consumption.

The principle of complementarity also applied to Andean social relations, as each family head had the right to ask relations, allies, or neighbors for help in cultivating his plot. In return, he was obligated to offer them food and chicha (a fermented corn alcoholic beverage), and to help them on their own plots when asked. Mutual aid formed the ideological and material bedrock of all Andean social and productive relations. This system of reciprocal exchange existed at every level of Andean social organization: members of the ayllus, curacas (local lords) with their subordinate ayllus, and the Inca himself with all his subjects.

Ayllus often formed parts of larger dual organizations with upper and lower divisions called moieties, and then still larger units, until they comprised the entire ethnic group. As it expanded, the Inca state became, historian Nathan Wachtel writes, "the pinnacle of this immense structure of interlocking units. It imposed a political and military apparatus on all of these ethnic groups, while continuing to rely on the hierarchy of curacas, who declared their loyalty to the Inca and ruled in his name." In this sense, the Incas established a system of indirect rule that enabled the incorporated ethnic groups to maintain their distinctiveness and self-awareness within a larger imperial system.

All Inca people collectively worked the lands of the Inca, who served as representative of the God of the Sun--the central god and religion of the empire. In return, they received food, as well as chicha and coca leaves (which were chewed and used for religious rites and for medicinal purposes); or they made cloth and clothing for tribute, using the Inca flocks; or they regularly performed mita, or service for public works, such as roads and buildings, or for military purposes that enabled the development of the state. The Inca people also maintained the royal family and bureaucracy, centered in Cusco. In return for these services, the Inca allocated land and redistributed part of the tribute received--such as food, cloth, and clothes--to the communities, often in the form of welfare. Tribute was stored in centrally located warehouses to be dispensed during periods of shortages caused by famine, war, or natural disaster. In the absence of a market economy, Inca redistribution of tribute served as the primary means of exchange. The principles of reciprocity and redistribution, then, formed the organizing ideas that governed all relations in the Inca empire from community to state.

One of the more remarkable elements of the Inca empire was the mitmaq system. Before the Incas, these were colonies of settlers sent out from the ayllus to climatically different Andean terrains to cultivate crops that would vary and enrich the community diet. Anthropologist John V. Murra dubbed these unique Andean island colonies "vertical archipelagos," which the Incas adapted and applied on a large scale to carve out vast new areas of cultivation. The Incas also expanded the original Andean concept of mitmaq as a vehicle for developing complementary sources of food to craft specialization and military expansion. In the latter instance, Inca mitmaq were used to establish permanent garrisons to maintain control and order on the expanding Inca frontier. What "began as a means of complementing productive access to a variety of ecological tiers had become," in the words of Murra, "an onerous means of political control" under the Incas.

By the late fifteenth century and early sixteenth century, the Inca Empire had reached its maximum size. Such powerful states as the coastal Chim� Kingdom were defeated and incorporated into the empire, although the Chim�s spoke a language, Yunga, that was entirely distinct from the Incas' Quechua. But as the limits of the central Andean culture area were reached in present-day Chile and Argentina, as well as in the Amazon forests, the Incas encountered serious resistance, and those territories were never thoroughly subjugated.

At the outset, the Incas shared with most of their ethnic neighbors the same basic technology: weaving, pottery, metallurgy, architecture, construction engineering, and irrigation agriculture. During their period of dominance, little was added to this inventory of skills, other than the size of the population they ruled and the degree and efficiency of control they attained. The latter, however, constituted a rather remarkable accomplishment, particularly because it was achieved without benefit of either the wheel or a formal system of writing. Instead of writing, the Incas used the intricate and highly accurate khipu (knot-tying) system of recordkeeping . Imperial achievements were the more extraordinary considering the relative brevity of the period during which the empire was built (perhaps four generations) and the formidable geographic obstacles of the Andean landscape.

Viewed from the present-day perspective of Peruvian underdevelopment, one cannot help but admire a system that managed to bring under cultivation four times the amount of arable land as today. Achievements such as these caused some twentieth-century Peruvian scholars of the indigenous peoples, known as indigenistas (Indigenists), such as Hildebrando Castro Pozo and Luis Eduardo Valc�rcel, to idealize the Inca past and to overlook the hierarchical nature and totalitarian mechanisms of social and political control erected during their Incan heyday. To other intellectuals, however, from Jos� Carlos Mari�tegui to Luis Guillermo Lumbreras, the path to development has continued to call for some sort of return to the country's pre-Columbian past of communal values, autochthonous technology, and genius for production and organization.

By the time that the Spaniards arrived in 1532, the empire extended some 1,860 kilometers along the Andean spine--north to southern Colombia and south to northern Chile, between the Pacific Ocean in the west and the Amazonian rain forest in the east. Some five years before the Spanish invasion, this vast empire was rocked by a civil war that, combined with diseases imported by the Spaniards, would ultimately weaken its ability to confront the European invaders. The premature death by measles of the reigning Sapa Inca, Huayna C�pac (1493-1524), opened the way for a dynastic struggle between the emperor's two sons, Hu�scar (from Cusco) and the illegitimate Atahualpa (from Quito), who each had inherited half the empire. After a five-year civil war (1528-32), Atahualpa (1532-33) emerged victorious and is said to have tortured and put to death more than 300 members of Hu�scar's family. This divisive and debilitating internecine conflict left the Incas particularly vulnerable just as Francisco Pizarro and his small force of adventurers came marching up into the Sierra.

Peru

Peru - Pizarro and the Conquistadors

While the Inca empire flourished, Spain was beginning to rise to prominence in the Western world. The political union of the several independent realms in the Iberian Peninsula and the final expulsion of the Moors after 700 years of intermittent warfare had instilled in Spaniards a sense of destiny and a militant religious zeal. The encounter with the New World by Crist�bal Col�n (Christopher Columbus) in 1492 offered an outlet for the material, military, and religious ambitions of the newly united nation.

Francisco Pizarro, a hollow-cheeked, thinly beared Extremaduran of modest hidalgo (lesser nobility) birth, was not only typical of the arriviste Spanish conquistadors who came to America, but also one of the most spectacularly successful. Having participated in the indigenous wars and slave raids on Hispa�iola, Spain's first outpost in the New World, the tough, shrewd, and audacious Spaniard was with Vasco Nu�ez de Balboa when he first glimpsed the Pacific Ocean in 1513 and was a leader in the conquest of Nicaragua (1522). He later found his way to Panama, where he became a wealthy encomendero and leading citizen. Beginning in 1524, Pizarro proceeded to mount several expeditions, financed mainly from his own capital, from Panama south along the west coast of South America.

After several failures, Pizarro arrived in northern Peru late in 1531 with a small force of about 180 men and 30 horses. The conquistadors were excited by tales of the Incas' great wealth and bent on repeating the pattern of conquest and plunder that was becoming practically routine elsewhere in the New World. The Incas never seemed to appreciate the threat they faced. To them, of course, the Spaniards seemed the exotics. "To our Indian eyes," wrote Felipe Guam�n Poma de Ayala, the author of Nueva cr�nica y buen gobierno (New Chronicle and Good Government), "the Spaniards looked as if they were shrouded like corpses. Their faces were covered with wool, leaving only the eyes visible, and the caps which they wore resembled little red pots on top of their heads."

On November 15, 1532, Pizarro arrived in Cajamarca, the Inca's summer residence located in the Andean highlands of northern Peru, and insisted on an audience with Atahualpa. Guam�n Poma says the Spaniards demanded that the Inca renounce his gods and accept a treaty with Spain. He refused. "The Spaniards began to fire their muskets and charged upon the Indians, killing them like ants. At the sound of the explosions and the jingle of bells on the horses' harnesses, the shock of arms and the whole amazing novelty of their attackers' appearance, the Indians were terrorstricken . They were desperate to escape from being trampled by the horses, and in their headlong flight a lot of them were crushed to death." Guam�n Poma adds that countless "Indians" but only five Spaniards were killed, "and these few casualties were not caused by the Indians, who had at no time dared to attack the formidable strangers." According to other accounts, the only Spanish casualty was Pizarro, who received a hand wound while trying to protect Atahualpa.

Pizarro's overwhelming victory at Cajamarca in which he not only captured Atahualpa, but devastated the Inca's army, estimated at between 5,000 and 6,000 warriors, dealt a paralyzing and demoralizing blow to the empire, already weakened by civil war. The superior military technology of the Spaniards--cavalry, cannon, and above all Toledo steel--had proved unbeatable against a force, however large, armed only with stone-age battle axes, slings, and cotton-padded armor. Atahualpa's capture not only deprived the empire of leadership at a crucial moment, but the hopes of his recently defeated opponents, the supporters of Hu�scar, were revived by the prospect of an alliance with a powerful new Andean power contender, the Spaniards.

Atahualpa now sought to gain his freedom by offering the Spaniards a treasure in gold and silver. Over the next few months, a fabulous cache of Incan treasure--some eleven tons of gold objects alone--was delivered to Cajamarca from all corners of the empire. Pizarro distributed the loot to his "men of Cajamarca," creating instant "millionaires," but also slighting Diego de Almagro, his partner who arrived later with reinforcements. This sowed the seeds for a bitter factional dispute that soon would throw Peru into a bloody civil war and cost both men their lives. Once enriched by the Incas' gold, Pizarro, seeing no further use for Atahualpa, reneged on his agreement and executed the Inca--by garroting rather than hanging--after Atahualpa agreed to be baptized as a Christian.

Peru

Peru - Consolidation of Control

With Atahualpa dead, the Spaniards proceeded to march on Cusco. On the way, they dealt another decisive blow, aided by native American allies from the pro-Hu�scar faction, to the still formidable remnants of Atahualpa's army. Then on November 15, 1533, exactly a year after arriving at Cajamarca, Pizarro, reinforced with an army of 5,000 native American auxiliaries, captured the imperial city and placed Manco C�pac II, kin of Hu�scar and his faction, on the Inca throne as a Spanish puppet.

Further consolidation of Spanish power in Peru, however, was slowed during the next few years by both indigenous resistance and internal divisions among the victorious Spaniards. The native population, even those who had allied initially with the invaders against the Incas, had second thoughts about the arrival of the newcomers. They originally believed that the Spaniards simply represented one more in a long line of Andean power-contenders with whom to ally or accommodate. The continuing violent and rapacious behavior of many Spaniards, however, as well as the harsh overall effects of the new colonial order, caused many to alter this assessment. This change led Manco C�pac II to balk at his subservient role as a Spanish puppet and to rise in rebellion in 1536. Ultimately unable to defeat the Spaniards, Manco retreated to Vilcabamba in the remote Andean interior where he established an independent Inca kingdom, replete with a miniature royal court, that held out until 1572.

Native American resistance took another form during the 1560s with the millenarian religious revival in Huamanga known as Taki Onqoy (literally "dancing sickness"), which preached the total rejection of Spanish religion and customs. Converts to the sect expressed their conversion and spiritual rebirth by a sudden seizure in which they would shake and dance uncontrollably, often falling and writhing on the ground. The leaders of Taki Onqoy claimed that they were messengers from the native gods and preached that a pan-Andean alliance of native gods would destroy the Christians by unleashing disease and other calamities against them. An adherent to the sect declared at an official inquiry in 1564 that "the world has turned about, and this time God and the Spaniards [will be] defeated and all the Spaniards killed and their cities drowned; and the sea will rise and overwhelm them, so that there will remain no memory of them."

To further complicate matters for the conquerors, a fierce dispute broke out among the followers of Pizarro and those of Diego de Almagro. Having fallen out over the original division of spoils at Cajamarca, Almagro and his followers challenged Pizarro's control of Cusco after returning from an abortive conquest expedition to Chile in 1537. Captured by Pizarro's forces at the Battle of Salinas in 1538, Almagro was executed, but his supporters, who continued to plot under his son, Diego, gained a measure of revenge by assassinating Pizarro in 1541.

As the civil turmoil continued, the Spanish crown intervened to try to bring the dispute to an end, but in the process touched off a dangerous revolt among the colonists by decreeing the end of the encomienda system  in 1542. The encomienda was a much abused prerogative to extract labor and tribute from the indigenous peoples in return for the responsibility to protect and Christianize them. It had originally been granted as a reward to the conquistadors and their families during the conquest and ensuing colonization, and was regarded as sacrosanct by the grantees, or encomenderos, who numbered about 500 out of a total Spanish population of 2,000 in 1536. However, to the crown it raised the specter of a potentially privileged, neofeudal elite emerging in the Andes to challenge crown authority.

The crown's efforts to enforce the New Laws (Nuevos Leyes) of 1542 alienated the colonists, who rallied around the figure of Gonzalo Pizarro, the late Francisco's brother. Gonzalo managed to kill the intemperate Viceroy Don Blasco N��ez de la Vela, who, on his arrival, had foolishly tried to enforce the New Laws. In 1544 Pizarro assumed de facto authority over Peru. His arbitrary and brutal rule, however, caused opposition among the colonists, so that when another royal representative, Pedro de la Gasca, arrived in Peru to restore crown authority, he succeeded in organizing a pro-royalist force that defeated and executed Pizarro in 1548. With Gonzalo's death, the crown finally succeeded, despite subsequent intermittent revolts, in ending the civil war and exerting crown control over Spanish Peru.

It would take another two decades, however, to finally quell native American resistance. Sensing the danger of the Taki Onqoy heresy, the Spanish authorities moved quickly and energetically, through a church-sponsored anti-idolatry campaign, to suppress it before it had a chance to spread. Its leaders were seized, beaten, fined, or expelled from their communities. At the same time, a new campaign was mounted against the last Inca holdout at Vilcabamba, which was finally captured in 1572. With it, the last reigning Inca, T�pac Amaru, was tried and beheaded by the Spaniards in a public ceremony in Cusco, thereby putting an end to the events of the conquest that had begun so dramatically four decades earlier at Cajamarca.

Peru

Peru - THE COLONIAL PERIOD

Demographic Collapse

Throughout the Americas, the impact of the Spanish conquest and subsequent colonization was to bring about a cataclysmic demographic collapse of the indigenous population. The Andes would be no exception. Even before the appearance of Francisco Pizarro on the Peruvian coast, the lethal diseases that had been introduced into the Americas with the arrival of the Spaniards-- smallpox, malaria, measles, typhus, influenza, and even the common cold--had spread to South America and begun to wreak havoc throughout Tawantinsuyu. Indeed, the death of Huayna C�pac and his legitimate son and heir, Ninan Cuyoche, which touched off the disastrous dynastic struggles between Hu�scar and Atahualpa, is believed to have been the result of a smallpox or measles epidemic that struck in 1530-31.

With an estimated population of 9 to 16 million people prior to the arrival of the Europeans, Peru's population forty years later was reduced on average by about 80 percent, generally higher on the coast than in the highlands. The chronicler Pedro de Cieza de Leon, who traveled over much of Peru during this period, was particularly struck by the extent of the depopulation along the coast. "The inhabitants of this valley [Chincha, south of Lima]," he wrote, "were so numerous that many Spaniards say that when it was conquered by the Marquis [Pizarro] and themselves, there were ... more than 25,000 men, and I doubt that there are now 5,000, so many have been the inroads and hardships they have suffered." Demographic anthropologists Henry F. Dobyns and Paul L. Doughty have estimated that the native American population fell to about 8.3 million by 1548 and to around 2.7 million in 1570. Unlike Mexico, where the population stabilized at the end of the seventeenth century, it did not reach its nadir in Peru until the latter part of the eighteenth century, after the great epidemic of 1719.

War, exploitation, socioeconomic change, and the generalized psychological trauma of conquest all combined to reinforce the main contributor to the demise of the native peoples--epidemic disease. Isolated from the old world for millennia and therefore lacking immunities, the Andean peoples were defenseless to the introduction of the deadly viruses by the Europeans. Numerous killer pandemics swept down from the north, laying waste to entire communities. Occurring one after the other in roughly tenyear intervals during the sixteenth century (1525, 1546, 1558-59, 1585), these epidemics did not allow the population time to recover, while impairing its ability to reproduce itself.

Peru

Peru - The Colonial Economy

With the discovery of the great silver lodes at Potos� in Per� Alto (Upper Peru--present-day Bolivia) in 1545 and mercury at Huancavelica in 1563, Peru became what historian Frederick B. Pike describes as "Spain's great treasure house in South America." As a result, the axis of the colonial economy began to move away from the direct expropriation of Incan wealth and production to sustain the initial Spanish population through the encomienda system to the extraction of mineral wealth. The population at Potos� in the high Andes reached its apogee in 1650 at about 160,000, making it one of the largest cities in the Western world at the time. In its first ten years, according to Alexander von Humboldt, Potos� produced some 127 million pesos, which fueled for a time the Habsburg war machine and Spanish hegemonic political pretensions in Europe. Silver from Potos� also dynamized and helped to develop an internal economy of production and exchange that encompassed not only the northern highlands, but also the Argentine pampa, the Central Valley of Chile, and coastal Peru and Ecuador. The main "growth pole" of this vast "economic space," as historian Carlos Assadourian Sempat calls it, was the Lima-Potos� axis, which served as centers of urban concentration, market demand, strategic commodity flows (silver exports and European imports), and inflated prices.

If Potos� silver production was the mainspring of this economic system, Lima was its hub. "The city of the Kings" (Los Reyes) had been founded by Pizarro as the capital of the new viceroyalty in 1535 in order to reorient trade, commerce, and power away from the Andes toward imperial Spain and Europe. As the outlet for silver bullion on the Pacific, Lima and its nearby port, Callao, also received and redistributed the manufactured goods from the metropolis for the growing settlements along the growth pole. The two-way flow of imports and exports through Lima concentrated both wealth and administration, public and private, in the city. As a result, Lima became the headquarters for estate owners and operators, merchants connecting their Andean trading operations with sources of supply in Spain, and all types of service providers, from artisans to lawyers, who needed access to the system in a central place. Not far behind came the governmental and church organizations established to administer the vast viceroyalty. Finally, once population, commerce, and administration interacted, major cultural institutions such as a university, a printing press, and theater followed suit.

The great architect of this colonial system was Francisco Toledo y Figueroa, who arrived in Lima in 1569, when its population was 2,500, and served as viceroy until 1581. Toledo, one of Madrid's ablest administrators and diplomats, worked to expand the state, increase silver production, and generally reorganize the economy by instituting a series of major reforms during his tenure.

Native communities (ayllus) were concentrated into poorly located colonial settlements called ( reducciones) to facilitate administration and the conversion of the native Americans to Christianity. The Incaic mita system was shifted from performing public works or military service to supplying compulsory labor for the mines and other key sectors of the economy and state. Finally, various fiscal schemes, such as the tribute tax to be paid in coin and the forced purchase of Spanish merchandise, were levied on the indigenous population in order to force or otherwise induce it into the new monetary economy as "free wage" workers. In these, as in many other instances, the Spaniards used whatever elements of the Andean political, social, and economic superstructure that served their purposes and unhesitatingly modified or discarded those that did not.

As a result of these and other changes, the Spaniards and their creole successors came to monopolize control over the land, seizing many of the best lands abandoned by the massive native depopulation. Gradually, the land tenure system became polarized. One sector consisted of the large haciendas, worked by native peasant serfs in a variety of labor arrangements and governed by their new overlords according to hybrid Andean forms of Iberian paternalism. The other sector was made up of remnants of the essentially subsistence-based indigenous communities that persisted and endured. This left Peru with a legacy of one of the most unequal landholding arrangements in all of Latin America and a formidable obstacle to later development and modernization.

Peru

Peru - Colonial Administration

The expansion of a colonial administrative apparatus and bureaucracy paralleled the economic reorganization. The viceroyalty was divided into audiences ( audiencias), which were further subdivided into provinces or districts ( corregimientos) and finally municipalities, which included a city or town, governed by town councils cabildos), composed of the most prominent citizens, mostly encomenderos in the early years and later hacendados.

The most important royal official was the viceroy, who had a host of responsibilities ranging from general administration (particularly tax collection and construction of public works) and internal and external defense to support of the church and protection of the native population. He was surrounded by a number of other judicial, ecclesiastical, and treasury officials, who also reported to the Council of the Indies, the main governing body located in Spain. This configuration of royal officials, along with an official review of his tenure called the residencia, served as a check on viceregal power.

In the early years of the conquest, the crown was particularly concerned with preventing the conquistadors or encomenderos from establishing themselves as a feudal aristocracy capable of thwarting royal interests. Therefore, it moved quickly to quell the civil disturbances that had racked Peru immediately after the conquest and to decree the New Laws of 1542, which deprived the encomenderos and their heirs of their rights to native American goods and services.

The early administrative functions of the encomenderos over the indigenous population (protection and Christianization) were taken over by new state-appointed officials called correqidores de indios (governors of Indians). They were charged at the provincial level with the administration of justice, control of commercial relations between native Americans and Spaniards, and the collection of the tribute tax. The corregidores (Spanish magistrates) were assisted by curacas, members of the native elite, who had been used by the conquerors from the very beginning as mediators between the native population and the Europeans. Over time the corregidores used their office to accumulate wealth and power to dominate rural society, establishing mutual alliances with local and regional elites such as the curacas, native American functionaries, municipal officials, rural priests (doctrineros), landowners, merchants, miners, and others, as well as native and mestizo subordinates.

As the crown's political authority was consolidated in the second half of the sixteenth century, so too was its ability to regulate and control the colonial economy. Operating according to the mercantilistic strictures of the times, the crown sought to maximize investment in valuable export production, such as silver and later other mineral and agricultural commodities, while supplying the new colonial market with manufactured imports, so as to create a favorable balance of trade for the metropolis. However, the tightly regulated trading monopoly, headquartered in Seville, was not always able to provision the colonies effectively. Assadorian shows that most urban and mining demand, particularly among the laboring population, was met by internal Andean production (rough-hewn clothing, foodstuffs, yerba mate tea, chicha beer, and the like) from haciendas, indigenous communities, and textile factories ( obrajes). According to him, the value of these Andean products amounted to fully 60 to 70 percent of the value of silver exports and elite imports linking Peru and Europe. In any case, the crown was successful in managing the colonial export economy through the development of a bureaucratic and interventionist state, characterized by a plethora of mercantilistic rules that regulated the conduct of business and commerce. In doing so, Spain left both a mercantilist and export-oriented pattern and legacy of "development" in the Andes that has survived up to the present day, and which remains a problem of contemporary underdevelopment.

Peru

Peru - The Colonial Church

The crown, as elsewhere in the Americas, worked to solidify the Andean colonial order in tandem with the church to which it was tied by royal patronage dating from the late fifteenth century. Having accompanied Francisco Pizarro and his force during the conquest, the Roman Catholic friars proceeded zealously to carry out their mission to convert the indigenous peoples to Christianity. In this endeavor, the church came to play an important role in the acculturation of the natives, drawing them into the cultural orbit of the Spanish settlers. It also waged a constant war to extirpate native religious beliefs. Such efforts met with only partial success, as the syncretic nature of Andean Roman Catholicism today attests. With time, however, the evangelical mission of the church gave way to its regular ecclesiastical endeavors of ministering to the growing Spanish and creole population.

By the end of the century, the church was beginning to acquire important financial assets, particularly bequests of land and other wealth, that would consolidate its position as the most important economic power during the colonial period. At the same time, it assumed the primary role of educator, welfare provider, and, through the institution of the Inquisition, guardian of orthodoxy throughout the viceroyalty. Together, the church-state partnership served to consolidate and solidify the crown authority in Peru that, despite awesome problems of distance, rough terrain, and slow communications, endured almost three centuries of continuous and relatively stable rule.

Silver production, meanwhile, began to enter into a prolonged period of decline in the seventeenth century. This decline also slowed the important transatlantic trade while diminishing the importance of Lima as the economic hub of the viceregal economy. Annual silver output at Potos�, for example, fell in value from a little over 7 million pesos in 1600 to almost 4.5 million pesos in 1650 and finally to just under 2 million pesos in 1700. Falling silver production, the declining transatlantic trade, and the overall decline of Spain itself during the seventeenth century have long been interpreted by historians as causing a prolonged depression both in the viceroyalties of Peru and New Spain. However, economic historian Kenneth J. Andrien has challenged this view, maintaining that the Peruvian economy, rather than declining, underwent a major transition and restructuring. After silver production and the transatlantic trade eroded the export economy, they were replaced by more diversified, regionalized, and autonomous development of the agricultural and manufacturing sectors. Merchants, miners, and producers simply shifted their investments and entrepreneurial activities away from mining and the transatlantic trade into internal production and import-substituting opportunities, a trend already visible on a small scale by the end of the previous century. The result was a surprising degree of regional diversification that stabilized the viceregal economy during the seventeenth century.

This economic diversification was marked by the rise and expansion of the great estates or haciendas that were carved out of abandoned native land as a result of the demographic collapse. The precipitous decline of the native population was particularly severe along the coast and had the effect of opening up the fertile bottom lands of the river valleys to Spanish immigrants eager for land and farming opportunities. A variety of crops were raised: sugar and cotton along the northern coast; wheat and grains in the central valleys; grapes, olives, and sugar along the entire coast. The highlands, depending on geographic and climatic conditions, underwent a similar hacienda expansion and diversification of production. There, coca, potatoes, livestock, and other indigenous products were raised in addition to some coastal crops, such as sugar and cereals.

This transition toward internal diversification in the colony also included early manufacturing, although not to the extent of agrarian production. Textile manufacturing flourished in Cusco, Cajamarca, and Quito to meet popular demand for rough-hewn cotton and woolen garments. A growing intercolonial trade along the Pacific Coast involved the exchange of Peruvian and Mexican silver for oriental silks and porcelain. In addition, <"http://worldfacts.us/Peru-Arequipa.htm"> Arequipa and then Nazca and Ica became known for the production of fine wines and brandies. And throughout the viceroyalty, small-scale artisan industries supplied a range of lower-cost goods only sporadically available from Spain and Europe, which were now mired in the seventeenth-century depression.

If economic regionalization and diversification worked to stabilize the colonial economy during the seventeenth century, the benefits of such a trend did not, as it turned out, accrue to Madrid. The crown had derived enormous revenues from silver production and the transatlantic trade, which it was able to tax and collect relatively easily. The decline in silver production caused a precipitous fall in crown revenue, particularly in the second half of the seventeenth century. For example, revenue remittances to Spain dropped from an annual average of almost 1.5 million pesos in the 1630s to less than 128,000 pesos by the 1680s. The crown tried to restructure the tax system to conform to the new economic realities of seventeenth-century colonial production but was rebuffed by the recalcitrance of emerging local elites. They tenaciously resisted any new local levies on their production, while building alliances of mutual convenience and gain with local crown officials to defend their vested interests.

The situation further deteriorated, from the perspective of Spain, when Madrid began in 1633 to sell royal offices to the highest bidder, enabling self-interested creoles to penetrate and weaken the royal bureaucracy. The upshot was not only a sharp decline in vital crown revenues from Peru during the century, which further contributed to the decline of Spain itself, but an increasing loss of royal control over local creole oligarchies throughout the viceroyalty. Lamentably, the sale of public offices also had longer-term implications. The practice weakened any notion of disinterested public service and infused into the political culture the corrosive idea that office-holding was an opportunity for selfish, private gain rather than for the general public good.

If the economy of the viceroyalty reached a certain steady state during the seventeenth century, its population continued to decline. Estimated at around 3 million in 1650, the population of the viceroyalty finally reached its nadir at a little over 1 million inhabitants in 1798. It rose sharply to almost 2.5 million inhabitants by 1825. The 1792 census indicated an ethnic composition of 13 percent Spaniards, 56 percent native American, and 27 percent castas (mestizos), the latter category the fastest-growing group because of both acculturation and miscegenation between Spaniards and natives.

Demographic expansion and the revival of silver production, which had fallen sharply at the end of the seventeenth century, promoted a period of gradual economic growth from 1730 to 1770. The pace of growth then picked up in the last quarter of the eighteenth century, partly as a result of the so-called Bourbon reforms of 1764, named after a branch of the ruling French Bourbon family that ascended to the Spanish throne after the death of the last Habsburg in 1700.

In the second half of the eighteenth century, particularly during the reign of Charles III (1759-1788), Spain turned its reform efforts to Spanish America in a concerted effort to increase the revenue flow from its American empire. The aims of the program were to centralize and improve the structure of government, to create more efficient economic and financial machinery, and to defend the empire from foreign powers. For Peru, perhaps the most far-reaching change was the creation of a new viceroyalty in the R�o de la Plata (River Plate) region in 1776 that radically altered the geopolitical and economic balance in South America. Upper Peru was detached administratively from the old Viceroyalty of Peru, so that profits from Potos� no longer flowed to Lima and Lower Peru, but to Buenos Aires. With the rupture of the old Lima-Potos� circuit, Lima suffered an inevitable decline in prosperity and prestige, as did the southern highlands (Cusco, Arequipa, and Puno). The viceregal capital's status declined further from the general measures to introduce free trade within the empire. These measures stimulated the economic development of peripheral areas in northern South America (Venezuela) and southern South America (Argentina), ending Lima's former monopoly of South American trade.

As a result of these and other changes, the economic axis of Peru shifted northward to the central and northern Sierra and central coast. These areas benefited from the development of silver mining, particularly at Cerro de Pasco, which was spurred by a series of measures taken by the Bourbons to modernize and revitalize the industry. However, declining trade and production in the south, together with a rising tax burden levied by the Bourbon state, which fell heavily on the native peasantry, set the stage for the massive native American revolt that erupted with the T�pac Amaru rebellion in 1780-82.

Peru

Peru - Indigenous Rebellions

An upsurge in native discontent and rebellion had actually begun to occur in the eighteenth century. To survive their brutal subjugation, the indigenous peoples had early on adopted a variety of strategies but were never as passive as portrayed in the scholarly literature until recently. To endure, the native Americans did indeed have to adapt to Spanish domination. As often as not, however, they found ways of asserting their own interests.

After the conquest, the crown had assumed from the Incas patrimony over all native land, which it granted in usufruct to indigenous community families, in exchange for tribute payments and mita labor services. This system became the basis for a long-lasting alliance between the colonial state and the native communities, bolstered over the years by the elaboration of a large body of protective legislation. Crown officials, such as the corregidores de indios, were charged with the responsibility of protecting natives from abuse at the hands of the colonists, particularly the alienation of their land to private landholders. Nevertheless, the colonists and their native allies, the curacas, often in collusion with the corregidores and local priests, found ways of circumventing crown laws and gaining control of native American lands and labor. To counter such exploitation and to conserve their historical rights to the land, many native American leaders shrewdly resorted to the legal system. Litigation did not always suffice, of course, and Andean history is full of desperate native peasant rebellions.

The pace of these uprisings increased dramatically in the eighteenth century, with five in the 1740s, eleven in the 1750s, twenty in the 1760s, and twenty in the 1770s. Their underlying causes were largely economic. Land was becoming increasingly scarce in the communities because of illegal purchases by unscrupulous colonists at a time when the indigenous population was once again growing after the long, postconquest demographic decline. At the same time, the native peasantry felt the brunt of higher taxes levied by the crown, part of the general reform program initiated by Madrid in the second half of the eighteenth century. These increased tax burdens came at a time when the highland elite--corregidores, priests, curacas, and Hispanicized native landholders--was itself increasing the level of surplus extracted from the native American peasant economy. According to historian Nils P. Jacobsen, this apparent tightening of the colonial "screw" during the eighteenth century led to the "over-exploitation" of the native peasantry and the ensuing decades of indigenous rebellions.

The culmination of this protest came in 1780 when Jos� Gabriel Condorcanqui, a wealthy curaca and mestizo descendant of Inca ancestors who sympathized with the oppressed native peasantry, seized and executed a notoriously abusive corregidor near Cusco. Condorcanqui raised a ragtag army of tens of thousands of natives, castas, and even a few dissident creoles, assuming the name T�pac Amaru II after the last Inca, to whom he was related. Drawing on a rising tide of Andean millenarianism and nativism, T�pac Amaru II raised the specter of some kind of return to a mythic Incaic past among the indigenous masses at a time of increased economic hardship.

Captured by royalist forces in 1781, Condorcanqui was brought to trial and, like his namesake, cruelly executed, along with several relatives, in the main plaza in Cusco, as a warning to others. The rebellion continued, however, and even expanded into the Altiplano around Lake Titicaca under the leadership of his brother, Diego Crist�bal T�pac Amaru. It was finally suppressed in 1782, and in the following years the authorities undertook to carry out some of the reforms that the two native leaders had advocated.

Peru

Peru - INDEPENDENCE IMPOSED FROM WITHOUT

Despite the T�pac Amaru revolts, independence was slow to develop in the Viceroyalty of Peru. For one thing, Peru was a conservative, royalist stronghold where the potentially restless creole elites maintained a relatively privileged, if dependent, position in the old colonial system. At the same time, the "anti-white" manifestations of the T�pac Amaru revolt demonstrated that the indigenous masses could not easily be mobilized without posing a threat to the creole caste itself. Thus, when independence finally did come in 1824, it was largely a foreign imposition rather than a truly popular, indigenous, and nationalist movement. As historian David P. Werlich has aptly put it, "Peru's role in the drama of Latin American independence was largely that of an interested spectator until the final act."

What the spectator witnessed prior to 1820 was a civil war in the Americas that pitted dissident creole elites in favor of independence against royalists loyal to the crown and the old colonial order. The movement had erupted in reaction to Napoleon Bonaparte's invasion of Spain in 1808, which deposed Ferdinand VII and placed a usurper, Joseph Bonaparte, on the Spanish throne. In America this raised the question of the very political legitimacy of the colonial government. When juntas arose in favor of the captive Ferdinand in various South American capitals (except in Peru) the following year, even though of relatively short duration, they touched off a process toward eventual separation that ebbed and flowed throughout the continent over the next fifteen years. This process developed its greatest momentum at the periphery of Spanish power in South America--in what became Venezuela and Colombia in the north and the R�o de la Plata region, particularly Argentina, in the south.

Not until both movements converged in Peru during the latter phases of the revolt, specifically the 4,500-man expeditionary force led by General Jos� de San Mart�n that landed in Pisco in September 1820, was Spanish control of Peru seriously threatened. San Mart�n, the son of a Spanish army officer stationed in Argentina, had originally served in the Spanish army but returned to his native Argentina to join the rebellion. Once Argentine independence was achieved in 1814, San Mart�n conceived of the idea of liberating Peru by way of Chile. As commander of the 5,500-man Army of the Andes, half of which was composed of former black slaves, San Mart�n, in a spectacular military operation, crossed the Andes and liberated Chile in 1817. Three years later, his somewhat smaller army left Valpara�so for Peru in a fleet commanded by a former British admiral, Thomas Alexander Cochrane (Lord Dundonald).

Although some isolated stirrings for independence had manifested themselves earlier in Peru, San Mart�n's invasion persuaded the conservative creole intendant of Trujillo, Jos� Bernardo de Tagle y Portocarrero, that Peru's liberation was at hand and that he should proclaim independence. It was symptomatic of the conservative nature of the viceroyalty that the internal forces now declaring for independence were led by a leading creole aristocrat, the fourth marquis of Torre Tagle, whose monarchist sympathies for any future political order coincided with those of the Argentine liberator.

The defeat of the last bastion of royal power on the continent, however, proved a slow and arduous task. Although a number of other coastal cities quickly embraced the liberating army, San Mart�n was able to take Lima in July 1821 only when the viceroy decided to withdraw his considerable force to the Sierra, where he believed he could better make a stand. Shortly thereafter, on July 28, 1821, San Mart�n proclaimed Peru independent and then was named protector by an assembly of notables. However, a number of problems, not the least of which was a growing Peruvian resentment over the heavy-handed rule of the foreigner they dubbed "King Jos�," stalled the campaign to defeat the royalists. As a result, San Mart�n decided to seek aid from Sim�n Bol�var Palacios, who had liberated much of northern South America from Spanish power.

The two liberators met in a historic meeting in Guayaquil in mid-1822 to arrange the terms of a joint effort to complete the liberation of Peru. Bol�var refused to agree to a shared partnership in the Peruvian campaign, however, so a frustrated San Mart�n chose to resign his command and leave Peru for Chile and eventual exile in France. With significant help from San Mart�n's forces, Bol�var then proceeded to invade Peru, where he won the Battle of Jun�n in August 1824. But it remained for his trusted lieutenant, thirty-one-year-old General Antonio Jos� de Sucre Alcal�, to complete the task of Peruvian independence by defeating royalist forces at the hacienda of Ayacucho near Huamanga (a city later renamed Ayacucho) on December 9, 1824. This battle in the remote southern highlands effectively ended the long era of Spanish colonial rule in South America.

INSTABILITY AFTER INDEPENDENCE

Peru's transition from more than three centuries of colonial rule to nominal independence in 1824 under President Bol�var (1824-26) proved torturous and politically destablizing. Independence did little to alter the fundamental structures of inequality and underdevelopment based on colonialism and Andean neofeudalism. Essentially, independence represented the transfer of power from the Spanish mainlanders (peninsulares) to sectors of the elite creole class, whose aim was to preserve and enhance their privileged socioeconomic status. However, the new creole elite was unable to create a stable, new constitutional order to replace the crown monolith of church and state. Nor was it willing to restructure the social order in a way conducive to building a viable democratic, republican government. Ultimately, the problem was one of replacing the legitimacy of the old order with an entirely new one, something that many postcolonial regimes have had difficulty accomplishing.

Into the political vacuum left by the collapse of Spanish rule surged a particularly virulent form of Andean caudillismo. Caudillo strongmen, often officers from the liberation armies, managed to seize power through force of arms and the elaboration of extensive and intricate clientelistic alliances. Personalistic, arbitrary rule replaced the rule of law, while a prolonged and often byzantine struggle for power was waged at all levels of society. The upshot was internal political fragmentation and chronic political instability during the first two decades of the postindependence era. By one count, the country experienced at least twenty-four regime changes, averaging one per year between 1821 and 1845, and the constitution was rewritten six times.

This is not to say that larger political issues did not inform these conflicts. A revisionist study by historian Paul E. Gootenberg shows in great detail how the politics of trade (free or protectionist) and regionalism were central to the internecine caudillo struggles of the period. In this interpretation, nationalist elites--backing one caudillo or another--managed to outmaneuver and defeat liberal groups to maintain a largely protectionist, neomercantilistic, postcolonial regime until the advent of the guano boom at mid-century. This view stands in opposition to the dominant interpretation of the period, according to which unrestricted liberalism and free trade led to Peru's "dependency" on the international economy and the West.

However bewildering, the chaotic era of the caudillo can be divided into several distinct periods. In the first, Bol�var tried, unsuccessfully, to impose a centralist and utopian liberal government from Lima. When events in Colombia caused him to relinquish power and return to Bogot� in 1826, his departure left an immediate vacuum that numerous Peruvian strongmen would try to fill. One of the most successful in terms of tenure was the conservative General Agust�n Gamarra (1829-34) from Cusco, who managed to crush numerous rebellions and maintain power for five years. Then full-scale civil wars carried first General Luis de Orbegoso (1834-35) and then General Felipe Salaverry (1835-36) into the presidential palace for short terms. The power struggles reached such a chaotic state by the mid-1830s that General Andr�s de Santa Cruz y Calahumana marched into Peru from Bolivia to impose the Peru-Bolivia Confederation of 1836-39. This alliance upset the regional balance of power and caused Chile to raise an army to defeat Santa Cruz and restore the status quo ante, which, in effect, meant a resumption of factional conflict lasting well into the 1840s.

The descent into chronic political instability, coming immediately after the destructive wars for independence (1820- 24), accelerated Peru's general postindependence economic decline. During the 1820s, silver mining, the country's traditional engine of growth, collapsed, while massive capital flight resulted in large external deficits. By the early 1830s, the silver-mining industry began to recover, briefly climbing back to colonial levels of output in the early 1840s. Economic recovery was further enhanced in the 1840s as southern Peru began to export large quantities of wool, nitrates, and, increasingly, guano.

On the other hand, the large-scale importation of British textiles after independence virtually destroyed the production of native artisans and obrajes, which were unable to compete with their more technologically advanced and cost-efficient overseas competitors. For the most part, however, the economy continued in the immediate decades after independence to be characterized by a low level of marketable surplus from largely self-sufficient haciendas and native communities.

The expansion of exports during the 1840s did help, finally, to stabilize the Peruvian state, particularly under the statesmanlike, if autocratic, leadership of General Marshal Ram�n Castilla (1845-51, 1855-62). Castilla's rise to power, coming as it did at the onset of the guano boom, marked the beginning of an age of unparalleled economic growth and increasing political stability that effectively ended the country's postindependence decline. Indeed, to many observers, Peru during the so-called guano age (1845-70) seemed uniquely positioned to emerge as the preeminent country in all of South America.

Peru

Peru - THE GUANO ERA

Consolidation of the State

The guano boom, made possible by the droppings from millions of birds on the Chincha Islands, proved to be a veritable bonanza for Peru, beginning in the 1840s. By the time that this natural resource had been depleted three decades later, Peru had exported some 12 million tons of the fertilizer to Europe and North America, where it stimulated the commercial agricultural revolution. On the basis of a truly enormous flow of revenue to the state (nearly US$500 million), Peru was presented in the middle decades of the nineteenth century with a historic opportunity for development. Why this did not materialize, but rather became a classic case of boom-bust export dependence, has continued to be the subject of intense discussion and debate. Most analysts, however, concur with historian Magnus M�rner that "guano wealth was, on the whole, a developmental opportunity missed."

On the positive side, guano-led economic growth--on average 9 percent a year beginning in the 1840s--and burgeoning government coffers provided the basis for the consolidation of the state. With adequate revenues, Castilla was able to retire the internal and external debt and place the government on a sound financial footing for the first time since independence. That, in turn, shored up the country's credit rating abroad (which, however, in time proved to be a double-edged sword in the absence of fiscal restraint). It also enabled Castilla to abolish vestiges of the colonial past--slavery in 1854 and the onerous native tribute-- modernize the army, and centralize state power at the expense of local caudillos.

Peru

Peru - THE GUANO ERA - Failed Development

The guano bonanza also set in motion more negative trends. Castilla "nationalized" guano in order to maximize benefits to the state but in so doing reinforced aspects of the old colonial pattern of a mercantilist political economy. The state then consigned the commercialization of guano to certain favored private sectors based in Lima that had foreign connections. This created a nefarious and often collusive relationship between the state and a new "liberal" group of guano consignees.

Soon, this increasingly powerful liberal plutocracy succeeded in reorienting the country's trade policy away from the previous nationalist and protectionist era toward export-led growth and low tariffs. Capital investment derived from the guano boom and abroad flowed into the export sector, particularly sugar, cotton, and nitrate production. The coast now became the most economically dynamic region of the country, modernizing at a pace that outstripped the Sierra. Coastal export-led growth not only intensified the uneven and dualist nature of Peruvian development, but subjected the economy to the vicissitudes of world trade. Between 1840 and 1875, the value of exports surged from 6 million pesos to almost 32 million, while imports went from 4 to 24 million pesos. On the face of it, the liberal export model, based on guano, pulled Peru out of its postindependence economic stagnation and seemed dramatically successful. However, while great fortunes were accruing to the new coastal plutocracy, little thought was given to closing the historical inequalities of wealth and income or to fostering a national market for incipient home manufacturing that might have created the foundation for a more diversified and truly long-term economic development.

What proved a greater problem in the short term was the state's increasing reliance and ultimate dependence on foreign loans, secured by the guano deposits which, however, were a finite and increasingly depleted natural resource. These loans helped finance an overly ambitious railroad and road-building scheme in the 1860s designed to open up Peru's natural, resourcerich interior to exploitation. Under the direction of American railroad engineer Henry Meiggs (known as the "Yankee Pizarro"), Chinese coolies constructed a spectacular Andean railroad system over some of the most difficult topography in the world. But the cost of constructing some 1,240 kilometers of railroad, together with a litany of other state expenditures, caused Peru to jump from last to first place as the world's largest borrower on London money markets.

Peru also fought two brief but expensive wars. The first, in which Peru prevailed, was with Ecuador (1859-60) over disputed territory bordering the Amazon. However, Castilla failed to extract a definitive agreement from Ecuador that might have settled conclusively the border issue, so it continued to fester throughout the next century. More successful was the Peruvian victory in 1866 over Spain's attempts to seize control of the guano-rich Chincha Islands in a tragicomic venture to recapture some of its lost empire in South America.

By the 1870s, Peru's financial house of cards, constructed on guano, finally came tumbling down. As described by Gootenberg, "Under the combined weight of manic activity, unrestrained borrowing, dismal choice of developmental projects, the evaporation of guano, and gross fiscal mismanagement, Peru's state finally collapsed ..." Ironically, the financial crisis occurred during the presidency of Manuel Pardo (1872-76), the country's first elected civilian president since independence and leader of the fledgling antimilitary Civilista Party (Partido Civilista--PC).

By the 1870s, economic growth and greater political stability had created the conditions for the organization of the country's first political party. It was composed primarily of the plutocrats of the guano era, the newly rich merchants, planters, and businesspeople, who believed that the country could no longer afford to be governed by the habitual military "man on horseback." Rather, the new age of international trade, business, and finance needed the managerial skills that only civilian leadership could provide. Their candidate was the dynamic and cosmopolitan Pardo, who, at age thirty-seven, had already made a fortune in business and served with distinction as treasury minister and mayor of Lima. Who better, they asked, at a time when the government of Colonel Jos� Balta (1868-72) had sunk into a morass of corruption and incompetence, could clean up the government, deal with the mounting financial problems, and further develop the liberal export-model that so benefited their particular interests?

However, the election of the competent Pardo in 1872 and his ensuing austerity program were not enough to ward off the impending collapse. The worldwide depression of 1873 virtually sealed Peru's fate, and as Pardo's term drew to a close in 1876, the country was forced to default on its foreign debt. With social and political turmoil once again on the rise, the Civilistas found it expedient to turn to a military figure, Mariano Ignacio Prado (1865-67, 1876-79), who had rallied the country against the Spanish naval attack in 1865 and then served as president. He was reelected president in 1876 only to lead the country into a disastrous war with its southern neighbor Chile in 1879.

Peru

Peru - WAR WITH CHILE

The war with <"../chile/index.html">Chile developed over the disputed, nitrate-rich Atacama Desert. Neither Peru, nor its ally, <"../bolivia/index.html">Bolivia, in the regional balance of power against Chile, had been able to solidify its territorial claims in the desert, which left the rising power of Chile to assert its designs over the region. Chile chose to attack Bolivia after Bolivia broke the Treaty of 1866 between the two countries by raising taxes on the export of nitrates from the region, mainly controlled by Chilean companies. In response, Bolivia invoked its secret alliance with Peru, the Treaty of 1873, to go to war.

Peru was obligated, then, to enter a war for which it was woefully unprepared, particularly since the antimilitary Pardo government had sharply cut the defense budget. With the perspective of hindsight, the outcome with Peru's more powerful and better organized foe to the south was altogether predictable. This was especially true after Peru's initial defeat in the naval Battle of Iquique Bay, where it lost one of its two iron-clad warships. Five months later, it lost the other, allowing Chile to gain complete control of the sea lanes and thus to virtually dictate the pace of the war. Although the Peruvians fought the superior Chilean expeditionary forces doggedly thereafter, resorting to guerrilla action in the Sierra after the fall of Lima in 1881, they were finally forced to conclude a peace settlement in 1883. The Treaty of Anc�n ceded to Chile in perpetuity the nitrate-rich province of Tarapac� and provided that the provinces of Tacna and Arica would remain in Chilean possession for ten years, when a plebiscite would be held to decide their final fate. After repeated delays, both countries finally agreed in 1929, after outside mediation by the United States, to a compromise solution to the dispute by which Tacna would be returned to Peru and Chile would retain Arica. For Peru, defeat and dismemberment by Chile in war brought to a final disastrous conclusion an era that had begun so auspiciously in the early 1840s with the initial promise of guano-led development.

Peru

Peru - The New Militarism

After a period of intense civil strife similar to the political chaos during the immediate postindependence period half a century earlier, the armed forces, led by General Andr�s Avelina C�ceres (1886-90, 1894-95), succeeded in establishing a measure of order in the country. C�ceres, a Creole and hero of the guerrilla resistance to the Chilean occupation during the War of the Pacific, managed to win the presidency in 1886. He succeeded in imposing a general peace, first by crushing a native rebellion in the Sierra led by a former ally, the respected native American varayoc (leader) Pedro Pablo Atuspar�a. C�ceres then set about the task of reconstructing the country after its devastating defeat.

The centerpiece of his recovery program was the Grace Contract, a controversial proposal by a group of British bondholders to cancel Peru's foreign debt in return for the right to operate the country's railroad system for sixty-six years. The contract provoked great controversy between nationalists, who saw it as a sellout to foreign interests, and liberals, who argued that it would lay the basis for economic recovery by restoring Peru's investment and creditworthiness in the West. Finally approved by Congress in 1888, the Grace Contract, together with a robust recovery in silver production (US$35 million by 1895), laid the foundations for a revival of export-led growth.

Indeed, economic recovery would soon turn into a sustained, long-term period of growth. Nils Jacobsen has calculated that "Exports rose fourfold between the nadir of 1883 and 1910, from 1.4 to 6.2 million pounds sterling and may have doubled again until 1919; British and United States capital investments grew nearly tenfold between 1880 and 1919, from US$17 to US$161 million." However, he also notes that it was not until 1920 that the nation fully recovered from the losses sustained between the depression of 1873 and the postwar beginnings of recovery at the end of the 1880s. Once underway economic recovery inaugurated a long period of stable, civilian rule beginning in 1895.

Peru

Peru - The Aristocratic Republic

The Aristocratic Republic began with the popular "Revolution of 1895," led by the charismatic and irrepressible Jos� Nicol�s de Pi�rola (1895-99). He overthrew the increasingly dictatorial C�ceres, who had gained the presidency again in 1894 after having placed his crony Colonel Remigio Morales Berm�dez (1890-94) in power in 1890. Pi�rola, an aristocratic and patriarchal figure, was fond of saying that "when the people are in danger, they come to me." Although he had gained the intense enmity of the Civilistas in 1869 when, as minister of finance in the Balta government, he had transferred the lucrative guano consignment contract to the foreign firm of Dreyfus and Company of Paris, he now succeeded in forging an alliance with his former opponents. This began a period known as the Aristocratic Republic (1895- 1914), during which Peru was characterized not only by relative political harmony and rapid economic growth and modernization, but also by social and political change.

From the ruins of the War of the Pacific, new elites had emerged along the coast and coalesced to form a powerful oligarchy, based on the reemergence of sugar, cotton, and mining exports, as well as the reintegration of Peru into the international economy. Its political expression was the reconstituted Civilista Party, which had revived its antimilitary and proexport program during the period of intense national disillusion and introspection that followed the country's defeat in the war. By the time the term of Pi�rola's successor, Eduardo L�pez de Roma�a (1899-1903), came to an end, the Civilistas had cleverly managed to gain control of the national electoral process and proceeded to elect their own candidate and party leader, the astute Manuel Candamo (1903-1904), to the presidency. Thereafter, they virtually controlled the presidency up until World War I, although Candamo died a few months after assuming office. Elections, however, were restricted, subject to strict property and literacy qualifications, and more often than not manipulated by the incumbent Civilista regime.

The Civilistas were the architects of unprecedented political stability and economic growth, but they also set in motion profound social changes that would, in time, alter the political panorama. With the gradual advance of export capitalism, peasants migrated and became proletarians, laboring in industrial enclaves that arose not only in Lima, but in areas of the countryside as well. The traditional haciendas and small-scale mining complexes that could be connected to the international market gave way increasingly to modern agroindustrial plantations and mining enclaves. With the advent of World War I, Peru's international markets were temporarily disrupted and social unrest intensified, particularly in urban centers where a modern labor movement began to take shape.

Peru

Peru - Impact of World War I

The Civilistas, however, were unable to manage the new social forces that their policies unleashed. This first became apparent in 1912 when the millionaire businessman Guillermo Billinghurst (1912-14)--the reform-minded, populist former mayor of Lima--was able to organize a general strike to block the election of the official Civilista presidential candidate and force his own election by Congress. During his presidency, Billinghurst became embroiled in an increasingly bitter series of conflicts with Congress, ranging from proposed advanced social legislation to settlement of the Tacna-Arica dispute. When Congress opened impeachment hearings in 1914, Billinghurst threatened to arm the workers and forcibly dissolve Congress. This provoked the armed forces under Colonel Oscar Raimundo Benavides (1914-15, 1933-36, and 1936-39) to seize power.

The coup marked the beginning of a long-term alignment of the military with the oligarchy, whose interests and privileges it would defend up until the 1968 revolution of General Juan Velasco Alvarado (1968-75). It was also significant because it not only ended almost two decades of uninterrupted civilian rule, but, unlike past military interventions, was more institutional than personalist in character. Benavides was a product of Pi�rola's attempt to professionalize the armed forces under the tutelage of a French military mission, beginning in 1896, and therefore was uncomfortable in his new political role. Within a year, he arranged new elections that brought Jos� de Pardo y Barreda (1904-1908, 1915-19) to power.

A new round of economic problems, deepening social unrest, and powerful, new ideological currents toward the end of World War I, however, converged to bring a generation of Civilista rule to an end in 1919. The war had a roller coaster effect on the Peruvian economy. First, export markets were temporarily cut off, provoking recession. Then, when overseas trade was restored, stimulating demand among the combatants for Peru's primary products, an inflationary spiral saw the cost of living nearly double between 1913 and 1919.

This inflation had a particularly negative impact on the new working classes in Lima and elsewhere in the country. The number of workers had grown sharply since the turn of the century--by one count rising from 24,000, or 17 percent of the capital's population in 1908, to 44,000, or 20 percent of the population in 1920. Similar growth rates occurred outside of Lima in the export enclaves of sugar (30,000 workers), cotton (35,000), oil (22,500), and copper. The Cerro de Pasco copper mine alone had 25,500 workers. The growth and concentration of workers was accompanied by the spread of anarchic ideas before and during the war years, making the incipient labor movement increasingly militant. Violent strikes erupted on sugar plantations, beginning in 1910, and the first general strike in the country's history occurred a year later.

Radical new ideologies further fueled the growing social unrest in the country at the end of the war. The ideas of the Mexican and Russian revolutions, the former predating the latter, quickly spread radical new doctrines to the far corners of the world, including Peru. Closer to home, the indigenista (Indigenist) movement increasingly captured the imagination of a new generation of Peruvians, particularly urban, middle-class mestizos who were reexamining their roots in a changing Peru. Indigenismo (Indigenism) was promoted by a group of writers and artists who sought to rediscover and celebrate the virtues and values of Peru's glorious Incan past. Awareness of the indigenous masses was heightened at this time by another wave of native uprisings in the southern highlands. They were caused by the disruption and dislocation of traditional native American communities brought about by the opening of new international markets and reorganization of the wool trade in the region.

All of these social, economic, and intellectual trends came to a head at the end of the Pardo administration. In 1918-19 Pardo faced an unprecedented wave of strikes and labor mobilization that was joined by student unrest over university reform. The ensuing worker-student alliance catapulted a new generation of radical reformers, headed by V�ctor Ra�l Haya de la Torre--a young, charismatic student at San Marcos University--and Jos� Carlos Mari�tegui--a brilliant Lima journalist who defended the rights of the new, urban working class--to national prominence.

Peru

Peru - The Eleven-Year Rule

The immediate political beneficiary of this turmoil, however, was a dissident Civilista, former president Augusto B. Legu�a y Salcedo (1908-12, 1919-30), who had left the party after his first term. He ran as an independent in the 1919 elections on a reform platform that appealed to the emerging new middle and working classes. When he perceived a plot by the Civilistas to deny him the election, the diminutive but boundlessly energetic Legu�a (he stood only 1.5 meters tall and weighed a little over 45 kilograms) staged a preemptive coup and assumed the presidency.

Legu�a's eleven-year rule, known as the oncenio (1919- 30), began auspiciously enough with a progressive, new constitution in 1920 that enhanced the power of the state to carry out a number of popular social and economic reforms. The regime weathered a brief postwar recession and then generated considerable economic growth by opening the country to a flood of foreign loans and investment. This allowed Legu�a to replace the Civilista oligarchy with a new, if plutocratic, middle-class political base that prospered from state contracts and expansion of the government bureaucracy. However, it was not long into his regime that Legu�a's authoritarian and dictatorial tendencies appeared. He cracked down on labor and student militancy, purged the Congress of opposition, and amended the constitution so that he could run, unopposed, for reelection in 1924 and again in 1929.

Legu�a's popularity was further eroded as a result of a border dispute between Peru and Colombia involving territory in the rubber-tapping region between the R�o Caquet� and the northern watershed of the R�o Napo. Under the United Statesmediated Salom�n-Lozano Treaty of March 1922, which favored Colombia, the R�o Putumayo was established as the boundary between Colombia and Peru. Pressured by the United States to accept the unpopular treaty, Legu�a finally submitted the document to the Peruvian Congress in December 1927, and it was ratified. The treaty was also unpopular with Ecuador, which found itself surrounded on the east by Peru.

The orgy of financial excesses, which included widespread corruption and the massive build-up of the foreign debt, was brought to a sudden end by the Wall Street stock market crash of 1929 and ensuing worldwide depression. Legu�a's eleven-year rule, the longest in Peruvian history, collapsed a year later. Once again, the military intervened and overthrew Legu�a, who died in prison in 1932.

Meanwhile, the onset of the Great Depression galvanized the forces of the left. Before he died prematurely at the age of thirty-five in 1930, Mari�tegui founded the Peruvian Socialist Party (Partido Socialista Peruano--PSP), shortly to become the Peruvian Communist Party (Partido Comunista Peruano--PCP), which set about the task of political organizing after Legu�a's fall from power. Although a staunch Marxist who believed in the class struggle and the revolutionary role of the proletariat, Mari�tegui's main contribution was to recognize the revolutionary potential of Peru's native peasantry. He argued that Marxism could be welded to an indigenous Andean revolutionary tradition that included indigenismo, the long history of Andean peasant rebellion, and the labor movement.

Haya de la Torre returned to Peru from a long exile to organize the American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana--APRA), an anti-imperialist, continent-wide, revolutionary alliance, founded in Mexico in 1924. For Haya de la Torre, capitalism was still in its infancy in Peru and the proletariat too small and undeveloped to bring about a revolution against the Civilista oligarchy. For that to happen, he argued, the working classes must be joined to radicalized sectors of the new middle classes in a cross-class, revolutionary alliance akin to populism. Both parties--one from a Marxist and the other from a populist perspective--sought to organize and lead the new middle and working classes, now further dislocated and radicalized by the Great Depression. With his oratorical brilliance, personal magnetism, and national-populist message, Haya de la Torre was able to capture the bulk of these classes and to become a major figure in Peruvian politics until his death in 1980 at the age of eighty-six.

Peru

Peru - Impact of the Depression and World War II

After 1930 both the military, now firmly allied with the oligarchy, and the forces of the left, particularly APRA, became important new actors in Peruvian politics. This period (1930-68) has been characterized in political terms by sociologist Dennis Gilbert as operating under essentially a "tripartite" political system, with the military often ruling at the behest of the oligarchy to suppress the "unruly" masses represented by APRA and the PCP. Lieutenant Colonel Luis M. S�nchez Cerro and then General Benavides led another period of military rule during the turbulent 1930s.

In the presidential election of 1931, S�nchez Cerro (1931- 33), capitalizing on his popularity from having deposed the dictator Legu�a, barely defeated APRA's Haya de la Torre, who claimed to have been defrauded out of his first bid for office. In July 1932, APRA rose in a bloody popular rebellion in Trujillo, Haya de la Torre's hometown and an APRA stronghold, that resulted in the execution of some sixty army officers by the insurgents. Enraged, the army unleashed a brutal suppression that cost the lives of at least 1,000 Apristas (APRA members) and their sympathizers (partly from aerial bombing, used for the first time in South American history). Thus began what would become a virtual vendetta between the armed forces and APRA that would last for at least a generation and on several occasions prevented the party from coming to power.

Politically, the Trujillo uprising was followed shortly by another crisis, this time a border conflict with Colombia over disputed territory in the Let�cia region of the Amazon. Before it could be settled, S�nchez Cerro was assassinated in April 1933 by a militant Aprista, and Congress quickly elected former president Benavides to complete S�nchez Cerro's five-year term. Benavides managed to settle the thorny Let�cia dispute peacefully, with assistance from the League of Nations, when a Protocol of Peace, Friendship, and Cooperation was signed in May 1934 ratifying Colombia's original claim. After a disputed election in 1936, in which Haya de la Torre was prevented from running and which Benavides nullified with the reluctant consent of Congress, Benavides remained in power and extended his term until 1939.

During the 1930s, Peru's economy was one of the least affected by the Great Depression. Thanks to a relatively diversified range of exports, led by cotton and new industrial metals (particularly lead and zinc), the country began a rapid recovery of export earnings as early as 1933. As a result, unlike many other Latin American countries that adopted Keynesian and import-substitution industrialization measures to counteract the decline, Peru's policymakers made relatively few alterations in their long-term model of export-oriented growth.

Under S�nchez Cerro, Peru did take measures to reorganize its debt-ridden finances by inviting Edwin Kemmerer, a well-known United States financial consultant, to recommend reforms. Following his advice, Peru returned to the gold standard, but could not avoid declaring a moratorium on its US$180-million debt on April 1, 1931. For the next thirty years, Peru was barred from the United States capital market.

Benavides's policies combined strict economic orthodoxy, measures of limited social reform designed to attract the middle classes away from APRA, and repression against the left, particularly APRA. For much of the rest of the decade, APRA continued to be persecuted and remained underground. Almost from the moment APRA appeared, the party and Haya de la Torre had been attacked by the oligarchy as antimilitary, anticlerical, and "communistic." Indeed, the official reason often given for APRA's proscription was its "internationalism," because the party began as a continent-wide alliance "against Yankee imperialism"-- suggesting that it was somehow subversively un-Peruvian.

Haya de la Torre had also flirted with the Communists during his exile in the 1920s, and his early writings were influenced by a number of radical thinkers, including Marx. Nevertheless, the 1931 APRA program was essentially reformist, nationalist, and populist. It called, among other things, for a redistributive and interventionist state that would move to selectively nationalize land and industry. Although certainly radical from the perspective of the oligarchy, the program was designed to correct the historical inequality of wealth and income in Peru, as well as to reduce and bring under greater governmental control the large-scale foreign investment in the country that was high in comparison with other Andean nations.

The intensity of the oligarchy's attacks was also a response to the extreme rhetoric of APRA polemicists and reflected the polarized state of Peruvian society and politics during the depression. Both sides readily resorted to force and violence, as the bloody events of the 1930s readily attested--the 1932 Trujillo revolt, the spate of prominent political assassinations (including S�nchez Cerro and Antonio Mir� Quesada, publisher of El Comercio), and widespread imprisonment and torture of Apristas and their sympathizers. It also revealed the oligarchy's apprehension, indeed paranoia, at APRA's sustained attempt to mobilize the masses for the first time into the political arena. At bottom, Peru's richest, most powerful forty families perceived a direct challenge to their traditional privileges and absolute right to rule, a position they were not to yield easily.

When Benavides's extended term expired in 1939, Manuel Prado y Ugarteche (1939-45), a Lima banker from a prominent family and son of a former president, won the presidency. He was soon confronted with a border conflict with Ecuador that led to a brief war in 1941. After independence, Ecuador had been left without access to either the Amazon or the region's other major waterway, the R�o Mara��n, and thus without direct access to the Atlantic Ocean. In an effort to assert its territorial claims in a region near the R�o Mara��n in the Amazon Basin, Ecuador occupied militarily the town of Zarumilla along its southwestern border with Peru. However, the Peruvian Army (Ej�rcito Peruano-- EP) responded with a lightning victory against the Ecuadorian Army. At subsequent peace negotiations in Rio de Janeiro in 1942, Peru's ownership of most of the contested region was affirmed.

On the domestic side, Prado gradually moved to soften official opposition to APRA, as Haya de la Torre moved to moderate the party's program in response to the changing national and international environment brought on by World War II. For example, he no longer proposed to radically redistribute income, but instead proposed to create new wealth, and he replaced his earlier strident "anti-imperialism" directed against the United States with more favorable calls for democracy, foreign investment, and hemispheric harmony. As a result, in May 1945 Prado legalized the party that now reemerged on the political scene after thirteen years underground.

The Allied victory in World War II reinforced the relative democratic tendency in Peru, as Prado's term came to an end in 1945. Jos� Luis Bustamante y Rivero (1945-48), a liberal and prominent international jurist, was overwhelmingly elected president on the basis of an alliance with the now legal APRA. Responding to his more reform- and populist-oriented political base, Bustamante and his Aprista minister of economy moved Peru away from the strictly orthodox, free-market policies that had characterized his predecessors. Increasing the state's intervention in the economy in an effort to stimulate growth and redistribution, the new government embarked on a general fiscal expansion, increased wages, and established controls on prices and exchange rates. The policy, similar to APRA's later approach in the late 1980s, was neither well-conceived nor efficiently administered and came at a time when Peru's exports, after an initial upturn after the war, began to sag. This resulted in a surge of inflation and labor unrest that ultimately destabilized the government.

Bustamante also became embroiled in an escalating political conflict with the Aprista-controlled Congress, further weakening the administration. The political waters were also roiled in 1947 by the assassination by Aprista militants of Francisco Grana Garland, the socially prominent director of the conservative newspaper La Prensa. When a naval mutiny organized by elements of APRA broke out in 1948, the military, under pressure from the oligarchy, overthrew the government and installed General Manuel A. Odr�a (1948-50, 1950-56), hero of the 1941 war with Ecuador, as president.

Peru

Peru - Rural Stagnation and Social Mobilization

Odr�a imposed a personalistic dictatorship on the country and returned public policy to the familiar pattern of repression of the left and free-market orthodoxy. Indicative of the new regime's hostility toward APRA, Haya de la Torre, after seeking political asylum in the Embassy of Colombia in Lima in 1949, was prevented by the government from leaving the country. He remained a virtual prisoner in the embassy until his release into exile in 1954. However, along with such repression Odr�a cleverly sought to undermine APRA's popular support by establishing a dependent, paternalistic relationship with labor and the urban poor through a series of charity and social welfare measures.

At the same time, Odr�a's renewed emphasis on export-led growth coincided with a period of rising prices on the world market for the country's diverse commodities, engendered by the outbreak of the Korean War in 1950. Also, greater political stability brought increased national and foreign investment, particularly in the manufacturing sector. Indeed, this sector grew almost 8 percent annually between 1950 and 1967, increasing from 14 to 20 percent of gross domestic product (GDP). Overall, the economy experienced a prolonged period of strong, export-led growth, amounting on average to 5 percent a year during the same period.

Not all Peruvians, however, benefited from this period of sustained capitalist development, which tended to be regional and confined mainly to the more modernized coast. This uneven pattern of growth served to intensify the dualistic structure of the country by widening the historical gap between the Sierra and the coast. In the Sierra, the living standard of the bottom one- quarter of the population stagnated or fell during the twenty years after 1950. In fact, the Sierra had been losing ground economically to the modernizing forces operative on the coast ever since the 1920s. With income distribution steadily worsening, the Sierra experienced a period of intense social mobilization during the 1950s and 1960s.

This was manifested first in the intensification of rural- urban migration and then in a series of confrontations between peasants and landowners. The fundamental causes of these confrontations were numerous. Population growth, which had almost doubled nationally between 1900 and 1940 (3.7 million to 7 million), increased rapidly to 13.6 million by 1970. This turned the labor market from a state of chronic historical scarcity to one of abundant surplus. With arable land constant and locked into the system of latifundios, ownership-to-area ratios deteriorated sharply, increasing peasant pressures on the land.

Peru's land-tenure system remained one of the most unequal in Latin America. In 1958 the country had a high coefficient of 0.88 on the Gini index, which measures land concentration on a scale of 0 to 1. Figures for the same year show that 2 percent of the country's landowners controlled 69 percent of arable land. Conversely, 83 percent of landholders holding no more than 5 hectares controlled only 6 percent of arable land. Finally, the Sierra's terms of trade in agricultural foodstuffs steadily declined because of the state's urban bias in food pricing policy, which kept farm prices artificially low.

Many peasants opted to migrate to the coast, where most of the economic and job growth was occurring. The population of metropolitan Lima, in particular, soared. While standing at slightly over 500,000 in 1940, it increased threefold to over 1.6 million in 1961 and nearly doubled again by 1981 to more than 4.1 million. The capital became increasingly ringed with squalid barriadas (shantytowns) of urban migrants, putting pressure on the liberal state, long accustomed to ignoring the funding of government services to the poor.

Those peasants who chose to remain in the Sierra did not remain passive in the face of their declining circumstances but became increasingly organized and militant. A wave of strikes and land invasions swept over the Sierra during the 1950s and 1960s as campesinos demanded access to land. Tensions grew especially in the Convenci�n and Lares region of the high jungle near Cusco, where Hugo Blanco, a Quechua-speaking Trotskyite and former student leader, mobilized peasants in a militant confrontation with local gamonales.

While economic stagnation prodded peasant mobilization in the Sierra, economic growth along the coast produced other important social changes. The postwar period of industrialization, urbanization, and general economic growth created a new middle and professional class that altered the prevailing political panorama. These new middle sectors formed the social base for two new political parties--Popular Action (Acci�n Popular--AP) and the Christian Democratic Party (Partido Dem�crata Cristiano-- PDC)--that emerged in the 1950s and 1960s to challenge the oligarchy with a moderate, democratic reform program. Emphasizing modernization and development within a somewhat more activist state framework, they posed a new challenge to the old left, particularly APRA.

For its part, APRA accelerated its rightward tendency. It entered into what many saw as an unholy alliance (dubbed the convivencia, or living together) with its old enemy, the oligarchy, by agreeing to support the candidacy of conservative Manuel Prado y Ugarteche in the 1956 elections, in return for legal recognition. As a result, many new voters became disillusioned with APRA and flocked to support the charismatic reformer Fernando Bela�nde Terry (1963-68, 1980-85), the founder of the AP. Although Prado won, six years later the army intervened when its old enemy, Haya de la Torre (back from six years of exile), still managed, if barely, to defeat the upstart Bela�nde by less than one percentage point in the 1962 elections. A surprisingly reform-minded junta of the armed forces headed by General Ricardo P�rez Godoy held power for a year (1962-63) and then convoked new elections. This time Bela�nde, in alliance with the Christian Democrats, defeated Haya de la Torre and became president.

Bela�nde's government, riding the crest of the social and political discontent of the period, ushered in a period of reform at a time when United States president John F. Kennedy's Alliance for Progress was also awakening widespread expectations for reform throughout Latin America. Bela�nde tried to diffuse the growing unrest in the highlands through a three- pronged approach: modest agrarian reform, colonization projects in the high jungle or monta�a, and the construction of the north- south Jungle Border Highway (la carretera marginal de la selva or la marginal), running the entire length of the country along the jungle fringe. The basic thrust of the Agrarian Reform Law of 1969, which was substantially watered down by a conservative coalition in Congress between the APRA and the National Odriist Union (Uni�n Nacional Odri�sta--UNO), was to open access to new lands and production opportunities, rather than dismantle the traditional latifundio system. However, this plan failed to quiet peasant discontent, which by 1965 helped fuel a Castroite guerrilla movement, the Movement of the Revolutionary Left (Movimiento de la Izquierda Revolucionaria-- MIR), led by rebellious Apristas on the left who were unhappy with the party's alliance with the country's most conservative forces.

In this context of increasing mobilization and radicalization, Bela�nde lost his reformist zeal and called on the army to put down the guerrilla movement with force. Opting for a more technocratic orientation palatable to his urban middle class base, Bela�nde, an architect and urban planner by training, embarked on a large number of construction projects, including irrigation, transportation, and housing, while also investing heavily in education. Such initiatives were made possible, in part, by the economic boost provided by the dramatic expansion of the fishmeal industry. Aided by new technologies and the abundant fishing grounds off the coast, fishmeal production soared. By 1962 Peru became the leading fishing nation in the world, and fishmeal accounted for fully one-third of the country's exports.

Bela�nde's educational expansion dramatically increased the number of universities and graduates. But, however laudable, this policy tended over time to swell recruits for the growing number of left-wing parties, as economic opportunities diminished in the face of an end, in the late 1960s, of the long cycle of export- led economic expansion. Indeed, economic problems spelled trouble for Bela�nde as he approached the end of his term. Faced with a growing balance-of-payments problem, he was forced to devalue the sol in 1967. He also seemed to many nationalists to capitulate to foreign capital in a final settlement in 1968 of a controversial and long-festering dispute with the International Petroleum Company (IPC) over La Brea y Pari�as oil fields in northern Peru. With public discontent growing, the armed forces, led by General Velasco Alvarado, overthrew the Bela�nde government in 1968 and proceeded to undertake an unexpected and unprecedented series of reforms.

Peru

Peru - Military Reform from Above

The military intervention and its reformist orientation represented changes both in the armed forces and Peruvian society. Within the armed forces, the social origins of the officer corps no longer mirrored the background and outlook of the creole upper classes, which had historically inclined the officers to follow the mandate of the oligarchy. Reflective of the social changes and mobility that were occurring in society at large, officers now exhibited middle- and lower middle class, provincial, mestizo or cholo backgrounds. General Velasco, a cholo himself, had grown up in humble circumstances in the northern department of Piura and purportedly went to school barefoot.

Moreover, this generation of officers had fought and defeated the guerrilla movements in the backward Sierra. In the process, they had come to the realization that internal peace in Peru depended not so much on force of arms, but on implementing structural reforms that would relieve the burden of chronic poverty and underdevelopment in the region. In short, development, they concluded, was the best guarantee for national security. The Bela�nde government had originally held out the promise of reform and development, but had failed. The military attributed that failure, at least in part, to flaws in the democratic political system that had enabled the opposition to block and stalemate reform initiatives in Congress. As nationalists, they also abhorred the proposed pact with the IPC and looked askance at stories of widespread corruption in the Bela�nde government.

Velasco moved immediately to implement a radical reform program, which seemed, ironically, to embody much of the original 1931 program of the army's old nemesis, APRA. His first act was to expropriate the large agroindustrial plantations along the coast. The agrarian reform that followed, the most extensive in Latin America outside of Cuba, proceeded to destroy the economic base of power of the old ruling classes, the export oligarchy, and its gamonal allies in the Sierra. By 1975 half of all arable land had been transferred, in the form of various types of cooperatives, to over 350,000 families comprising about onefourth of the rural population, mainly estate workers and renters (colonos). Agricultural output tended to maintain its rather low pre-reform levels, however, and the reform still left out an estimated 1 million seasonal workers and only marginally benefited campesinos in the native communities (about 40 percent of the rural population).

The Velasco regime also moved to dismantle the liberal, export model of development that had reached its limits after the long postwar expansion. The state now assumed, for the first time in history, a major role in the development process. Its immediate target was the foreign-dominated sector, which during the 1960s had attained a commanding position in the economy. At the end of the Bela�nde government in 1968, three-quarters of mining, one-half of manufacturing, two-thirds of the commercial banking system, and one-third of the fishing industry were under direct foreign control.

Velasco reversed this situation. By 1975 state enterprises accounted for more than half of mining output, two-thirds of the banking system, a fifth of industrial production, and half of total productive investment. Velasco's overall development strategy was to shift from a laissez-faire to a "mixed" economy, to replace export-led development with import-substitution industrialization. At the same time, the state implemented a series of social measures designed to protect workers and redistribute income in order to expand the domestic market.

In the realm of foreign policy, the Velasco regime undertook a number of important initiatives. Peru became a driving force not only behind the creation of an Andean Pact in 1969 to establish a common market with coordinated trade and investment policies, but also in the movement of nonaligned countries of the Third World. Reflecting a desire to end its perceived dependency economically and politically on the United States, the Velasco government also moved to diversify its foreign relations by making trade and aid pacts with the Soviet Union and East European countries, as well as with Japan and West European nations. Finally, Peru succeeded during the 1970s in establishing its international claims to a 303-kilometer territorial limit in the Pacific Ocean.

By the time Velasco was replaced on August 29, 1975, by the more conservative General Francisco Morales Berm�dez Cerrutti (1975-80), his reform program was already weakening. Natural calamities, the world oil embargo of 1973, increasing international indebtedness (Velasco had borrowed heavily abroad to replace lost investment capital to finance his reforms), overbureaucratization , and general mismanagement had undermined early economic growth and triggered a serious inflationary spiral. At the same time, Velasco, suffering from terminal cancer, had become increasingly personalistic and autocratic, undermining the institutional character of military rule. Unwilling to expand his initial popularity through party politics, he had created a series of mass organizations, tied to the state in typically corporatist and patrimonialist fashion, in order to mobilize support and control the pace of reform. However, despite his rhetoric to create truly popular, democratic organizations, he manipulated them from above in an increasingly arbitrary manner. What had begun as an unusual populist type of military experiment evolved into a form of what political scientist Guillermo O'Donnell calls "bureaucratic authoritarianism," with increasingly authoritarian and personalistic characteristics that were manifested in "Velasquismo."

Velasco's replacement, General Morales Berm�dez, spent most of his term implementing an economic austerity program to stem the surge of inflation. Public opinion increasingly turned against the rule of the armed forces, which it blamed for the country's economic troubles, widespread corruption, and mismanagement of the government, as well as the general excesses of the "revolution." Consequently, Morales Berm�dez prepared to return the country to the democratic process.

Elections were held in 1978 for a Constituent Assembly empowered to rewrite the constitution. Although Bela�nde's AP boycotted the election, an array of newly constituted leftist parties won an unprecedented 36 percent of the vote, with much of the remainder going to APRA. The Assembly, under the leadership of the aging and terminally ill Velasco (who would die in 1980), completed the new document in 1979. Meanwhile, the popularity of former president Bela�nde underwent a revival. Bela�nde was decisively reelected president in 1980, with 45 percent of the vote, for a term of five years.

Peru

Peru - Return to Democratic Rule

Bela�nde inherited a country that was vastly different from the one he had governed in the 1960s. Gone was the old export oligarchy and its gamonal allies in the Sierra, and the extent of foreign investment in the economy had been sharply reduced. In their place, Velasco had borrowed enormous sums from foreign banks and so expanded the state that by 1980 it accounted for 36 percent of national production, double its 1968 share. The informal sector of small- and medium-sized businesses outside the legal, formal economy had also proliferated.

By 1980 Bela�nde's earlier reforming zeal had substantially waned, replaced by a decidedly more conservative orientation to government. A team of advisers and technocrats, many with experience in international financial organizations, returned home to install a neoliberal economic program that emphasized privatization of state-run business and, once again, export-led growth. In an effort to increase agricultural production, which had declined as a result of the agrarian reform, Bela�nde sharply reduced food subsidies, allowing producer prices to rise.

However, just as Velasco's ambitious reforms of the early 1970s were eroded by the 1973 worldwide oil crisis, Bela�nde's export strategy was shattered by a series of natural calamities and a sharp plunge in international commodity prices to their lowest levels since the Great Depression. By 1983 production had fallen 12 percent and wages 20 percent in real terms while inflation once again surged. Unemployment and underemployment was rampant, affecting perhaps two-thirds of the work force and causing the minister of finance to declare the country in "the worst economic crisis of the century." Again, the government opted to borrow heavily in international money markets, after having severely criticized the previous regime for ballooning the foreign debt. Peru's total foreign debt swelled from US$9.6 billion in 1980 to US$13 billion by the end of Bela�nde's term.

The economic collapse of the early 1980s, continuing the long-term cyclical decline begun in the late l960s, brought into sharp focus the country's social deterioration, particularly in the more isolated and backward regions of the Sierra. Infant mortality rose to 120 per 1,000 births (230 in some remote areas), life expectancy for males dropped to 58 compared with 64 in neighboring Chile, average daily caloric intake fell below minimum United Nations standards, upwards of 60 percent of children under five years of age were malnourished, and underemployment and unemployment were rampant. Such conditions were a breeding ground for social and political discontent, which erupted with a vengeance in 1980 with the appearance of the Shining Path (Sendero Luminoso--SL).

Founded in the remote and impoverished department of Ayacucho by Abim�el Guzm�n Reynoso, a philosophy professor at the University of Huamanga, the SL blended the ideas of MarxismLeninism , Maoism, and those of Jos� Carlos Mari�tegui, Peru's major Marxist theoretician. Taking advantage of the return to democratic rule, the deepening economic crisis, the failure of the Velasco-era reforms, and a generalized vacuum of authority in parts of the Sierra with the collapse of gamonal rule, the SL unleashed a virulent and highly effective campaign of terror and subversion that caught the Bela�nde government by surprise.

After first choosing to ignore the SL and then relying on an ineffective national police response, Bela�nde reluctantly turned to the army to try to suppress the rebels. However, that proved extremely difficult to do. The SL expanded its original base in Ayacucho north along the Andean spine and eventually into Lima and other cities, gaining young recruits frustrated by their dismal prospects for a better future. To further complicate pacification efforts, another rival guerrilla group, the T�pac Amaru Revolutionary Movement (Movimiento Revolucionario T�pac Amaru--MRTA), emerged in Lima.

Counterinsurgency techniques, often applied indiscriminately by the armed forces, resulted in severe human rights violations against the civilian population and only created more recruits for the SL. By the end of Bela�nde's term in 1985, over 6,000 Peruvians had died from the violence, and over US$1 billion in property damage had resulted. Strongly criticized by international human rights organizations, Bela�nde nevertheless continued to rely on military solutions, rather than other emergency social or developmental measures that might have served to get at some of the fundamental, underlying socioeconomic causes of the insurgency.

The severe internal social and political strife, not to mention the deteriorating economic conditions, manifested in the Shining Path insurgency may have contributed in 1981 to a flareup of the border dispute with Ecuador in the disputed Mara��n region. Possibly looking to divert public attention away from internal problems, both countries engaged in a brief, five-day border skirmish on the eve of the thirty-ninth anniversary of the signing of the 1942 Protocol of Rio de Janeiro (Rio Protocol). Peruvian forces prevailed, and although a ceasefire was quickly declared, it did nothing to resolve the two opposing positions on the issue of the disputed territory. Essentially, Peru continued to adhere to the Rio Protocol by which Ecuador had recognized Peruvian claims. On the other hand, Ecuador continued to argue that the Rio Protocol should be renegotiated, a position first taken by President Velasco Ibarra in 1960 and adhered to by all subsequent Ecuadorian presidents.

Along with these internal and external conflicts, Bela�nde also confronted a rising tide of drug trafficking during his term. Coca had been cultivated in the Andes since pre-Columbian times. The Inca elite and clergy used it for certain ceremonies, believing that it possessed magical powers. After the conquest, coca chewing, which suppresses hunger and relieves pain and cold, became common among the oppressed indigenous peasantry to deal with the hardships imposed by the new colonial regime, particularly in the mines. The practice has continued, with an estimated 15 percent of the population chewing coca on a daily basis by 1990.

As a result of widespread cocaine consumption in the United States and Europe, demand for coca from the Andes soared during the late 1970s. Peru and Bolivia became the largest coca producers in the world, accounting for roughly four-fifths of the production in South America. Although originally produced mainly in five highland departments, Peruvian production has become increasingly concentrated in the Upper Huallaga Valley, located some 379 kilometers northeast of Lima. Peasant growers, some 70,000 in the valley alone, are estimated to receive upwards of US$240 million annually for their crop from traffickers--mainly Colombians who oversee the processing, transportation, and smuggling operations to foreign countries, principally the United States.

After the cultivation of coca for narcotics uses was made illegal in 1978, efforts to curtail production were intensified by the Bela�nde government, under pressure from the United States. Attempts were made to substitute other cash crops while police units sought to eradicate the plant. This tactic only served to alienate the growers and to set the stage for the spread of the SL movement into the area in 1983-84 as erstwhile defenders of the growers. By 1985 the SL had become an armed presence in the region, defending the growers not only from the state, but also from the extortionist tactics of the traffickers. The SL, however, became one of the wealthiest guerrilla movements in modern history by collecting an estimated US$30 million in "taxes" from Colombian traffickers who controlled the drug trade.

As the guerrilla war raged on and with the economy in disarray, Bela�nde had little to show at the end of his term, except perhaps the reinstitution of the democratic process. During his term, political parties had reemerged across the entire political spectrum and vigorously competed to represent their various constituencies. With all his problems, Bela�nde had also managed to maintain press and other freedoms (marred, however, by increasing human rights violations) and to observe the parliamentary process. In 1985 he managed to complete his elected term, only the second time that this had happened in forty years.

After presiding over a free election, Bela�nde turned the presidency over to populist Alan Garc�a P�rez of APRA who had swept to victory with 48 percent of the vote. Bela�nde's own party went down to a resounding defeat with only 6 percent of the vote, while the Marxist United Left (Izquierda Unida--IU) received 23 percent. The elections revealed a decided swing to the left by the Peruvian electorate. For APRA Garc�a's victory was the culmination of more than half a century of political travail and struggle.

Peru

Peru - Geography

Natural Systems and Human Life

Peru is a complex amalgam of ancient and modern cultures, populations, conflicts, questions, and dilemmas. The land itself offers great challenges. With 1,285,216 square kilometers, Peru is the eighteenth largest nation in area in the world and the fourth largest Latin American nation. It ranked fifth in population in the region, with 22,767,543 inhabitants in July 1992. Centered in the heart of the 8,900-kilometer-long Andean range, Peru's geography and climates, although similar to those of its Andean neighbors, form their own peculiar conditions, making the region one of the world's most heterogeneous and dynamic. Peru's principal natural features are its desert coast; the forty great snow-covered peaks over 6,000 meters in altitude, and the mountain ranges they anchor; Lake Titicaca, which is shared with Bolivia, and at 3,809 meters above sea level the world's highest navigable lake; and the vast web of tropical rivers like the Ucayali, Mara��n, and Huallaga, which join to form the Amazon above Peru's "Atlantic" port of Iquitos.

The Costa, Sierra, and Selva (selva--jungle), each comprising a different and sharply contrasting environment, form the major terrestrial regions of the country. Each area, however, contains special ecological niches and microclimates generated by ocean currents, the wide range of Andean altitudes, solar angles and slopes, and the configurations of the vast Amazonian area. As a consequence of these complexities, thirty-four ecological subregions have been identified.

Although there is great diversity in native fauna, relatively few animals lent themselves to the process of domestication in prehistoric times. Consequently, at the time of European arrival the only large domesticated animals were the llamas and alpacas. Unfortunately, llamas and alpacas are not powerful beasts, serving only as light pack animals and for meat and wool. The absence of great draft animals played a key role in the evolution of human societies in Peru because without animals such as horses, oxen, camels, and donkeys, which powered the wheels of development in the Old World, human energy in Peru and elsewhere in the Americas could not be augmented significantly. As far as is known, the enormous potential in hydrologic resources in preconquest times was tapped only for agricultural irrigation and basic domestic usage. Through the elaborate use of massive irrigation works and terracing, which appeared in both highland and coastal valleys in pre-Chav�n periods (1000 B.C.), the environment of the Andes was opened for intensive human settlement, population growth, and the emergence of regional states.

The development of Andean agriculture started about 9,000 years ago, when inhabitants began experimenting with the rich vegetation they utilized as food gatherers. Each ecological niche, or "floor," begins about 500 to 1,000 meters vertically above the last, forming a minutely graduated and specialized environment for life. The central Andean area is, thus, one of the world's most complex biospheres, which human efforts made into one of the important prehistoric centers of plant domestication. Native domesticated plants number in the hundreds and include many varieties of such important crops as potatoes, maize (corn), lima beans, peppers, yucca or manioc, cotton, squashes and gourds, pineapples, avocado, and coca, which were unknown in the Old World. Dozens of varieties of fruits and other products, despite their attractive qualities, are little known outside the Andean region.

Conquest of the Aztec alliance in Mexico and the Inca Empire (Tawantinsuyu) in the Andes gave impetus to one of the most important features of the colonial process, the transfer of wealth, products, and disease between the hemispheres. Andean plant resources, of course, contributed significantly to life in Europe, Africa, and Asia. Although attention has usually focused on the hoards of Inca gold and silver shipped to Spain and thus funneled to the rest of Europe, the value of Andean potatoes to the European economy and diet probably far exceeded that of precious metals. By the same token, the Spanish conquerors introduced into the New World wheat, barley, rice, and other grains; vegetables like carrots; sugarcane; tea and coffee; and many fruits, such as grapes, oranges, and olives. The addition of Old World cattle, hogs, sheep, goats, chickens, and draft animals--horses, donkeys, and oxen--vastly increased Andean resources and altered work methods, diets, and health. The trade-off in terms of disease was one-sided; measles, malaria, yellow fever, cholera, whooping cough, influenza, smallpox, and bubonic plague, carried by rats, arrived with each ship from Europe. The impact of these diseases was more devastating than any other aspect of the conquest, and they remain major scourges for the majority of Peruvians.

<>The Coastal Region
<>The Andean Highlands
<>High-Altitude Adaptations
<>The Amazonian Tropics
<>The Maritime Region
<>Natural Disasters and Their Impact
<>People, Property, and Farming

Peru

Peru - The Coastal Region

Peru's coast is a bleak, often rocky, and mountainous desert that runs from Chile to Ecuador, punctuated by fifty-two small rivers that descend through steep, arid mountains and empty into the Pacific. The Costa is a strange land of great dunes and rolling expanses of barren sand, at once a desert but with periods of humidity as high as 90 percent in the winter from June to September, when temperatures in Lima average about 16 degrees Celsius. Temperatures along the coast rise near the equator in the north, where the summer can be blazingly hot, and fall to cooler levels in the south. If climatic conditions are right, there can be a sudden burst of delicate plant life at certain places on the lunar-like landscape, made possible by the heavy mist. Normally, however, the mist is only sufficient to dampen the air, and the sand remains bleakly sterile. These conditions greatly favor the preservation of delicate archaeological remains. The environment also facilitates human habitation and housing because the climate is benign and the lack of rain eases the need for water-tight roofing.

Humans have lived for over 10,000 years in the larger coastal valleys, fishing, hunting, and gathering along the rich shoreline, as well as domesticating crops and inventing irrigation systems. The largest of these littoral oases became the sites of towns, cities, religious centers, and the seats of ancient nations. Although migration from the highlands and other provincial regions has long occurred, the movement of people to the Costa was greatly stimulated by the growth of the fishing industry, which transformed villages and towns into frontier-like cities, such as Chimbote. In the early 1990s, over 53 percent of the nation's people lived in these sharply delimited coastal valleys. As the population becomes ever more concentrated in the coastal urban centers, people increasingly overrun the rich and ancient irrigated agricultural lands, such as those in the R�mac Valley where greater Lima is situated, and the Chicama Valley at the site of the city of Trujillo. Although the region contains 160,500 square kilometers of land area, only 4 percent, or 6,900 square kilometers of it, is arable. By 1990 population growth had increased the density of habitation to 1,715 persons for each square kilometer of arable land. Throughout all the coastal valleys, human settlements remain totally dependent on the waters that flow from the Andes along canals and aqueducts first designed and built 3,000 years ago. Here, uncontrolled and unplanned urban growth competes directly with scarce and vitally needed agricultural land, steadily removing it from productive use.

Peru

Peru - The Andean Highlands

The Sierra is the commanding feature of Peru's territory, reaching heights up to 6,768 meters. Hundreds of permanently glaciated and snowcapped peaks tower over the valleys. The steep, desiccated Pacific flank of the Andes supports only a sparse population in villages located at infrequent springs and seepages. In contrast, tropical forests blanket the eastern side of the Andes as high as 2,100 meters. Between these extremes, in the shadows of the great snowpeaks, lie the most populous highland ecological zones: the intermontane valleys (kichwa) and the higher uplands and grassy puna or Altiplano plateaus. Approximately 36 percent of the population lives in thousands of small villages and hamlets that constitute the rural hinterland for the regional capitals and trading centers. Over 15 percent of Peruvians live at altitudes between 2,000 and 3,000 meters, 20 percent live between 3,000 and 4,000 meters, and 1 percent regularly reside at altitudes over 4,000 meters.

Although rich in mineral resources, such as copper, lead, silver, iron, and zinc, which are mined at altitudes as high as 5,152 meters, the Andes are endowed with limited usable land. The highlands encompass 34 percent of the national territory, or 437,000 square kilometers, but only 4.5 percent of the highlands, or 19,665 square kilometers, is arable and cultivated. Nevertheless, this area constitutes more than half the nation's productive land. About 93,120 square kilometers of the Sierra is natural pasture over 4,000 meters in altitude, too high for agriculture. The 4.5 percent of arable land, therefore, has fairly dense populations, particularly in Puno, Cajamarca, and in valleys such as the Mantaro in Jun�n Department and Callej�n de Huaylas in Ancash Department. The highland provinces have a population density of 460 persons per square kilometer of habitable, arable land.

The best areas for cultivation are the valleys, which range from 2,000 to 3,500 meters in altitude. Although many valleys have limited water supplies, others, due to glacial runoffs, enjoy abundant water for irrigation. In the protected valleys, the dry climate is temperate, with no frost or great heat. In the high plateau or puna regions above 3,939 meters, the climate is cold and severe, often going below freezing at night and seldom rising above 16� C by day. A myriad of native tubers thrives at altitudes from 2,800 meters to almost 4,000 meters, including over 4,000 known varieties of the potato, oca, and olluco, as well as grains such as quinoa. The hardy native llamas and alpacas thrive on the tough ichu grass of the punas; European sheep and cattle, when adapted, do well at lesser altitudes.

For the Peruvians, there are two basic Andean seasons, the rainy winter from October through April and the dry summer in the remaining months. Crops are harvested according to type throughout the year, with potatoes and other native tubers brought in during the middle to late winter and grains during the dry season. The torrential rains of the winter months frequently cause severe landslides and avalanches, called huaycos, throughout the Andean region, damaging irrigation canals, roads, and even destroying villages and cities. In the valley of Callej�n de Huaylas, the city of Huaraz (Huar�s) was partially destroyed in 1941 by just such a catastrophe, an event repeated a few kilometers away in 1962, when the town of Ranrahirca was annihilated by a huayco that killed about 3,000 people.

The formidable terrain of the Andes, where the land may fall away from 4,848 meters to 545 meters and then rise to 6,666 meters in a space of 48 kilometers as the condor flies, poses a ubiquitous challenge to any modern means of transport. Thus, the Andean region was not penetrated by wheeled vehicles until railroads were built in the latter half of the nineteenth century. Moreover, most of the nation did not see wheels until the dirt road system was under construction in the 1920s. To do this, President Augusto B. Legu�a y Salcedo (1908-12, 1919-30) revived a national system of draft labor harkening back to the Inca's conscripted labor force, or mita, used for road and bridge building in ancient times.

Peru

Peru - High-Altitude Adaptations

As with the Himalayan mountains, the Andes impose severe conditions and many limitations on life. Consequently, Andean people are physically adapted to the heights in special ways. In contrast to persons born and raised at sea level, those living at Andean altitudes 2,500 meters or more above sea level have as much as 25 percent more blood that is more viscous and richer in red cells, a heart that is proportionately larger, and specially adapted, larger lungs, with an enhanced capacity to take in oxygen from the rare atmosphere. Biological adaptations have permitted the native highlanders to work efficiently and survive successfully in the Andean altitudes for 20,000 years.

The first important scientific research on high-altitude biology was undertaken by the Peruvian physician-scientist Carlos Monge Medrano in the 1920s. He showed that coca-leaf chewing played a role in aiding the metabolism in high-altitude populations. More recent studies have shown that coca chewing significantly aids in metabolizing high carbohydrate foods like potatoes, yucca, and corn, which are traditional staples in the Andean region, thus providing the chewer with more rapid energy input from his meals. Supposed narcotic effects of coca-leaf chewing are nil because enzymes in the mouth convert coca into atropine-like substances, unlike those involved in cocaine. Anthropologists Catherine Allen and Enrique Mayer have also demonstrated the central role traditional coca use plays in Andean communities as a medicine, ritual substance, and an element in economic and social affairs.

Peru

Peru - The Amazonian Tropics

The Selva, which includes the humid tropics of the Amazon jungle and rivers, covers about 63 percent of Peru but contains only about 11 percent of the country's population. The region begins high in the eastern Andean cloud forests, called the ceja de monta�a (eyebrow of the jungle), or Mont�na or Selva Alta, and descends with the rush of silt-laden Andean rivers--such as the Mara�on, Huallaga, Apur�mac, and Urubamba--to the relatively flat, densely forested, Amazonian plain. These torrential rivers unite as they flow, forming the Amazon before reaching the burgeoning city of Iquitos. Regarded as an exotic land of mystery and promise throughout much of the twentieth century, the Selva has been seen in Peru as the great hope for future development, wealth, and the fulfillment of national destiny. As such, it became President Fernando Bela�nde Terry's "Holy Grail" as he devoted the energies of his two administrations (1963-68, 1980-85) to promoting colonization, development schemes, and highway construction across the Monta�a and into the tropical domain.

Human settlements in the Amazonian region are invariably riverine, clustering at the edges of the hundreds of rivers and oxbow lakes that in natural conditions are virtual fish farms in terms of their productivity. The streams and rivers constitute a serpentine network of pathways plied by boats and canoes that provide the basic transport through the forest. Here, the Shipibo, Ash�ninka (Campa), Aguaruna, and other tribes lived in relative independence from the Peruvian state until the midtwentieth century. Although the native people have cleverly exploited the extraordinary riverine environment for at least 5,000 years, both they and the natural system have been under relentless pressures of population, extractive industries, and the conversion of forest into farm and pasture. Amazonian forest resources are enormous but not inexhaustible. Amazonian timber is prized worldwide, but when the great cedar, rosewood, and mahogany reserves are cut, they are rarely replaced.

Peru's tropics are also a fabled source for traditional medicinal plants, such as the four types of domesticated coca, which are prized through the entire Andean and upper Amazonian sphere, having been widely traded and bartered for 4,500 years. Unfortunately, coca's traditional uses as a beneficial drug for dietary, medical, and ritual purposes, and, during the twentieth century, as a primary flavoring for cola drinks have given way to illegal plantings on a large scale for cocaine production. All of the new, illegal plantations are located in Peru's upper Amazon drainage and have seriously deteriorated the forests, soils, and general environment where they exist. The use of chemical sprays and the widespread clearing of vegetation to eliminate illegal planting has also created unfortunate and extensive environmental side-effects.

In the early 1990s, the Selva was still considered an important potential source for new discoveries in the medicinal, fuel, and mineral fields. Petroleum and gas reserves have been known to exist in several areas, but remained difficult to exploit. And, in Peru's southern Amazonian department of Madre de Dios, a gold rush has been in progress since the 1970s, producing a frontier boom effect with various negative repercussions. The new population attracted to the region has placed numerous pressures on the native tribal communities and their lands.

All of these intrusions into the fragile Amazon tropics were fraught with environmental questions and human dilemmas of major scale. In this poorly understood environment, hopes and development programs have often gone awry at enormous cost. In their wake, serious problems of deforestation, population displacement, challenge to the tribal rights of the native "keepers of the forest," endless infrastructural costs, and the explosive expansion of cocaine capitalism have emerged. In the 1963-90 period, Peru looked to the tropics as the solution for socioeconomic problems that it did not want to confront in the highlands. In the early 1990s, it was faced with paradox and quandary in both areas.

Peru

Peru - The Maritime Region

A maritime region constitutes a fourth significant environment within the Peruvian domain. The waters off the Peruvian coast are swept by the Humboldt (or Peruvian) Current that rises in the frigid Antarctic and runs strongly northward, cooling the arid South American coastline before curving into the central Pacific near the Peru-Ecuador border. Vast shoals of anchovy, tuna, and several varieties of other valued fish are carried in this stream, making it one of the world's richest commercial fisheries. The importance of guano has diminished since the rise of the anchovy fishing industry. The billions of anchovy trapped by modern flotillas of purse seiners guided by spotter planes and electronic sounding devices are turned into fish meal for fertilizer and numerous other industrial uses. Exports of fish meal and fish products are of critical importance for Peru's economy. For this reason, changes in the environmental patterns on the coast or in the adjacent ocean have devastating consequences for employment and, therefore, national stability. The periodic advent of a warm current flowing south, known as El Ni�o (The Christ-child), and intensive fishing that has temporarily depleted the seemingly boundless stocks of anchovy have caused major difficulties for Peru.

Peru

Peru - Natural Disasters and Their Impact

Severely affecting conditions on both land and sea, El Ni�o is yet another peculiarity of the Peruvian environment. This stream of equatorial water periodically forces its way southward against the shoreline, pushing the cold Humboldt Current and its vast fishery deeper and westward into the ocean, while bringing in exotic equatorial species. El Ni�o is not benign, even though named after the Christ-child because it has often appeared in December. Instead, over cycles of fifteen to twenty-five years, El Ni�o disrupts the normally rainless coastal climate and produces heavy rainfalls, floods, and consequent damages. The reverse occurs in the highlands, where drought-like conditions occur, often over two-to-five-year periods, reducing agricultural production. The impact of this phenomenon came to be more fully understood only in the 1980s, and it has been shown to influence Atlantic hurricane patterns as well. Moreover, archaeological research by Michael Edward Moseley has demonstrated that El Ni�o turbulence probably led to the heretofore unexplained collapses of apparently prosperous ancient Andean societies. From 1981 to 1984, Peruvians experienced severe destruction from this perturbation; the destruction clearly contributed to the rapidly deteriorating socioeconomic conditions in the country.

Another major environmental variable is the activity of the Nazca plate, which abuts Peru along the Pacific shore and constantly forces the continental land mass upward. Although volcanism created numerous thermal springs throughout the coastal and highland region and created such striking volcanic cones as El Misti, which overlooks the city of Arequipa, it also poses the constant threat of severe earthquakes.

In the Sierra, much farmland rests at the foot of great, unstable mountains, such as those overlooking the spectacular valley of Callej�n de Huaylas, which is replete with the evidence of past avalanches and seismic upheaval. It is also one of the most productive agricultural areas in the highlands. On May 31, 1970, an earthquake measuring 7.7 on the Richter scale staggered the department of Ancash and adjacent areas. A block of glacial ice split from the top of El Huascar�n, Peru's tallest mountain (6,768 meters), and buried the provincial capital of Yungay under a blanket of mud and rock, killing about 5,000 people. In the affected region, 70,000 persons were killed, 140,000 injured, and over 500,000 left homeless. It was the most destructive disaster in the history of the Western Hemisphere and had major negative effects on the national economy and government reform programs at a critical moment during the administration of Juan Velasco Alvarado (1968-75).

In precolonial times, the Incas and their ancestors had long grappled with the seismic problem. Many archaeologists have attributed the special trapezoidal character of Inca architecture to precautions against earthquakes. The first name of the founder of the Inca empire, Pachacuti Inca Yupanqui, means "cataclysm." The Incas understood their terrain. Since 1568 there have been over 70 significant earthquakes in Peru, or one every six years, although each year the country registers as many as 200 lesser quakes. As an expression of their own powerlessness in the face of such events, many Peruvians pray for protection to a series of earthquake saints. Among such saints are Cusco's Se�or de los Temblores (Lord of the Tremors), revered since a disaster in 1650, and the Se�or de los Milagros (Lord of Miracles), worshipped in Lima and nationwide since a quake in 1655.

Peru

Peru - People, Property, and Farming

Human adaptation to the high altitudes, coastal desert, and tropical jungles requires specialized knowledge and skill in addition to the physiological adjustments noted to cope with altitudinal stress. Over the course of thousands of years, people invented elaborate irrigation systems to take advantage of the potential productivity in the coastal valleys. Visitors to even the smallest coastal valleys can still find elaborate evidence of these ancient public works. Many of these networks are still in use or form the basis of rebuilt systems that provide water to the lucrative commercial agriculture now practiced. Both in prehistoric times and now, the key to social and political affairs in these and all other coastal valleys is access to water, effective irrigation technology, and the ability to keep a large labor force at the task of construction and maintenance.

The coastal valleys from colonial times to the present have been dominated by extensive systems of plantation agriculture, with powerful elite families in control of the land and water rights. The principal crops harvested under these regimes are sugarcane and cotton, with a mixture of other crops, such as grapes and citrus, also being planted. Before the Agrarian Reform Law of 1969, about 80 percent of the arable coastal land was owned by 1.7 percent of the property owners. Despite the dominance of the great coastal estates, there were, and still are, thousands of smaller farms surrounding them, producing a wide variety of food crops for the urban markets and for subsistence. Since land reform, ownership of the great plantations has been transferred to the employees and workers, who operate them as a type of cooperative. The coastal farmland is extremely valuable because of the generous climate, flat lands, and usually reliable irrigation waters, without which nothing would succeed. These advantageous conditions are supplemented by the use of excellent guano and fish-meal fertilizers. As a result, the productive coastal land, amounting to only 3.8 percent of the national total, including pasture and forest, yields a reported 50 percent of the gross agricultural product.

In the intermontane Andean valleys, there is a wide variety of farming opportunities. The best lands are those that benefit year round from the constant flow of melting glacial waters. Most farming depends on the advent of the rains, and farmers must plan their affairs accordingly. In many areas, farmers have built reservoir and canal systems, but, for the most part, they must time their planting to coincide with the capricious onset of the rainy season. Where irrigation works are operative, as on the coast, farmers are joined in water-management districts and irrigation boards, which govern water flow, canal maintenance, and enforcement of complex water rights, rules, and customs.

Over 70 percent of the smallest farms are less than five hectares in size, with the great majority of them found in the Andean highlands. A typical peasant household with such a small property cannot harvest anything but the most minimum subsistence from it and inevitably must supplement household earnings from other sources, with most or all family members working. The adequacy of each small farm and its dispersed chacras (plots of land used for gardening) of course varies with water supply, altitude, soil fertility, and other local factors. The best irrigated farmland in the kichwa valleys tends to be highly subdivided in the competition for a rural subsistence base. The largest land holdings are the property of corporate communities, such as the numerous Peasant Communities (Comunidades Campesinas) and Peasant Groups (Grupos Campesinos). In 1990 these official forms of common entitlement, as opposed to individual private ownership, accounted for over 60 percent of pasture lands, much of which lies in the punas of the southern Andes.

The ecological mandates of the Andean environment thus structure the day-to-day farming activities of all highlanders and the character of their domestic economies. Research conducted by anthropologist Stephen B. Brush showed how peasant farmers traditionally have utilized the different ecological niches at their disposal. At the highest altitudes of production, animals are grazed and specialized tubers grown; at the intermediate altitudes grains like wheat, barley, rye, and corn, as well as pulses, such as broad beans, peas, and lentils, are sown along with a wide variety of vegetables, including onions, squashes, carrots, hot rocoto peppers, and tomatoes. At still lower levels, tropical fruits and crops prosper.

Some communities have direct access to all of these production environments, whereas others may be confined to one zone only. Traditionally, the strategy of families, the basic social units of production and consumption, is to arrange access to products from the different zones through the social mechanisms available to them. Particular chacras serve as virtual chess pieces as families buy and sell property, or enter into sharecropping arrangements in order to obtain access to specific cropping areas. Marital arrangements may also be made with specific properties in mind. Thus, the system of small farms ( minifundios) will invariably involve a confusing but systematic pattern of holdings.

In Huaylas, Ancash Department, for example, farmers owning small but highly productive irrigated chacras at about 2,700 meters cultivate corn, vegetables, and alfalfa. Slightly higher irrigated property is devoted to grains, and higher still, chacras are devoted to potatoes, oca and other tubers, and quinoa. Above the cultivated land and on the nonirrigated hillsides, cattle and sheep are grazed on communally held open ranges and puna. In the deep protected gorges and canyons on the fringes of the district, small chacras at altitudes of 1,500 meters produce a variety of tropical crops. Consequently, within a relatively small area a single family may own or have usufruct rights to a checkerboard of small chacras, whose total area does not exceed four or five hectares, but whose range of production provides a diverse nutritional subsistence base.

For this reason, attempts to unify smallholdings to make them more efficient can likely yield the opposite effect in terms of the household economy. This is, in fact, what happened in many areas after the Agrarian Reform Law of 1969 was implemented, prohibiting sharecropping and restricting the geographical range of ownership in order to achieve hoped for economies of scale. After the initial attempts to enforce the new, well-meaning laws, the minifundio system began to reemerge as peasants discovered ways to circumvent its restrictions, which inadvertently limited their ownership and use of chacras to a narrow range of ecological zones.

In other areas, such as those described by Enrique Mayer in the Hu�nuco region, the relatively compressed ecology found in Huaylas gives way to one spread out over the eastern flanks of the Andes, stretching down eventually to the Selva. In contrast to the confining peasant farms of Huaylas, farmers in the Hu�nuco region develop barter and trade relations across the production zones, permitting them to exchange their farm produce, such as potatoes, for other crops grown at different levels.

Although most Andean farmers are independent producers, there are various types of large holdings, of which three are particularly important: the manorial estate, the minifundio and family farm, and the corporate community holding. Historically, the most significant holdings relative to socioeconomic power were the great manorial properties known as haciendas, which averaged over 1,200 hectares in size but often exceeded 20,000 hectares prior to being eliminated during the 1969-75 land reform. At the time the land reform began, 1.3 percent of the highland farm owners held over 75 percent of the farm and grazing lands, while 96 percent of the farmers held ownership of but 8.5 percent of the farm area. The corporate community holdings are in the form of land held in common title by a Peasant Community. After the land reform, groups of communities were organized as corporate bodies by the government to enable them, in theory, to combine lands and resources to gain the advantages of an economy of scale. These organizations and the Peasant Communities, reportedly numbering 5,500 in 1991, assumed titles to the haciendas expropriated during the reform period.

By contrast, the population living in the Selva is engaged in a totally different set of agroecological patterns of activity. The native peoples of the tropics, living in riverine settings for the greater part, depend on fishing, hunting, and selective gathering from the forest. They also engage in highly effective horticulture, usually in a system known as slash-and-burn. Long thought to be a destructive and inefficient method of farming, studies have revealed it to be quite the contrary. In this system, the tribal farmer usually exploits a particular plot for only a three-to-five-year period and then abandons it to open another fresh area. This practice allows the vegetation and thin soil to recuperate before the farmer returns to use it again in ten to twenty years. Another facet of the system is that all fields are used in a pattern of multicropping. In this approach, as many as fifteen different crops are intermingled in such a way that each plant complements the others in terms of nutrients used or returned to the soil. The arrangement also provides a disadvantageous environment for plant diseases and insect pests. Another common horticultural system employed along the river banks in the dry season takes advantage of extensive silt deposits left by the seasonal floods. On such open plots, farmers tend to monocrop or, at least, to reduce the number of varieties sown.

Peru

Peru - The Society

PERUVIANNESS (PERUANIDAD) has often been debated by Peruvian authors who evoke patriotism, faith, cultural mystique, and other allegedly intrinsic qualities of nationality. Peru, however, is not to be characterized as a homogeneous culture, nor its people as one people. Peruvians speak of their differences with certainty, referring to lo criollo ("of the Creole"), lo serrano ("of the highlander"), and other special traits by which social groups and regions are stereotyped. The national creole identity incorporates a combination of unique associations and ways of doing things a la criolla.

The dominant national culture emanating from Lima is urban, bureaucratic, street-oriented, and fast-paced. Yet the identity that goes with being a lime�o (a Limean) is also profoundly provincial in its own way. In the first half of the twentieth century, the Lima cultural character transcended class values and ranks and to a significant degree was identified as the national Peruvian culture. The great migrations from 1950 to 1990 altered that personality substantially. By 1991 the national character, dominated by the urban style of Lima, was complicated by millions of serranos, whose rural Spanish contrasts with the fast slurring and slang of the Lima dialect. Highland music is heard twenty-four hours a day on more than a dozen Lima radio stations that exalt the regional cultures, give announcements in Quechua, and relentlessly advertise the new businesses of the migrant entrepreneurs. The places mentioned and the activities announced are in greater Lima, but unknown to the lime�o. The new lime�o, while acquiring creole traits, nevertheless presents another face, one with which the Lima native does not closely relate and does not understand because few true lime�os actually visit the provinces, much less stay there to live. Nor do they visit the sprawling "young towns" ( pueblos jovenes) of squatters that are disdained or even feared. Urban Hispanic Peruvians have always been caught in the bind of contradiction, at once claiming the glory of the Inca past while refusing to accept its descendants or their traditions as legitimately belonging in the modern state. In the early 1990s, however, this change was taking place, desired or not.

Events have been forcing the alteration of traditions in both the coast (Costa) and highlands (Sierra) in a process that would again transform the country, as did both conquest and independence. The peoples of the Altiplano and valleys of the Andean heartland--long exploited and neglected and driven both by real needs and the quest for respect and equity--have surged over the country in a "reconquest" of Peru, stamping it with their image.

For respect and equity to develop, the white and mestizo elites will have to yield the social and economic space for change and reconcile themselves to institutional changes that provide fairness in life opportunities. Up to 1991, the highlanders (serranos) had seized that space from a reluctant nation by aggressive migration, establishing vast squatter settlements and pushing hard against the walls of power. As with the Agrarian Reform Law of 1969, the elites and special interests that benefited from traditional socioeconomic arrangements had protected these old ways with few concessions to wider public and national needs. For the cholo, Peru's generic "everyman," to gain a place of respect, well-being, and a sense of progress will be a test of endurance, experiment, and sacrifice as painful and difficult as any in the hemisphere. With the agony of terroristic and revengeful revolution perpetrated by the Shining Path (Sendero Luminoso--SL) and the T�pac Amaru Revolutionary Movement (Movimiento Revolucionario T�pac Amaru--MRTA), on the one hand, and the chaotic collapse of the institutional formal economy, on the other, average Peruvians from all social groups were caught between the proverbial "sword and wall."

Just as the highland migration to the urban coast was the major avenue for social change through the 1980s, increasing numbers of Peruvians sought to continue this journey away from the dilemmas of their homeland by moving to other countries. About 700,000 had emigrated by 1991, with over 40 percent going to the United States. Catholic University of Peru professor Te�filo Altamirano has documented the new currents of mobility that went from Lima, Jun�n, and Ancash to every state in the United States, with heaviest concentrations in New Jersey, New York, California, and Florida. In 1990 about 300,000 of Altamirano's compatriots (paisanos) lived--either legally or not--in the United States.

In the early 1990s, Peru's identity as a nation and people was becoming more complex and cosmopolitan, while the distinctive traits of the culture were being broadened, disseminated, and shared by an increasingly wider group of citizens. The crosscurrents to these trends were configured around the struggle for retention and status of the native cultures: the Quechua, the Aymara, and the many tribal societies of Amazonia. Whereas tens of thousands deliberately embarked on life-plans of social mobility by altering their persona from indio (Indian) to cholo to mestizo in moving from the native American caste to upper-middle class, a new alternative for some was to use ethnic loyalty and identity as a device of empowerment and, thus, an avenue for socioeconomic change. How Peruvian institutions, state policy, and traditions adjusted to these trends would determine what Peruvians as a society would be like in the twenty-first century.

Peru

Peru - Population

The special configuration and character of Peru's modern society owe their start to the Spanish conquest, when Europeans and Africans came into sexual contact with what had been a racially homogeneous population. In its own conquests, however, the Inca Empire had embraced a wide range of cultural groups that spoke over fifty languages and practiced diverse customs. As a multicultural state, the Incas had grappled with the problem of tribal diversity and competition, often resolving their disagreements with conquered peoples through violence and repression. Another Inca solution to such dilemmas was to forcibly relocate recalcitrant populations to more governable locations and replace them with trustworthy communities. Peoples resettled in this manner were called mitimaes, and the process contributed significantly to the complications of Andean ethnicity. In addition to these measures, the Incas often took the children of local leaders and other key personages as hostages to guarantee political tranquility. In some ways, then, the Inca experience harshly prefigured the Spanish conquest.

With the arrival of conquering migrants from the Old World, new mixed races were born. The initial importance of these offspring of whites and Africans with native American mothers was minimal, however, because of the "great dying" of the indigenous population instigated by European diseases and the subsequent collapse and demoralization of the native society and economy. The continuous impact of repressive colonial regimes did not permit any resurgence of native vitality or organization, although there were a number of rebellions and revolts. Under these conditions, Peru reached its nadir in 1796, near the end of the colonial period, when fewer than 1.1 million inhabitants were censured. This figure marked a fall from an estimated pre-Columbian total of at least 16 million, although some scholars think the figure may be twice that number, and others less. Peru recovered slowly, only slightly exceeding its minimally estimated preconquest population size in 1981.

The critical factors in population growth since the midnineteenth century have been the rapid emergence of the mestizo population, which grew at a rate of over 3 percent per year throughout the colonial period until the 1980s, and the reduction but not the disappearance of sweeping epidemic diseases. Another factor that played a role in this increase was the influx of foreign migrants from Europe, and especially from China and, more recently, Japan. The rate of growth became very high during the twentieth century owing to a number of factors. The then dominant mestizo and other mixed populations were obviously more resistant to the diseases to which the native peoples, lacking natural immunities, succumbed. The mestizos also enjoyed important cultural advantages in a colonialist society, which actively discriminated against the native population on racial and ethnic grounds. From conquest to the present, it has been the fate of the native peoples not to prosper.

The Spanish colonial policy regarding population management in the viceroyalty, as throughout the hemisphere, was to create bureaucratic order through an official hierarchy of caste, with obligations and privileges attached thereto. The system attempted to keep people sorted out according to genealogical history and place of birth. Thus, white Spaniards ranked first, followed by all others: a male offspring of a Spaniard and a native American was called a mestizo, or cholo; of a Spaniard and African, a mulatto; of an African and a native American, a zambo; of a mestizo and indio, a salta atr�s (jump backward). The order encompassed all of the combinations and recombinations of race, with over fifty commonly used terms, many of which--such as mestizo, mulatto, zambo, cholo, criollo, indio, negro (Negro or black), and blanco (white)--survive in common usage today. For both white Europeans and Africans, there were two categories--those born in the Old World were called peninsulares and bosales, respectively, whereas those of both races born in Peru were called criollos (Creoles). In the case of whites, the fact that Creoles were lower in rank than their peninsular counterparts was resented and contributed eventually to the overthrow of colonial rule.

There were six basic castes in Colonial Peru: Spaniards, native Americans, mestizos, Negroes, mulattos, and zambos. In theory, these categories defined a person's place of residence and occupation, taxes, obligations to the viceroyalty under the mita, which churches and masses could be attended, and which parts of the towns could be entered. Sumptuary laws determined the nature of one's clothing as well, and prohibited natives in particular from riding horses, using buttons, having weapons, and even owning mirrors and playing stringed instruments. Such a system was hard, if not impossible, to keep on track, and its rules and powers were irregularly applied. Nevertheless, vestiges of the colonial social caste system and its associated behavior and attitudes linger in present-day Peruvian society in many ways.

Although largely replaced along the coast by mestizos, Afro-Peruvians, and Chinese laborers, the native peoples survived biologically as well as culturally in the highlands. Their survival was attributed to many factors: the sheer numbers of their original population; their relative isolation, resulting in part from the collapse of the society and inefficiency of the colonial regimes; and this assumption of the kind of passive defensive posture of silence and apparent submissive behavior that has been characterized as a "weapon of the weak." In numerous cases, communities managed to place themselves under the wing of religious orders and, ironically, the hacienda system, with its conditions of serfdom. This developed with the demise of the system of serfdom called the encomienda and the state monopoly of selling goods to the native peoples called the repartimiento. If nothing more, by becoming serfs on the haciendas, native Americans were defended by landlords, who were inclined to protect their peons from exploitation by others and especially from having to serve in the mita de minas (the mine labor draft). Consequently, the bastions of highland indigenous culture have been the small, isolated mountain villages and hamlets; dispersed farming and pastoral communities; and haciendas, where populations were encapsulated under protective exploitation and ignored by their absentee landlords.

<>Settlement Patterns
<>Urban, Rural, and Regional Populations
<>Demography of Growth, Migration, and Work
<>Regionalism and Political Divisions

Peru

Peru - Settlement Patterns

In pre-Columbian eras, the highland population was ensconced on ridges, hillsides, and other locations that did not interfere with farming priorities. Large ceremonial buildings, temples, or administrative centers, were, however, located in central locations, often apart from the residences of average persons. By the time of conquest, the Incas had rearranged settlements to suit their own vision of administrative needs in conquered areas. Thus, Inca planners and architects constructed special towns and cities, such as Hu�nuco Viejo, to handle their needs.

With Viceroy Francisco Toledo y Figueroa's colonial reforms in the late sixteenth century, however, the traditional Andean settlement patterns were drastically altered through the establishment of settlements called reductions ( reducciones), which were located in the less advantageous areas, and the founding of new Spanish towns and cities. The reduction system forced native Americans to settle in nucleated villages and towns, which were easily controlled by their masters, the encomenderos, as well as clergy and regional governors ( corregidores de indios). The Spaniards also established their own towns, which were off limits to most native peoples except for occasional religious celebrations or for work assignments. These towns eventually became home to the dominant mestizo. As the municipal and economic centers of each district and province, these mestizo towns (poblachos mestizos) remain the dominant settlements, constituting the district and provincial capitals throughout the country. Today, virtually all of the small towns and villages throughout the highlands are either the product of the reduction system of forced relocation or were established as Spanish colonial municipalities.

The striking similarities among settlements in terms of design and architecture are no accident. Virtually all settlements thus exhibit the grid pattern or model of rectangular blocks arranged around a town square, universally known as the arms plaza (plaza de armas). This design reflects the military dimension of the conquest culture, the central place in an encampment being where armaments were kept when not deployed. By direct analogy, it also demonstrates and symbolizes central authority and power. Typically, then, the most important residents lived close to the plaza de armas, in the most prominent houses. Status, conferred by birth, race, and occupation, was confirmed by a central urban residence. In modern practice, status has continued to be reflected in a hierarchy of urban residence descending from Lima to the departmental, provincial, and district capitals. No one of importance or power is rural.

Peru

Peru - Urban, Rural, and Regional Populations

The change in distribution from rural to urban has been profound: the urban population rose from 47 percent in 1961 to an estimated 70 percent in 1990. By that time, Peru's population had reached a point where its configurations were thus substantially different than they were a generation earlier, largely because of the enormous growth of metropolitan Lima, which includes the seaport of Callao. Indeed, four of the largest political districts of greater Lima began as squatter settlements and now would rank among the nation's top ten cities if they had been counted separately. The leading cities in Peru represent a mix of old colonial places--Lima, Arequipa, Trujillo, Cusco (Cuzco), Piura, and Ica--and newly emergent ones, such as Huancayo, Chimbote, Iquitos, and Juliaca, whose new elites derive mostly from the highly mobile provincial middle and lower classes. In the Sierra, Juliaca, because of its role in marketing and transportation, surpassed the departmental capital of Puno in both size and importance to become the most important city south of Cusco.

Burgeoning cities, such as the industrial port of Chimbote, had a kind of raw quality to them in the early 1990s, with blocks and blocks of recently constructed one- and two-story buildings and a majority of streets neither paved nor cobbled. As the site of Peru's prestige industry--an electrically powered steel mill-- and as a major port for the anchovy industry, Chimbote attracted bilingual mestizos and cholos, who continued to pour into the city from the highlands of Ancash, especially the provinces of Huaylas, Corongo, Pallasca, and Sihuas. The migrants' dynamism, powered by a will to progress and modernize, built the city from a quaint seaside town of 4,200 residents in 1940 to 296,000 in 1990, with neither the approval nor significant assistance of government planners or development programs. Although the energy and growth of Chimbote was impressive, the lack of urban infrastructure in the basic services, absence of attention to environmental impacts, and totally inadequate municipal budgets led directly to converting Chimbote Bay, the best natural port on Peru's coast, into a cesspool of industrial and urban wastes (meters thick in places). Even smaller coastal boom towns, such as Supe, have suffered the same outcomes. It was not surprising that the 1991 cholera outbreak should have started in Chimbote.

Just as the cities have grown, the rural sector's share of the population has declined. Nevertheless, in the early 1990s there were still more persons living in the rural regions than ever before in the nation's history. In fact, the rural population in 1991 equaled the total population of the country in 1961.

At first, the country seemed to relish its growth even though the population explosion distressed the urbane sensibilities of the elite and the comfortable middle classes. Through its increase in size, Peru gained stature internationally and maintained a superiority of sorts vis-�-vis Ecuador, Bolivia, and Chile, its regional rivals. It could be maintained that Peru's policy was to let the population problem "solve itself" through spontaneous migration by which people found their own solutions for the maldistribution of wealth, services, resources, and power. The vast and growing squatter settlements in Lima, however, gave many serious pause, and alternatives were proposed.

Peru

Peru - Demography of Growth, Migration, and Work

Significant in different ways were the divisions according to the major ecological zones. In 1990 the coastal region held 53 percent of the nation's peoples; the highlands, 36 percent; and the Selva, the other 11 percent. This distribution pattern marked an abrupt change from almost thirty years earlier when the figures for coast and highlands were nearly the reverse. These shifts obviously had significant implications for the nation in terms of government, the economy, and social relations. For example, the agricultural sector had two parts: the mechanized high-export production of the coastal plantations and cooperatives, and the intensively farmed small-holdings of the Sierra, which have depended most heavily on hand labor and were essentially unchanged in technology since the colonial period. Although the highland farm technology was effective, Andean production was undermined by urbanward migrations and the revolution and repression of the 1980s.

Within the contexts of these significant demographic changes, the general growth of the population has been constant since its low point at the end of the colonial period. Between 1972 and 1981, the country grew by 25 percent. The increase may have been greater between 1981 and 1991, reaching over 30 percent, if projections were correct. The increase ran counter to the anticipated benefits stemming from the continued drop in fertility rates, which declined from 6.7 children born per woman in 1965 to 3.3 in 1991, and in birth rates, which dropped from a high of 45 births per 1,000 in 1965 to 27 per 1,000 in 1992. The crude death rates, however, despite the many problems in health care, fell over this same period from 16 to 7 per 1,000, basically matching the decline in the birthrate and retaining the actual rate of population growth near its same level as before. Life expectancy for males in Peru has increased from fifty-one years in 1980 to estimates of sixty-three years in 1991, second lowest in South America after Bolivia. Demographers projected that Peru's population would reach 28 million by the year 2000 and 37 million in 2025 if these rates continued. Contemporary dilemmas paled before the problems posed by such estimates. A significant lowering in infant deaths would markedly increase the overall growth rate and accompanying problems posed to institutions, services, and resources.

Population Policy and Family Planning

The issue of slowing population growth through the systematic implementation of modern birth-control methods had remained lowkey since the late 1960s but erupted during the 1980s, as a result of pressure coming particularly from women. Research in the early 1980s showed that over 75 percent of women wished to use contraceptives, but over 50 percent did not do so out of fear and uncertainty about their effects or because of the disapproval of the spouse. In this context, the 1985 Law of the National Population Council came into being under the premise that although abortion and voluntary sterilization were excluded, all other "medical, educational, and information services about family planning guarantee that couples and all persons can freely choose the method for control of fecundity and for family planning." The proposed law was opposed in 1987 by the Assembly of Catholic Bishops, which retained its opposition to artificial methods and "irresponsible philosophies." Implementation of the law, however, began that year, setting targets for lowering fecundity rates to 2.5 children per family by the year 2000 and greatly amplifying the availability of clinical resources and contraceptives. In addition to government programs, there were sixteen private organizations promoting various aspects of the policy by 1988.

In 1986 a reported 46 percent of women of child-bearing age were using some form of contraception, but it was not known what percentage of men used contraceptives. The data on the incidence of abortions was not compiled until the 1980s, but according to hospital reports, in 1986 there were 31,860 abortions performed for life-threatening sociomedical reasons, which represented almost 43 percent of all hospital cases involving obstetrical procedures. The estimated rate of clandestine abortions, however, was reportedly at the high rate of 143 cases per 1,000 pregnancies, despite a law that in theory prohibited such interventions. A survey in 1986 of women's attitudes toward contraception and family planning showed that over 27 percent of women would halt their family size after one child, 69 percent would limit their family to two, and over 80 percent desired no more than three children. It was clear from this response that Peruvian women wanted to limit family size and that their demands for increased state and private services would continue to rise.

During the 1975-90 period, contraceptives became more widely available throughout Peru, being distributed or sold nationwide through Ministry of Health programs and private clinics, pharmacies, and even by street vendors in marketplaces. Pharmacies were the most common source of both information about and supply of contraceptives. Not surprisingly, use of birthcontrol techniques increased sharply with socioeconomic status, educational level, and urban coastal residence.

Lima and the Patterns of Migration

The first Bela�nde administration (1963-68) initiated concerted efforts to develop the Amazon Basin through its ambitious Jungle Border Highway (la carretera marginal de la selva or la marginal) program, the organization of colonization projects, and special opportunity zones to steer highland migrants in that direction and away from the coast. Bela�nde's Selva-oriented program thus tended to divert investments away from the Sierra, even though much was done there on a small local scale through the self-help Popular Cooperation (Cooperaci�n Popular) projects. In hindsight, the resulting degradation of the tropical biosphere in the wake of these schemes created new sets of problems that were far from anyone's mind in 1964. Unfortunately, the net result of these expensive and sweeping efforts at tropical development has not been as planned. Significant changes in the direction of migration did not take place, and the jungle perimeter road system covering hundreds of kilometers was often used as landing strips by airborne drug traffickers and for military maneuvers.

Just as there are strong "pull" factors that attract persons to Lima and the other major cities, there are also many conditions that "push" people out of their communities: the loss or lack of adequate farmland, natural disasters such as earthquakes and landslides, lack of employment options, and a host of personal reasons. In addition, since the outbreak of terrorist activities by the Shining Path movement in 1980 and subsequent military reactions, over 30,000 persons have been dislocated from towns and villages in the Ayacucho and Huancavelica highlands, most of them gravitating to Ica or Lima.

The profound changes during the 1950-90 period, spurred by sheer increases in numbers, largely resulted from a desire for better life opportunities and progress. The significant demographic change that took place was the migration from rural areas to the cities, especially Lima. Five major features gave this great migration a particular Peruvian character: the concentration of people in Lima and other coastal cities, the regional heterogeneity of the migrants, the tendency of people to follow their family and paisanos to specific places, the development of migrant organizations, and the willingness of migrants to assist their homelands.

The migrants, searching for employment and better living conditions, went predominantly from the provinces to the national capital, creating a megalopolis out of Lima and Callao. In 1990 greater Lima had over 30 percent of all Peruvians as residents. On the north coast, cities such as Piura, Chiclayo, and Trujillo have attracted persons from their own regions in considerable numbers; significant growth has occurred in the southern highland cities of Arequipa, Juliaca, and Cusco, as well as in the remote jungle city of Iquitos. Despite rates of increase averaging more than 330 percent between 1961 and 1990, these cities drew few people compared to the numbers of persons drawn to greater Lima. In 1990 Lima was 14 percent larger than the next 24 cities combined, and 58 percent of all urban dwellers lived in greater Lima. As such, Lima had become one of the world's leading cities in terms of its level of primacy, that is, its overwhelming demographic dominance with respect to the next largest urban centers.

Lima's development as a "primate" city (megalopolis) began taking shape during the nineteenth century when the nation was recuperating from the disastrous War of the Pacific (1879-83) with Chile. This trend accelerated dramatically after about 1950, when the fishing industry began its expansion and Peru started to industrialize its urban economy in a determined manner. Thus, throughout most of this long period, no less than a third of the capital's residents were born elsewhere.

Lima's dominance has been more than demographic. In the late 1980s, the metropolis consumed over 70 percent of the nation's electrical energy; had 69 percent of its industry, 98 percent of private investment, and 83 percent of bank deposits; yielded 83 percent of the nation's taxes; had 42 percent of all university students, taught by 62 percent of all professors; and had 73 percent of the nation's physicians. Over 70 percent of the country's wages were paid out in Lima to 40 percent of all school teachers, 51 percent of public employees, and equivalent percentages of the skilled labor force and other urban workers. From television and radio stations to telephones, most consumer goods, recreational facilities, and other items of modern interest were also concentrated in Lima. In short, if Peru had it, it came first to Lima and more often than not was unavailable elsewhere.

Government, too, has been totally centralized in the capital since the establishment of the viceregal court in the sixteenth century. The centrality of Lima in colonial times was so significant that persons committing crimes were often punished by exiling them from the capital for various periods of time; the farther away, the worse the penalty. This notion still underlies much of the cultural concept of social value in Peru today. Everyone living outside of greater Lima is automatically a provincial (provinciano), a person defined as being disadvantaged and, perhaps, not quite as civilized as a lime�o. Under such circumstances, it is hardly surprising that Lima has attracted the vast majority of Peruvians hoping to improve their lives, whether looking for employment, seeking an education, or attempting to influence bureaucratic decisions and win assistance for their communities. Lima has been both hated and loved by provincianos, who have been engaged in unequal struggle for access to the nation's wealth and power. The factor of primacy loomed as one of Peru's most significant problems, as the nation attempted to decentralize various aspects of the government under a reorganization law promulgated in March 1987.

Another aspect of the migration had to do with its heterogeneity of origin in terms of both place and sociocultural features. At the beginning of the twentieth century, most of the provincial migrants were fairly homogeneous representatives of local elites and relatively prosperous sectors of provincial urban capitals. The last decades of the century, however, have seen a marked growth in the social and cultural diversity of the migrants. Between 1950 and 1990, increasing numbers of persons came from villages and hamlets, not the small district capitals, and thus were more representative of the bilingual and bicultural population, referred to as cholos. Whereas in the earlier years of this period, it was unusual to hear migrants speaking the Quechua or Aymara languages on the street, by 1990 it was commonplace to hear these languages used for commerce and general discourse in Lima. This change occurred mostly after 1970, when the populist military regime of Juan Velasco Alvarado began a strong effort to legitimize the native tongues. And thus, it has also become more common to see persons retaining various aspects of their regional clothing styles, including hats and colorful skirts, and in, general, not discarding those cultural class markers that were so denigrated a short generation earlier.

A third migratory pattern was that people invariably followed in the footsteps of relatives and fellow paisanos. Once a village had a few paisanos established in the city, they were soon followed by others. During the course of Peruvian migration, relatively few persons simply struck out on the migratory adventure alone. Thus, the society of migrants was not a collection of alienated "lost souls," but rather consisted of groups of people with contacts, social roles, and strong cultural and family ties.

This fact produced the fourth dimension of the Peruvian migratory process: the propensity of migrants to organize themselves into effective voluntary associations. The scale and pattern of these associations distinguished the process in Peru from that in most other countries. The organizations have taken several forms, but the two most outstanding examples are found in the squatter settlements and regional clubs that have proliferated in all the largest cities, particularly Lima. The process of urban growth in Lima has produced an urban configuration that conforms to no central plan. Without access to adequate housing of any type, and without funds or available loans, migrants set about developing their own solutions by establishing organizations of their own, occasionally under the sponsorship of APRA. They planned a takeover of unoccupied land at the fringes of the city and, with the suddenness and effectiveness of a military attack, invaded the property, usually on a Saturday night.

Once on the land, the migrants laid out plots with precision and raised temporary housing in a matter of hours. Called by the somewhat deprecatory term barriada, the shantytowns quickly developed both an infrastructural and a sociopolitical permanence, despite initial official disapproval and police harassment. At first, the land invasions and barriada formation provoked enormous unease among traditional lime�os and especially in the halls of government. The barriadas were wildly characterized as dangerous slums by the Lima middle- and upper classes, which felt threatened by the squatters. Research by anthropologist Jos� Matos Mar Santos and others demonstrated beyond doubt, however, that these "spontaneous settlements" were, in fact, solutions to grave urban problems. Subsequent research by anthropologist Susan Lobo established that such settlements were civilly organized and rapidly assumed positive urban attributes under the squatters' own initiatives.

In 1990 there were over 400 of these large settlements surrounding Lima and Callao, containing at least half of Lima's population. Over time, many of them--such as San Mart�n de Porres, Comas, and Pamplona Alta--had become new political districts within the province of Lima, with their own elected officials and political power. Political scientists Henry A. Deitz and David Collier have called attention to squatter organizations as mechanisms of empowerment for persons otherwise denied a base or place in the political system. An important step for the squatters was the acquisition of the skill and the ability to exercise influence in the corridors of bureaucratic power. As these settlements and their organizations gained public legitimacy in the 1960s, the Velasco government, on assuming power in 1968, soon renamed them pueblos jovenes, a name which was quickly adopted and has remained.

The regional club aspect of Peru's urban migration was not as obvious a phenomenon as the ubiquitous squatter settlements. The need for a social life, as well as the desire to maintain contact with the home community, friends, and relatives, had moved migrants from particular villages and towns to create representative organizations based on their common place of origin. As a result, according to Te�filo Altamirano, in 1990 there were over 6,000 such clubs in greater Lima, with hundreds more to be found in the other major cities. Not only have these clubs provided an important social venue for migrants, but they also have served as a vehicle by which members could give not insubstantial assistance to their homeland (terru�o), when called for.

Peru

Peru - Regionalism and Political Divisions

The formidable mountain ranges, deep chasms, and deserts that partition the habitable regions of Peru contribute greatly to the formation and maintenance of political and social identities by facilitating or obstructing communication, as well as by creating economic diversity through zonal specializations. Archaeologists and ethnohistorians have identified some forty-four different highland cultures and thirty-eight more in coastal valleys that existed at the time of the rise of the Inca Empire in the fifteenth century. Tawantinsuyu (Land of the Four Quarters) retained these preexisting ethnogeographic zones in one form or another, according to anthropologist Michael Edward Moseley, establishing at least eighty ethnically distinct political provinces throughout the empire's vast territory.

The policies of the Tawantinsuyu presaged subsequent geopolitical territorial arrangements. The "quarters" were unequal in size and population, but roughly corresponded to the cardinal directions. Each region began with its cobbled roadway leaving the "navel" of the city of <"http://worldfacts.us/Peru-Cusco.htm">Cusco, whose perimeters shaped a symbolic Andean puma. To the north, Chinchaysuyu encompassed most of the coast and highlands of modern Peru, from Nazca, and eventually with conquest, to what is now northern Ecuador. In terms of the divisions of the Inca Empire, 68 percent of Peruvians in 1990 lived in Chinchaysuyu. To the south stretched the vast region of the puna and Lake Titicaca Basin called the Collasuyu. With the Inca conquests, the Collasuyu quarter extended to the R�o Maule in what is now central Chile. To the east and west were two relatively small quarters, the Antisuyu and Cuntisuyu, respectively. The former occupied the forested semitropical highland region called Monta�a, and the latter, the arid mountains and coast encompassing present-day Arequipa and adjacent departments. Seen in this perspective, 41 percent of the people lived in four departments occupying the central region of the country, with 27 percent in the northern area, 23 percent in the south, and 8 percent in the Amazonian departments of the east in 1990. These four modern quarters of Peru often have been utilized in the context of planning studies.

The Spaniards reorganized the Tawantinsuyu on discovering that the highland Inca capitals at Cusco and Cuenca (Ecuador) and their own first choice of Jauja near present-day Huancayo suited neither their physiological nor political needs. When they founded Lima, the Spaniards turned the Inca spatial concepts upside down: centrality and place were reoriented as Cusco became a province and no longer was the "navel of the universe" from which all roads departed. Despite this change, Spanish viceregal organization educed its structure from longstanding ethnolinguistic and ecological realities. The Spaniards formed provinces ( corregimientos), which later became intendancies (intendencias), as well as Catholic dioceses or parishes.

With independence, the colonial territories were again redefined, but in most cases, the "new" politico-administrative boundaries still recalled ancient cultural and linguistic outlines. The republic carried forward many operational aspects of the colonial administrative units. Throughout their national history, Peruvians have demonstrated a propensity to revise their political affairs both with respect to leadership and the boundaries within the nation. In 1980 the department of Ucayali was created by splintering off two provinces from the Selva department of Loreto, a reflection of development and population increases in that immense tropical region. Moreover, after the census in 1981, six new provinces in Cajamarca, Ancash, and Ucayali departments and twenty new districts were created in various parts of the country through legislative acts. The new districts included six in the populous highland department of Cajamarca; three each in Ucayali, Puno, and Ancash; two in the province of Lima; and others in the departments of Hu�nuco and Cusco. Each time a census occurs, political and social identities are further refined, usually building on old traditions of similitude, as well as a desire for separate political representation and control.

The result was a nation divided into a political hierarchy of 24 departments, 159 provinces, and 1,717 districts, each with its urbanized capital symbolized by a plaza bordered by a "mother church" and municipal office. Peruvians invariably identify themselves as being from one of these divisions, as the place of birth, and thus everyone carries a locality identity as a lime�o from Lima, a chalaco from Callao, a cuzque�o from Cusco, a huaracino from Huaraz, and so forth, down to the smallest hamlet. The political fissioning thus reflects a strong geocultural identity and bonding, manifested by the establishment and activities of thousands of regional and local clubs and associations by migrants from these places who live in cities throughout the country.

Provincial migrants, especially those in greater Lima, play important and often key roles in the creation of new political divisions back in their homelands, as was the case by 1990 in the highland district of Santo Toribio in the province of Huaylas. The new district was the result of political antagonisms originating in colonial times between the small mestizo district capital of Huaylas and its rural hinterland of Santo Toribio. After more than sixty years of plots and counterplots in Lima and in the patria chica (hometown or "little homeland"), the partisans of Santo Toribio, represented by migrants in Lima, finally won out over the Huaylas district lobby made up of migrants from the town that sought to maintain district unity.

In this maneuvering, the national political parties were used as the fulcrum on which the scales were tipped. The municipal government of Huaylas was held by members of the Popular Action (Acci�n Popular--AP) party, whereas the Santo Toribio interests were aligned with the American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana--APRA) party, which took power nationally under Alan Garc�a P�rez (president, 1985- 90). This scenario is replicated throughout the highlands and is at the core of virtually all such alterations in political boundaries. In most cases, the imbroglio develops as rural villagers, native Americans, and cholos vie for power with the mestizo townspeople who have dominated them for centuries.

The same struggle has accompanied the dramatic growth of greater Lima, to which migrants from the provinces have gone to seek access to power, as well as education and jobs. Understanding the political structure of Lima is in itself a study in the process of empowerment. The city of Lima is actually a collection of municipalities. Instead of the two municipal districts of colonial time--Lima and R�mac--by 1961 Lima contained fifteen district municipalities, and by 1990 it had grown to thirty-three, all the result of migration. Like all their provincial counterparts, each municipal district has its plaza, elected mayor and council, and municipal functions. The government of the province of Lima unites them and coordinates the metropolis as an urban entity. The rest of metropolitan Lima consists of the constitutional province of Callao, the old colonial port. Callao is fused with the capital by a continuous blanket of housing projects, squatter settlements, and industries through which one passes en route to Jorge Ch�vez International Airport from Lima. Even so, in early 1991 there were still small patches of irrigated farmland at the northern fringe of Callao Province, awaiting the next spurt of urban growth to engulf them.

The administrative system of departments, provinces, and districts is under the central authority of the national executive, that is, the president and prime minister. As such, the decisions and policy inevitably and ultimately descend from a government overwhelmed by the needs, demands, and power of Lima. The centralization of power is resented and regarded as anachronistic, a problem that has provoked debate since 1860 about the wisdom of decentralization and how it might be accomplished.

The reorganization decree promulgated by the Garc�a government in March 1987 put forth a plan to decentralize the nation and establish new administrative zones, regrouping the present twenty-four departments into twelve larger regions with legislative, administrative, and taxing powers. Interestingly, the names Inca, Wari (Huari), and Chav�n have been applied to areas where those ancient cultures once thrived. If the system becomes fully installed, it will dramatically alter Peru as a nation and would be the most significant change in structure since independence. In the early 1990s, few Peruvians yet understood how the new system would work or what its impact would be. Because of many uncertainties created by the unstable political and economic conditions of the 1980s, both the Congress and the government of President Alberto K. Fujimori (1990- ) postponed putting the full plan into effect, although some aspects of the program had begun.

Peru

Peru - CULTURE, CLASS, AND HIERARCHY IN SOCIETY

A large part of Peru's complicated modern social system started with the hierarchical principles set down in colonial times that remain as powerful guidelines for intergroup and interpersonal behavior. Peru's ethnic composition, however, is mixed. In the early 1990s, Europeans of various background made up 15 percent of the population, Asians from Japan and China and Africans formed 3 percent, the mestizo population constituted 37 percent, and the native Americans made up 45 percent, according to various United States and British reference sources. However, it is difficult to judge the composition of the native population because census data have generally undercounted or frequently failed to identify ethnic groups successfully. Even using language as the primary criterion does not take bilingualism adequately into account and omits other aspects of cultural behavior altogether. Thus, although Cajamarca Department is 98- percent Spanish-speaking, the bulk of the rural population lives in a manner identical to those classified as native people because they speak Quechua. The question as to who is a native has been an oft-debated issue. But how the individual chooses to classify his or her cultural identity is determined by the forces of society that give ethnic terms their social meaning. Because of Peruvian society's longstanding negative attitudes and practices toward native peoples, persons who have become socially mobile seek to change their public identity and hence learning Spanish becomes critical. Denial of the ability to speak Quechua, Aymara, or other native languages often accompanies the switch.

Another separate dimension of the "Indian problem" so widely discussed by Peruvian essayists has to do with the natives living in the Selva and high Selva, or Monta�a, regions of the country. The tribal peoples have a tenuous and generally unhappy relationship with Peruvians and the state, evolved from long experience along the tropical frontier. The Incas and their predecessors ventured only into the fringes of the region called Antisuyu, and the Spanish followed their pattern. The inhabitants were known collectively as savages (chunchos). In documents they are politely referred to as jungle people (selv�colas or selv�ticos). Thought to be savage, wild, and dangerous but usually described as "simple" and innocent, they are also widely considered to possess uncanny powers of witchcraft and healing. Here, the sixteenth-century concept of the "noble savage" vies with equally old notions that these are lazy, useless people who need to get out of the way of progress. Indeed, modern currents of developmental change, the expanding drug trade, oil exploration, the clearing of the forest, and the search for gold in Madre de Dios Department have placed native peoples under great pressures for which they are little prepared. The Selva tribes, like native highlanders, Afro-Peruvians, and other people "of color," are those who feel the discriminatory power of the colonial legacy as well as modern stresses, especially if they are poor. In demographic terms, the impact of poverty and oppression has been, and remains, considerable. Thus, the mortality rates of native peoples and especially their children are much higher than those of the general population. Tribal peoples are still widely susceptible to numerous uncontrolled infectious diseases and outside the religious missions have little or no access to scientific medical care.

The tribal peoples of the lower Selva along the major rivers have endured the stress and danger of contact with outside forces longer than those groups located at the upper reaches of the streams. It is in these "refuge areas" that most of the present tribal populations survive. More than any other sector of the population, the rural peoples of the Selva, and especially the tribal groups, live at the fringe of the state both literally and figuratively, being uncounted, unserved, and vulnerable to those who would use the area as their own. According to anthropologist St�fano Varese, there are about 50 tribes numbering an estimated 250,000 persons and maintaining active communities, scattered principally throughout the departments of Loreto, Amazonas, Ucayali, Hu�nuco, and Madre de Dios. The national census, however, has lowered its estimates from 100,830 in 1961 to 30,000 in 1981 for the tribal peoples, even though field studies have not supported such conclusions.

In the Selva, tribal lands in the early 1990s were in even more jeopardy than the Quechua and Aymara farmland in the Sierra. Although community rights were acknowledged, if not respected, in the Andes, outsiders have virtually never accepted this fact in the case of the Amazonian peoples. Nevertheless, apparently many tribal societies, such as the Shipibo, have held their traditional hunting, fishing, and swidden lands in continuous usufruct for as long as 2,000 years. As a result of the land reforms under the Velasco government, however, laws established the land rights of Amazonian native communities. Consequently, some groups, such as the Cocama-Cocamilla, have been able to secure their agroecological base.

The Afro-Peruvians who came as slaves with the first wave of conquest remained in that position until released from it by Marshal Ram�n Castilla (1845-51, 1855-62) in 1854. During their long colonial experience, many Afro-Peruvians, especially the mulattos and others of mixed racial parentage, were freed to assume working-class roles in the coastal valleys. Even fewer blacks than Europeans settled in the highland towns and for virtually all the colonial epoch remained concentrated in the central coastal valleys. Lima's colonial population was 50 percent African during much of the era. Indeed, the term "criollo" was originally identified with native-born blacks and acquired much of its special meaning in association with urban, streetwise behavior. The social status of blacks in many ways paralleled that of the native Americans in rank and role in society.

Completing the human resource mix in Peru were the immigrants from Europe and Asia. The former arrived with the advantages of conquest; the latter arrived first as indentured laborers and later as Japanese and Taiwanese immigrants who pursued careers in truck farming, commerce, and business. The Chinese who were brought to Peru from Macao and other ports between 1849 and 1874 numbered about 90,000. The Chinese influx occurred in the same period as the United States' importation of Chinese coolies, and many of the latter were eventually shipped from San Francisco to Lima. Most Chinese eventually survived their indentures and took up residence in the coastal towns where they established themselves as active storekeepers and businesspeople. The growth of the Japanese presence in Peru began early in the twentieth century and quietly increased over the 1970-90 period. In 1990 Japanese immigrants constituted the largest foreign group in Peru and were rapidly integrating into Peruvian culture, gaining positions from president (Fujimori) to popular folk singer (the "Little Princess from Yungay"). In the middle range of Peruvian class structure, the Chinese and especially the Japanese have achieved status and mobility in ways the native peoples have not.

The key to understanding Peruvian society is to view aspects of its dynamic ethnoracial character as a set of variables that constantly interplays with socioeconomic factors associated with social class configurations. Thus, a native American might acquire the Spanish language, a university education, a large amount of capital, and a cosmopolitan demeanor, but still continue to be considered an indio (Indian) in many circles and thus be an unacceptable associate or marital companion. Yet, there is opportunity for socioeconomic mobility that permits ambitious individuals and families to ascend the hierarchy ranks in limited ways and via certain pathways. Such mobility is easier if one starts on the ladder as a mestizo or a foreigner, but especially if one is white.

<>Indigenous Peoples
<>Legacy of Peonage
<>Elites
<>Military Classes
<>Urban Classes

Peru

Peru - Indigenous Peoples

The word indio, as applied to native highland people of Quechua and Aymara origin, carries strong negative meanings and stereotypes among non-native Peruvians. For that reason, the ardently populist Velasco regime attempted with some success to substitute the term peasant (campesino) to accompany the many far-reaching changes his government directed at improving the socioeconomic conditions in the highlands. Nevertheless, traditional usage has prevailed in many areas in reference to those who speak native languages, dress in native styles, and engage in activities defined as native. Peruvian society ascribes to them a caste status to which no one else aspires.

The ingrained attitudes and stereotypes held by the mistikuna (the Quechua term for mestizo people) toward the runakuna (native people--the Quechua term for themselves) in most highland towns have led to a variety of discriminatory behaviors, from mocking references to "brute" or "savage" to obliging native Americans to step aside, sit in the back of vehicles, and in general humble themselves in the presence of persons of higher status. The pattern of ethnoracist denigration has continued despite all of the protests and reports, official policies, and compelling accounts of discrimination described in Peruvian novels published since the beginning of the twentieth century.

The regions and departments with the largest populations of native peoples are construed to be the most backward, being the poorest, least educated, and less developed. They are also the ones with the highest percentages of Quechua and Aymara speakers. The reasons for the perpetuation of colonial values with respect to autochthonous peoples is complex, being more than a simple perseverance of custom. The social condition of the population owes its form to the kinds of expectations embedded in the premises and workings of the nation's institutions. These are not easily altered. Spanish institutions of conquest were implanted into colonial life as part of the strategy for ruling conquered peoples: the indigenous people were defeated and captured and thus, as spoils of war, were as exploitable as mineral wealth or land. In the minds of many highland mestizos as well as betteroff urbanites, they still are.

Although the Spanish crown attempted to take stern control over civic affairs, including the treatment, role, and conditions of native Americans who were officially protected, the well-intended regulations were neither effective nor accepted by creole and immigrant interests. Power and status derived from wealth and position, considered not only to be in the form of money and property, but also coming from the authority to exercise control over others. Functionaries of the colonial regime paid for their positions so that they could exact the price of rule from their constituent populations. Encomenderos, corregidores, and the numerous bureaucrats all held dominion over segments of the native population and other castes, which were obliged to pay various forms of tribute. With the decline of the colonial administration and the failure of the many attempts at reform to control the abuses of the native peoples, Peru's political independence saw a transfer of power into the hands of Creoles and mestizos, the latter of whom comprised the majority of Peru's citizens in the early 1990s.

The growth of large estates with resident serf populations was an important feature of this transition period. The process benefited from the new constitutional policies decreeing the termination of the Indian community (Comunidad Indio)--the corporate units formerly protected by the crown. The subsequent breakup of hundreds of communities into individually owned properties led directly to these lands being purchased, stolen, or usurped by eager opportunists in the new society. The most critical native American franchise was thus lost as entire communities passed from a relatively free corporate status to one of high vulnerability, subject to the whims of absentee landlords. Although the development of haciendas occurred rapidly after the demise of the colonial regime, the system had long been in place, established through the assignment of property and people to benefit particular individuals for their service to the crown, to institutions such as the church, and to public welfare societies intended to offer succor to the poor by maintaining hospitals and orphanages. Debt peonage constituted the basic labor arrangement by which landlords of all types operated their properties nationwide. The system endured until it was abolished by the land reform of 1969.

Peru

Peru - Legacy of Peonage

Although a thing of the past, the numbing effects of four centuries of peonage on Peruvian society should not be underestimated. One archetypical Andean estate operated at Vicos, Ancash Department, from 1594 to 1952, before it became part of Peru's first land-reform experiment. The 17,000-hectare estate and the landlord's interests were managed by a local administrator, who employed a group of straw bosses, each commanding a sector of the property and directing the work and lives of the 1,700 peons (colonos) attached to the estate by debt. Dressed in unique homespun woolen clothing that identified them as vicosinos (residents of Vicos), each colono family lived in a house it built but did not own. Rather, it owed the estate three days of labor per week, and more if demanded, in exchange for a small subsistence plot and limited rights to graze animals on the puna. Grazing privileges were paid for by dividing the newborn animals each year equally between colono and landlord. For the work, a symbolic wage (temple) of twenty centavos (about two cents in United States currency of the time) and a portion of coca and alcohol were given to each peon. In addition, peons were obliged to provide other services on demand to the administrator and landlord, such as pasturing their animals, serving as maids and servants in their homes, running errands of all types, and providing all manner of labor from house construction to the repair of roads. The landlord might also rent his peons to others and pay no wage.

To enforce order on the estate, the administrator utilized "the fist and the whip." Vicos had its own jail to which colonos were sent without recourse to any legal process; fines, whippings, and other punishments could be meted out arbitrarily. As individuals, the colonos were subject to severe restrictions, not being allowed to venture outside of the district without permission, or to organize any independent activities except religious festivals, weddings, and funerals that took place in the hacienda's chapel and cemetery, only occasionally with clerical presence. The only community-initiated activities allowed were those under the supervision of the parish church.

Outside the protection of the estate, peons correctly felt themselves to be vulnerable to exploitation and feared direct contact with those mistikuna whom they regarded as dangerous, even to the extent of characterizing whites and powerful mestizos as pishtakos, mythical bogeymen who kill or rape natives. In protecting themselves from the threats of this environment, vicosinos, like tens of thousands of other colonos across the Andes, chose to employ the "weapons of the weak," by striking a low profile, playing dumb, obeying, taking few initiatives, and in general staying out of the way of mestizos and strangers they did not know, reserving their own pleasures and personalities for the company of family and friends.

Peonage under the hacienda functioned in a relatively standard fashion throughout Peru, with variations between the coastal plantations, on the one hand, and the highland estates and ranches, on the other. On some highland estates, conditions were worse than those described; in others they were not as restrictive or arbitrary. Although called haciendas, the coastal plantations were far more commercialized, being given to the production of goods for export or the large urban markets. Under these more fluid socioeconomic circumstances, the plantation workers, called yanaconas (after the Incan class of serfs called yanas), who permanently resided on the estates, also had access to subsistence plots. Moreover, they usually had "company" housing, schools, and access to other facilities specified under a signed labor contract often negotiated through worker unions.

Nevertheless, there were lingering connections to the highland manorial system. Because plantation crops, such as sugarcane and cotton, require a large labor force for harvests and planting, workers are seasonally recruited from the highland peasantry for these tasks. In some instances, owners of coastal plantations also possessed highland estates from which they might "borrow" the needed seasonal workers from among the colonos they already controlled in peonage and pay them virtually nothing. In most cases, however, the coastal plantations simply hired gangs of peasant farmers for the short term, using professional labor contractors to do the job. For thousands of young men, this became an important first experience away from their family and village, serving as a rite of passage into adulthood. It also constituted an important step for many in developing the labor and life skills needed to migrate permanently to the coast. Employment on the coastal plantations offered many opportunities to the highland farmer to use mechanized equipment and different tools, observe agricultural procedures guided by scientific principles and experts, and work for wages that greatly surpassed what they might earn in the villages. For most farm workers, it was the only chance to actually accumulate money.

Peru

Peru - Elites

Concentrated in the provincial, departmental, and national capitals, Peru's upper class was the other side of the coin of peonage. Whereas the Quechua or Aymara native population was powerless, submissive, and poor, the regional and national elites were Hispanic, dominant, and wealthy. The inheritors of colonial power quickly reaffirmed their political, social, and economic hegemony over the nation even though the Peruvian state itself was a most unstable entity until the presidency of Ram�n Castilla. They continued to strike the posture of conquerors toward the native peoples, justifying themselves as civilized, culto (cultured), and urbane, as well as gente decente (decent people), in the customary phrase of the provincial town. Such presumption of status is a powerful but unwritten code of entitlement. It permits one to expect to have obedient servants, to be deferred to by those of lesser station, and to be the first to enjoy opportunity, services of the state, and whatever resources might be available.

The modern national upper classes of Peru are today a more diverse population than was the case even at the end of the nineteenth century. They have remained essentially identified with the Costa, even though they have controlled extensive property in the highlands and Selva. Nevertheless, these elites are highly conscious of class integrity as social life unfolds in the context of private clubs and specialized economic circles. The predilection of the upper-class families to show the strength of their lineages is revealed not only in the use of full names, which always contain both one's father's and mother's last names in that order, but also the apellidos (last names) of important grandparental generations. Thus, magazine society pages report names like Jos� Carlos Prado Fernandini Beltr�n de Espantoso y Ugarteche, in which only Prado is the last name in the American sense. Use of the family pedigree to demonstrate rank is common among the elite when the names are clearly associated with wealth and power.

As Peruvians have become more cosmopolitan, foreign names from Britain, Italy, Austria, and Germany have appeared with increasing frequency among those claiming upper-class credentials, leading to the conclusion that it is easier to reach elite status from outside Peru than to ascend from within the society. There are, of course a number of families who can trace their lineages to the colonial period. However, families of nineteenth- and early twentieth-century immigrants constitute about 40 percent of Peru's most elite sector, indicating a surprising openness to cosmopolitan mobility. In a 1980s list of Peru's national elite containing over 250 family names, for example, only one of clearly Quechua origins could be identified.

The racial composition of the upper class is predominantly white, although a few mestizos are represented, especially at regional levels. The social structure of the country follows a Lima-based model. The national upper class is located almost exclusively in the province of Lima, the second strata of elites is provincial, residing in the old principal regional cities, such as Arequipa, Trujillo, and Cusco, but not in Huancayo, Chimbote, or Juliaca, whose populations are predominantly of highland mestizo and cholo origins. Upper-class status in provincial life generally does not equate with the same levels in Lima, but rather to a middle level in the national social hierarchy.

Traditionally, the upper classes based their power and wealth on rural land ownership and secondarily on urban industrial forms of investment. This situation has changed in part through the rise of business, industry, banking, and political opportunities, and also because of the Agrarian Reform Law of 1969, which forced dramatic changes in land tenure patterns. It was, however, a change as difficult to make as any that could be imagined: the fabled landed oligarchy greatly feared any alterations in its property rights, which included the colonos and yanaconas attached to both highland and coastal estates. Their control over Peru's power, purse, and peasantry bordered on the absolute until the second half of the twentieth century, when the great highland migrations took hold of coastal cities and industrial growth exploded. Ensuing social and political demands could no longer be managed from behind the traditional scenes of power.

Vested interests of the landed upper class were ensconced in the National Agrarian Association (Sociedad Nacional Agraria-- SNA). Until the first government of Fernando Bela�nde, it had been impossible to discover just what the property and investment interests of this group were because government files on these subjects were closed and, indeed, had never been publicly scrutinized. All of this changed abruptly after the peasant land invasions of estates in 1963, when the need for solutions overcame the secrecy. In 1966 economic historian Carlos Malpica Silva Santisteban identified the landed oligarchy as a relatively small group, with 190 families owning 54 percent of the irrigated coast and 36 families or persons holding 63 percent of titled land in the Selva, for a total of over 3 million hectares. In the highlands, the data were similar in content but hard to verify.

Although upper-class wealth was founded on rural properties, it is evident that elite urban, mining, and industrial interests were also extensive. An indefatigable compiler of data on Peru's elites, Malpica annotated an extensive catalog of modern business and banking concerns showing the concentration of economic control in the hands of a tiny group of elite families, many being familiar traditional members of the oligarchy, now deprived of their land base by the agrarian reform. Of the seventy-nine families holding significant blocks of shares in the twelve principal insurance and banking operations in 1989, almost 50 percent were descended from the aforementioned European immigrant groups. Despite this Eurocentric trend, descendants of Japanese and Chinese immigrants have also entered the economic elites, if not with the equivalent social status. At least one Chinese-Peruvian family, which holds substantial banking, commercial, and industrial investments, descends from immigrants who arrived as indentured laborers in the nineteenth century.

Peru

Peru - Military Classes

The militarily connected population has developed into a significant national sector. Playing an ever more important social role, los militares (the military) have, in effect, emerged as a subsociety, with special attributes and arrangements that set them apart from other social classes as a powerful special interest elite, with its own allegiances and identity, sense of mission, and objectives developed in coherent, relatively independent ways from other national policy and planning processes. No other groups within the population, with the possible exception of the cabals of the oligarchy, can be so characterized.

The people involved in ancillary activities--military industries, medical services, civilian business managers and employees, service and maintenance personnel, in addition to members of family networks who benefit from having one of their number in the armed forces--probably approach 1 million, or 4 percent of the nation's population. The military domain commands 20 percent of central government expenditures, 5 percent more than education, the next largest share of the national budget, and much more than health services, which claimed 5.8 percent in 1988. Indeed, Peru's military expenditures of US$106 per capita exceeded three times the average expenditure per capita of all other South American nations in 1988. Over a twenty-year period, the military budget gained 38 percent in its share of the national budget, whereas education dropped by 35 percent and health gained by less than 5 percent since 1972.

Professionalization has involved areas that few have analyzed but that constitute the major reward system for professional career officers and noncommissioned personnel. These are the elaborate infrastructure and exclusive services for personnel and their families, including beach resorts and hotels, consumer discount cooperatives, casinos and clubs, schools of several types and levels, hospitals and general medical services, insurance coverages, recreational facilities, and a variety of other programs. In addition, there are extensive housing subdivisions in Lima for the officer corps and other military employees, named for the military branches that they serve. There are special retirement provisions and a plethora of other benefits for members of military that are unavailable to others in the society at large.

The sphere of military activities includes an extremely active internal social calendar of commemorative events that have the function of bonding the members and their families more tightly to group interests. In sum, the Peruvian military constitutes a virtually encapsulated society within the larger one and competes with advantage for the public funds vis-�-vis other interests by operating its own industries, sponsoring its own research and advanced study, and engaging in civic-action programs that often replicate the assigned work of civilian institutions, such as the Ministry of Agriculture. Consequently, the ubiquitous and well-established institutions of military society pervade Peruvian life at every turn and are regarded with skepticism by many who see them as depriving civilian needs of essential resources.

Peru

Peru - Urban Classes

Between the extremes of wealth and power represented by the white upper class and the native caste is the predominantly mestizo and cholo population, which largely comprises the lower and middle sectors of rural and urban society. These are the most numerous and diverse sectors, constituting the core of Peruvian national society in culture, behavior, and identity. Together, these sectors include a wide range of salaried workingclass families, persons in business and commercial occupations, bureaucrats, teachers, all military personnel (except those related to elite families), medical, legal, and academic professionals, and so forth. In terms of occupation, residence, education, wealth, racial, and ethnic considerations, the population is diverse, with few clear-cut markers differentiating one segment from another. Yet, there are obvious differences among the regions of the country that combine with those indicators to suggest a person's social position in relation to others. The importance of the regions derives from the fact that the urban and rural areas of the Sierra are, as a whole, measurably poorer than the Costa and Selva, and the various occupational groups less well-off in proportion. As in the case of the provincial upper class, being middle class in the regional context does not necessarily mean the same thing in the capital, although being marked as lower class would translate to the same category in Lima or Trujillo.

An important study by anthropologist Carlos E. Aramburu and his colleagues in 1989 provides a graphic outline of how levels of living vary throughout the nation. Analyzing the 1981 census, they ranked the 153 provinces on the basis of five variables: the proportion of households without any modern household appliance; the average per capita income; the percentage of illiterate women over fifteen years of age; the number of children between six and nine years of age who regularly worked; and the rate of infant mortality. These indicators were representative of involvement in the economy, participation in state-operated institutions, and access to health services, each of which is critical for marking advances in the level of living from the perspective of the modern state. Only 9 of the 100 highland provinces were represented among those in the top two levels of wealth, and only Arequipa was in the top rank. In contrast to the Selva provinces, which lacked any rank, eighteen of the twenty-eight coastal provinces registered in the top third of provinces according to wealth. At the other end of the scale, all but three of the poorest fifty-three provinces with 20 percent of the population were in the highlands, and none were on the coast. These data, when juxtaposed with the distribution of monolingual Quechua and Aymara speakers, confirm the poverty status of Peru's native population at the bottom of the socioeconomic scale.

Thus, the provincial upper classes, with few exceptions, do not equate with the Lima-based national elite, whose socioeconomic position is vastly enhanced by their status as Lima residents and, subsequently, by their international connections. The same can be said for the other middle and lower sectors of the provincial population in comparison to Lima. In a very real sense then, Peru has two levels of class structure layered in between the national extremes of the oligarchic elites and the rural native peasantry: one in the context of Lima's primacy, the other with reference to the rest of the nation.

Although the role of racial phenotypes and associated ethnic behaviors is clearly seen at the extreme poles of Peruvian society, it is somewhat obscured in the middle sectors. In general, the more closely one approximates the ideal of Euro-American appearance, the greater the social prestige and status derived. On the other hand, Peru is a country whose majority population is darker skinned, with distinctive facial and bodily features. The varied shades of meaning attached to the designations mestizo and cholo are as much socioeconomic and cultural in import as they are racial. Thus, in the Peruvian vernacular phrase, "money whitens" one's self-concept and expectations.

With other non-native groups, such as the Japanese, Chinese, and Afro-Peruvians, status and class considerations are structured somewhat differently, yet exhibit the same tendencies toward ethnoracist marking. Just how strongly stereotypes have prevailed over facts was witnessed by the 1990 presidential election of the Japanese-Peruvian Alberto Fujimori, who was constantly referred to as el chinito (the little Chinaman). Racial terms are frequently employed in normal discourse in ways that many foreigners find uncomfortable. Afro-Peruvians are referred to as zambos negritos, or more politely as morenos (browns). In many instances, this terminology implies behavioral expectations and stereotypes, and yet in others the same term is simply used as an impartial means of description.

Peru

Peru - FAMILY LIFE

Much has been said about kinship and family in Latin America. The "Peruvian family" is of course not a homogeneous entity, but rather reflects both ethnic and socioeconomic factors. If there is a generalization to be made, however, it is that families in Peru, no matter what their status, show a high degree of unity, purpose, and integration through generations, as well as in the nuclear unit. The average size for families for the nation as a whole is 5.1 persons per household, with the urban areas registering slightly more than this and, contrary to what might be expected, rural families, especially in the highlands, being smaller, with a national average size of 4.9 persons. This apparent anomaly runs counter to the expected image of the rural family. This is because the highland families that constitute the bulk of rural households have been deeply affected by the heavy migration of their members to the cities, coastal farms, and Selva colonizations.

The roles of the different family members and sexes tend to follow rather uniform patterns within social class and cultural configurations. In terms of family affairs, Hispanic Peruvian patterns are strongly centered on the father as family head, although women increasingly occupy this titular role in rural as well as urban areas, amounting to 20 percent of all households. As is the pattern in other countries, women have increasingly sought wage and salaried work to meet family needs. This, coupled with the fact that social and economic stress has forced a departure from the traditionally practiced versions, the patriarchal family is gradually losing its place as the model of family life. Contributing to these changes are the neolocality of nuclear families living in cities and the loss of male populations in rural areas through migration and various povertyrelated conditions that lead men to abandon their families. Families are patricentric, and the male head of household is considered the authority. His wife follows him in this respect, yet exercises considerable control over her own affairs with respect to property and marketing. This gender and lineage hierarchy is to be seen as families walk single-file to market, each carrying their bundles, the husband leading the way, followed by his wife and then the children.

In many Quechua communities, the ancient kinship system of patrilineages (called kastas in some areas) survives. It is thought to have been the basis for the Incaic clan village, the ayllu. In a patrilineal system, wives belong to their father's lineage and their children to their father's side of the family tree. This differs from the Hispanic system, which is bilateral, that is, including one's mother's kin as part of the extended family, as in the British system. Where the native Americans follow a patrilineal system, families are at once at odds with the formal requirement of Peruvian law, which demands the use of both paternal and maternal names as part of one's official identity, thus forcing the bilateral pattern on them.

In many Hispanic mestizo homes, fathers often exercise strong authoritarian roles, controlling the family budget, administering discipline, and representing the group interest to the external world. Mothers in these homes, on the other hand, often control and manage the internal affairs in the household, assigning tasks to children and to the female servant(s) present in virtually every urban middle- and upper-class home. For children school is de rigueur, and the more well-to-do, the more certain it is that they attend a private school, where the educational standards approach or equal good schools in other countries. The home is prized and well-cared for, with patios and yards protected by glass-studded walls and, in recent years, by electrical devices to keep out thieves.

The lower-class household in the urban areas--such as Lima, Trujillo, or Arequipa--presents the other side of this coin. In metropolitan Lima, 7 percent of the population lives in a tugurio (inner-city barrio) and 47 percent in a squatter settlement. The older pueblos jovenes erected in the 1950s had the look in 1990 of concrete middle-class permanency, with electricity, water, and sewerage. The newer invaded areas, however, had a raw and dusty look: housing appeared ramshackle, made of bamboo matting (esteras) and miscellaneous construction materials scrounged from any available source. Here, as in the tugurios, the domestic scene reveals a constant scramble for existence: the men generally leave at the crack of dawn to travel via long bus routes to reach work sites, often in heavy construction, where without protective gear, such as hard hats or steel-toed shoes, they haul iron bars and buckets of cement up rickety planks and scaffolding. With an abundance of men desperate for work, modern buildings are raised more with intensive labor than machinery.

Women's roles in the squatter settlements cover a wide variety of tasks, including hauling water from corner spigots and beginning the daily preparation of food over kerosene stoves. In the 1975-91 period, the food supply for substantial numbers of the urban lower class in Lima and other coastal cities came from the United States Food for Peace (Public Law 480) programs administered by private voluntary organizations. Women also keep their wide-ranging family members connected, seeking the food supply with meager funds, and doing various short-term jobs for cash. According to social scientist Carol Graham, the poor urban areas have a high percentage of female-headed households, as well as a large number of abandoned mothers who are left with the full responsibility for supporting their households and raising the children.

Urban Informal Sector

In 1990 the vast "informal sector" of Lima's economy was the most striking feature of its commercial life. There, 91,000 street vendors, 54 percent of them women, sold food in the streets or public squares of central Lima or the residential area of Miraflores, the upscale mecca of the city. Street vendors have been a part of Lima life and culture since early colonial times, and the city government has persistently attempted to remove them to fixed market places. Nevertheless, street commerce in Lima throughout the colonial period and until the twentieth century was generally regarded as a colorful, folkloric aspect of urban life and was often depicted in period paintings and descriptions. Since the great migrations began in the early 1950s, however, the city elites have come to disdain the street vendors who swarm over the R�mac Bridge every afternoon. As Hernando de Soto has abundantly documented in El otro sendero (The Other Path), this freewheeling entrepreneurial sector of the labor force was, in the 1980s, producing the equivalent of almost 40 percent of the national income. As "unregistered" business, this activity is outside the control of the national economic institutions, whose cumbersome and often corrupt bureaucratic regulations stifle initiatives, especially if one lacks resources to pay all the bribes and formal start-up costs. In the circumstances of 1991, the public need to participate in the economy had, in essence, neutralized and bypassed the official system.

Domestic Servants

The urban middle-class family without servants is incomplete. Although household servants constitute a major element in the urban informal economic sector, they are rarely analyzed as part of it. The retaining, training, disciplining, or recruiting of domestic help is constantly in progress under the supervision of the wife of the household head. One of the most common sights in Lima is therefore the small printed sign in front of houses reading "Se necesita muchacha" ("girl needed").

There is a constant flow of young highland migrant women to urban areas, and a very large portion of them seek domestic positions on first arriving in Lima. Although census figures were dated, it appeared that about 18 percent of all women employed in metropolitan Lima in 1990 were domestic servants. Domestic service work of course pays poorly, and social and sexual abuse appear often to accompany such employment. Nevertheless, in the absence of other alternatives, migrant women find these jobs temporarily useful in providing "free" housing and a context for learning city life, while also having some opportunity to attend night school to learn a profession, such as tailoring or cosmetology, two of the more popular fields. As domestic work has been increasingly regulated, the term empleada (employee) has begun to replace the use of muchacha as the term of reference. Over the 1960-91 period, households have been obliged to permit servants to attend school and to cover other costs, such as social security.

Godparenthood

Family life at all levels of society is nourished by an ample number of ceremonial events marking all rites of passage, such as birthdays, anniversaries, graduations, or important religious events, such as baptisms, confirmations, and marriages. Family life is thus marked by small fiestas celebrating these events and passages. In this context, Peruvians have greatly elaborated the Roman Catholic tradition of godparenthood (padrinazgo) to encompass more occasions than simply celebration of the sacraments of the church, although following the same format. The parties involved include the child or person sponsored in the ceremony, the parents, and the godparents who are the sponsors and protectors. The primary relationship in this triad is between the godchild (ahijado) and the godparents (padrinos). The secondary bond of compadrazgo is between the parents and godparents who after the ceremony will forever mutually call each other compadre or comadre. For the child, the relationship with the godparents is expected to be one of benefit, with the padrinos perhaps assisting with the godchild's education, finding employment, or, at the least, giving a small gift to the child from time to time. For the compadres, there is the expectation of a formalized friendship, one in which favors may be asked of either party.

Ritual sponsorship has two dimensions with respect to its importance to family and community. On the one hand, the mechanism can be utilized to solidify social and family relations within a small cluster of relatives and friends, which is generally the case for families concerned with enclosing their social universe for various reasons. Among the top upper class, it may provide a way of concentrating power relations, business interests, or wealth; among the Indian caste, the inward selection of compadres may follow the need to protect one's access to fields or to guarantee a debt. On the other hand, many families deliberately choose compadres from acquaintances or relatives who can assist in socioeconomic advancement. In this fashion, the original religious institution has lent itself to social needs in a dynamic and flexible manner. In the more closed type of community setting, there are only five or six occasions for which godparents are selected; among more socially mobile groups, there may be as many as fifteen or more ways in which a family may gain compadres. Thus, it would not be unusual for the parents of a family with four children to count as many as forty or more different compadres. In a more conservative setting, the number might be less than ten for a similar family.

Rural Family and Household

The Andean peasantry, often maligned by those who discriminate against them as being lazy and poor workers, are the reverse of the stereotype. The peasant family begins its day at dawn with the chores of animal husbandry, cutting the eucalyptus firewood, fetching water, and a plethora of other domestic tasks. Field work begins with a trek to the often distant chacras, which may be located at a different altitude from the home and require several hours to reach. Where chacras are very distant from the home, farmers maintain rough huts in which to store tools or stay for several days. Andean peasants of all ages and both sexes lead rigorous lives, hustling about steep pathways carrying loads of firewood, produce, and tools on their backs.

Although horses and mules are of greater market value than burros, they are more expensive to maintain, and thus burros are the most common beasts of burden in most of the highlands. Native Andean llamas and alpacas are commonly found in the central and southern Andes, where they are still widely used for transport, wool, and meat. Peasant women and girls, although carrying a burden, perpetually keep their hands at work spinning wool to be hand woven by local artisans into clothing, blankets, and ponchos. Although there are few who approach full selfsufficiency in the Andes (and none on the coast), the Andean peasantry make, repair, invent, and adapt most of their tools; they also prepare food from grain they have harvested and animals they have raised and butchered.

Although modern amenities and appliances have found their way into most nonfarm households, the rural poor by necessity must conduct their affairs without these instruments of pleasure and work. Even though consumer items--such as electric irons, blenders (especially useful for making baby food), televisions, and radiocassette tape players--are keenly desired, surveys have shown that 25 percent of all Peruvian households possess none of these things. The great majority of households (more than 50 percent) lacking modern appliances were in the rural areas of the Andes. The contributions of many hands, therefore, are vital to the rural economy and household. The same survey by Carlos Aramburu and his associates also showed that the poorest and most rural areas were also the provinces that in demographic terms had the highest dependency ratios (the largest number of persons--the very young and the aged--who were only limited participants in the labor force). Consequently, the loss of youth to migration cuts deeply into the productive capacity of hundreds of families and their communities. In those districts in the central highlands especially, where the Shining Path has been active since the early 1980s, the absolute decline in work force numbers has left a third of the houses empty, fields in permanent fallow, and irrigation works in disrepair, losses which Peru could ill afford in view of its declining agricultural production and great dependency on imported foodstuffs, even in rural areas.

These demographic changes also threaten other community and family institutions like the use of festive and exchange-labor systems (minka and ayni, respectively) that have been such an integral part of the traditional peasant farm tradition. The minka involves a family working side by side with relatives and neighbors to plant or harvest, often with the accompaniment of musicians and always with ample basic food supplied by the hosts. On some occasions, invited workers may request token amounts of the harvest. Exchange labor, or ayni, is the fulfillment of an obligation to return the labor that someone else has produced. The communities of peasant farmers, whether native or cholo, utilize these mechanisms to augment family labor at critical times. Minka work crews, however, are often inefficient and overly festive, and their hosts are unable to keep activities task-oriented on a late afternoon. As a consequence, farmers who are mainly concerned with monetary profitability, tend to utilize paid temporary workers instead of the minka, whose ceremonial aspects are distracting. On the other hand, the purpose of the minka is obviously social and communal, as well as economic. Family economic activity in rural communities has invariably relied primarily on unpaid family labor, augmented by periodic cooperative assistance from relatives and neighbors to handle larger seasonal tasks.

Peru

Peru - COMMUNITY LIFE AND INSTITUTIONS

The importance of developing and maintaining effective intracommunity relationships underlies many of the kinship traditions that are universal in Andean and Peruvian family life in small towns. Throughout the Andes, there has been a constant need for peasants to retain strong interpersonal and family bonds for significant socioeconomic reasons. For centuries the peasantry suffered the constant loss of land until the Agrarian Reform Law of 1969 reversed the pattern. The stronger a community is tied together, the greater has been its ability to defend its interests against usurpers, a fact often shown in ethnographic studies throughout the region.

By practice and reputation, Andean villages and towns often enjoy reputations for cohesiveness, community action, and the good, simple life. The tight social relationships in Peru's towns and villages, peasant communities, and small cities, however, are not necessarily based on "rural" or agricultural needs and a positive community spirit. Even in small populations where everyone knows everyone else, or knows about them, there can be marked ethnic and social class differences and rivalries that afford many opportunities for disagreement and feuds. Although people share their culture, values, and participation in a community, family interests often clash over property ownership and chacra boundaries, local politics, and any of the myriad reasons why people might not like each other. Thus, small town life can be difficult when conflicts erupt: "pueblo chico, infierno grande" ("small town, big hell") is the expression used. There are, therefore, two contradicting images of small town life: one bucolic, tranquil, and good natured; the other, petty and conflictive. Both images are rooted in fact.

Peru

Peru - Catholicism and Community

Like many Latin American nations, Peru's predominant religion is Roman Catholicism, which after 460 years has remained a powerful influence in both state affairs and daily activities. Church activities and personnel are, of course, centered in Lima, symbolically located on the east side of the Plaza de Armas to one side of the National Palace and the Municipality of Lima, which occupy the north and west quarters, respectively, of the central square from which all points in Peru are measured. The ceremonial functions of the state are integrated into the rites of the church, beginning with the inauguration of the president with high mass in the cathedral, Holy Week events, and the observances of major Peruvian saints' days and festivals, such as that of Santa Rosa de Lima (Saint Rose of Lima) and others. The institutional role of the church was established with conquest and the viceroyalty, but since independence it has slowly declined through losing its exclusive control over the domains of education, maintenance of vital statistics, marriages, and the organization of daily life around church rites. Nevertheless, the ceremonial aspects of the Catholic religion, moral dictates, and values are profoundly embedded in Peruvian culture; parish priests and bishops play active roles in local affairs where they are present.

The policies of the church historically have been considered as very conservative, and the various parishes and bishoprics were great landlords, either managing their properties directly or renting them to other elites. Church districts with such properties were eagerly sought by ambitious clergy, many of whom even gained dubious reputations as hacendados. Throughout the highlands, the priesthood actively carried the colonial legacy in its dealings with the Quechua and Aymara peoples until the decade of the 1950s, when many foreign priests, notably the Maryknolls in Puno, began introducing substantial changes in these traditional patterns. Part of this development resulted in the emergence of a strongly populist and social activist theme among many clergy, such as Gustavo Guti�rrez, whose 1973 book, A Theology of Liberation, was perhaps to have greater political impact outside of Peru than in it. The changes, however, were considerable, and many priests and nuns worked to assist the poor in ways that marked a turnabout in both style and concept of duty from a short generation before. Although the Peruvian priesthood has been thus invigorated, the church remains unable to fill a large percentage of its parishes on a regular basis, in part because of the demand for clergy in Lima and the other coastal cities.

Roman Catholicism, as the official state religion, has played a major role in Peruvian culture and society since conquest, with every village, town, and city having its official church or cathedral, patron saint, and special religious days, which are celebrated annually. These kinds of activities are focal events for reaffirming social identity and play key roles in the life of all types and sizes of community. Participation in these events is spurred by both religious devotion and desire to serve in community functions for prestige and perhaps political purposes. The most notable of these activities are the patronal festivals that each settlement annually celebrates. Costs for these affairs vary greatly, depending on the size of the town or community. In the case of large cities like Ica or Cusco, expenses are impressive. To underwrite the costs, localities have each developed their own methods of "taxation," although none would call it that. The most common method is to obtain "volunteers," who agree to serve as festival sponsors, called mayordomos, who can enlist their family members to aid in the work of organizing and paying for community-wide celebrations. In small places, the mayordomo and his or her family may handle the costs within the group, even going into debt to do things properly. In large towns and cities, the festivals are often sponsored by the municipal government as well as the church, with mayordomos serving in only limited capacities. In many towns, there is a religious brotherhood (hermandad) or other organization that also takes part in this fashion. Peru's largest religious celebration, the Se�or de los Milagros, which takes place in Lima during the month of October each year, is largely funded by the brotherhood of the Se�or de los Milagros.

In communities that maintain strong native cultural traditions, Roman Catholicism is intricately mixed with facets of Incaic beliefs and practices. The native populations hold firm animistic notions about the spirits and forces found in natural settings, such as the great snowpeaks where the apus (lords of sacred places) dwell. Many places are seen as inherently dangerous, emanating airs or essences that can cause illness, and are approached with care. The Incas and other Andean peoples revered the inti (sun) and pacha mama (earth mother), as well as other gods and the principal ancestral heads of lineages. The Spaniards, in converting the people to Catholicism, followed a deliberate strategy of syncretism that was used throughout the Americas. This process sought to substitute Christian saints for local deities, often using existing temple sites as the location of churches. Many of the biblical lessons and stories were conveyed through dramatic reenactments of those events at fiestas that permitted people to memorize the tales and participate in the telling. Thousands of Andean fiestas are based on such foundations.

The annual celebrations of village patron saints' days often coincide with important harvest periods and are clearly reinterpretations of preconquest harvest observances disguised as Catholic feast days. In the south highlands, among such pastoral peoples as those of Q'eros, Cusco preserves many ancestral practices and lifeways. Elaborate rites to promote the fertility of their llama and alpaca herds are still undertaken. In other communities, religious rites that evoke natural and spiritual forces require sacrifices of animals, such as llamas or guinea pigs, the spillage of chicha or alcohol on sacred ground, or the burying of coca and other ritual items to please the apus or the pacha mama. In numerous highland areas, the Spanish introduced the Mediterranean custom of blood sports, such as bullfighting, bullbaiting, and games of horsemanship in which riders riding at full gallop attempt to wring the necks of fowl or condors. Jos� Mar�a Arguedas recounts these practices in his famous 1941 novel, Yawar Fiesta.

Andean religious practices conform to the sociocultural divisions of Peruvian society, with the Hispanicized coastal cities following general Roman Catholic practices, and the Andean towns and villages reflecting the syncretisms of conquest culture, which endure as strong elements in modern belief and worldview. The importance of these events is considerable because they evoke outpourings of devotion and emotional expressions of belief, while giving opportunity for spiritual renewal. They also function to tie the population together in their common belief and allegiance to the immortal figure of the saint or apu, and thus constitute important bonding mechanisms for families and neighborhoods. From the major celebrations--such as those of two specifically Peruvian saints, Santa Rosa of Lima and San Mart�n of Porres (Saint Martin of Porres)--to the dozens of important regional figures, such as the Virgin de la Puerta (Virgin of the Door) in La Libertad Department and the revered saints and crosses in village chapels, these feast days have a singular role in social life. Indeed, not only do settlements have religious allegiances, but so, too, do public institutions. For example, the armed forces celebrate the day of their patroness, the Virgen de las Mercedes (Virgin of the Mercedes--Our Lady of Ransom), with pomp and high-level participation around the country.

Since about 1970, Protestantism has been winning converts in Peru at a relatively rapid rate among the urban poor and certain Indian populations. Yet, Peruvians, like those in other Andean countries, have not been as receptive to Protestant entreaties to convert as have people in Central America. According to one study, only about 4.5 percent of Peruvians can be counted as Protestants, with the Church of Jesus Christ of Latter Day Saints (Mormons) forming about a quarter of the number and the rest belonging to various other groups. To many, the appeal of Protestantism comes in reaction to the kinds of ceremonial obligations that have accompanied Roman Catholic practice and the failure of the traditional church to address adequately the pressing issues that were problems among the poor.

Most intensive Protestant missionary attention has been directed toward the tribal peoples of the Amazon Basin, where the Summer Institute of Linguistics (SIL), Wycliffe Bible Translators, and similar evangelical groups have long worked. In particular, the SIL has occupied a peculiar position in Peru through its long-running contracts with the Ministry of Education to educate the numerous tribes, such as the Shipibo, and assist the government in developing linguistically correct texts for several groups. Nevertheless, nationalistic public reaction to the SIL's activities has provoked many attempts to force the organization out of Peru. Because the force behind the evangelical movements emanates largely from the United States and because Roman Catholicism is the official state religion, there have been occasional hints of loyalist hostility with respect to zealous proselytizing.

Catholic cults have also bloomed throughout Lima's squatter settlements. The role of religion and the fact that the people themselves generate institutions of worship with relatively little external guidance is yet another expression of the migrants' striving for a sense of community in the difficult circumstances of Lima's squatter settlements.

Peru

Peru - Community Leadership

Throughout the highlands, there are vestiges of the colonial civic and religious organizations of "indirect rule" originally implanted by Spanish officials. Where they survive in Peru, principally in Indian communities, there are networks of villages tied together in an association broadly supervised by a parish priest or his surrogate. The village religious leaders, who are called by various names such as alcaldes ped�neos (lesser mayors) and varayoq or envarados (staff bearers), plan and carry out elaborate yearly festival cycles involving dozens of lesser special lay religious authorities. Often referred to as carrying a "burden" or responsibility (cargo), all of these village officials are selected annually by elaborate systems of prestige rankings based on prior experience and local values of devotion, honesty, reputation for work, and capacity to underwrite the costs of office.

The principal officials in these hierarchies carry holy staffs of office, often made of chonta (tucuma) palm wood brought from the tropics and adorned with silver relics and symbols. The additional duties of the varayoq include the supervision of village morals, marriage, and the application of informal justice to offenders of village norms. Although specifically outlawed in several of Peru's older constitutions, the system has endured throughout the highlands. Changes have occurred, however, when communities, under pressures to modernize, abolished the varayoq institution. In other cases, the system has evolved into a more formal political apparatus, leaving the religious activities in the hands of the parish priest, lay brotherhoods, and other devotees. The multicommunity Peasant Patrols (rondas campesinas) in the highlands have acted as informal but powerful self-defense forces controlling rustling and, beginning in the 1980s, the intrusion of unwanted revolutionaries like the Shining Path. In aspects of their orientation and organization, they may aspire to resemble the varayoq as moral authorities.

The formal political and social organization of Peruvian towns and cities of course follows the outlines laid down in the constitution of 1979 and various laws enacted by the Congress. One of the somewhat confusing arrangements, however, pertains to the officially constituted corporate community enterprises, the Peasant Communities, and their offshoots--such as the Social Interest Agrarian Association (Sociedad Agr�cola de Inter�s Social--SAIS) and the Social Property Enterprises (Empresas de Propiedad Social--EPS). There is disagreement over how these entities fit into the community and political picture because their constituencies overlap with the political divisions. The districts and provinces are political subdivisions with elected mayors and council members charged with administering their areas. Corporate communities are a form of agrarian cooperative business that own inalienable land, with memberships that are not necessarily restricted to a single residential unit like a town.

The Peasant Communities and other units conduct their affairs through a president, as well as administrative and vigilance committees elected by the general assembly of the membership. Community property and members (comuneros) are within the administrative domains of districts and provinces for all other civic purposes. In some areas, the boundaries of the Peasant Communities coincide with those of a district, as is frequently the case in the Mantaro Valley. In other areas, community lands occupy only a portion of the district; there may also be two separate Peasant Communities within a district, or districts with residents who do not belong to the corporate organization.

Members of Peasant Communities and other corporate groups constitute about 30 percent of all rural people and therefore have been a significant factor in economic and political affairs throughout the highlands and in some areas of the Costa, where the former plantations passed into workers' hands after 1969. On the coast, there have long been linkages between worker unions and the regional political powers, but in the Sierra these ties have not developed strongly. The exception is in the central highland department of Jun�n and in the southern department of Puno, where in the 1980s there were powerful, organized movements based on Peasant Communities and independent small farmers groups allied with political parties. The influence of these groups was, for the most part, localized.

Peru

Peru - Landlords and Peasant Revolts in the Highlands

In the great majority of highland provinces, political and economic leadership and power were based on traditional social elites, a landlord class that controlled the haciendas and, thus, very large proportions of the rural poor. In these contexts, powerful landlords (terratenientes) manipulated political affairs, either by themselves holding positions of authority, such as the prefectures, municipal offices, and key government posts, or influencing those who did. A tradition of ruthlessness, greed, and abuse is associated with this system (gamonalismo) throughout Peru. A gamonal is a person to be feared because he has extraordinary and extralegal powers to protect his interests and act against others. Although the agrarian reform of 1969 did much to cut this power, local affairs in many districts and provinces have remained under such domination, to the deep resentment of the rural poor, who most directly feel its consequences.

Since the late nineteenth century, various regional movements have arisen to address abuse. Historian Wilfredo K�psoli Escudero had documented thirty-two peasant revolts and movements from 1879 to 1965, a number that is not exhaustive but which contradicts the view that Peru's native peasantry was passive in accepting its serfdom. Characteristically, virtually all of these efforts were specifically directed against the abuses of gamonales and hacendados, at least in their initial phases. The forces in the 1885 Ancash uprising, led by Pedro Pablo Atuspar�a, an alcalde ped�neo from a village near Huaraz, eventually captured and held the Callej�n de Huaylas Valley for several months before federal troops reclaimed it.

Most peasant revolts were not as dramatic, but all testified to the burgeoning feelings of frustration, anger, and alienation that had built up over the centuries. In part, this anger and frustration stemmed from the fact that native American communities had been deprived of their communal holdings after national independence, which meant that extensive holdings passed from community control to private elite interests. Demands for redress of this situation led to the reestablishment of the official Indian Community in 1920 during the second presidency of Augusto B. Legu�a (1919-30). Subsequently, communities that could prove they at one time had held colonial title to land were permitted to repossess it, a long and arduous bureaucratic process in which the most successful communities were those with active migrants in Lima who could lobby the government.

Another response was President Manuel A. Odr�a's (1948-56) sanctioning of the Cornell-Peru project in which the Ministry of Labor and Indian Affairs, in collaboration with Cornell University in Ithaca, New York, would conduct a demonstration of community development and land reform at Hacienda Vicos in Ancash Department, starting in 1952. It was Peru's first such development program and received extensive publicity around the country. This situation provoked consternation among landlords and elite interests, which purposefully delayed the conclusion of the project. The colonos of Vicos became an independent community in 1962, when they were finally permitted to purchase the estate they and their ancestors had cultivated for others for 368 years.

With its widespread publicity, the Vicos project helped to whet appetites for change. At that time, several hundred hacienda communities like Vicos were requesting similar projects and the freedom to purchase their lands. When the reluctant government of oligarch Manuel Prado y Ugarteche (1939-45, 1956-62) and the slow and corrupt mechanisms of the bureaucracy could not meet these rising demands, an explosive situation developed. Peasant invasions of hacienda lands began a few days after Fernando Bela�nde assumed office as president in 1963. He had promised to organize a land reform, and the native communities, in their words, were "helping" him keep his word. Hundreds of estates were taken over by peasants, provoking a national crisis that eventually subsided when Bela�nde convinced communities that his administration would fulfill its promises. It did not happen.

However, on the "Day of the Indian" (D�a de la Raza--Race Day), June 24, 1969, General Juan Velasco Alvarado (president, 1968-75), head of the populist "Revolutionary Government of the Armed Forces," decreed a sweeping and immediate land reform, ending serfdom and private latifundios that included the sacrosanct coastal plantations. Hope and expectations of the peasantry had never been higher, but the succeeding years brought back the frustration; serious problems resulted from natural disasters, the withdrawal of significant international credit and support from the United States for reform programs, bureaucratic failures, and a lack of welltrained personnel. After the Velasco government gave way to more conservative forces within the army in 1975, a retrenchment began. In this phase of the process, some haciendas, including several in Ayacucho Department, were returned to their former owners, provoking bitter disappointment and further alienation among the peasants.

Peru

Peru - Shining Path and Its Impact

The social history of the 1960s and 1970s is background for the emergence of the disturbing Shining Path (Sendero Luminoso-- SL) movement. Its many violent actions have been directed against locally elected municipal officials and anyone designated as a gamonal in the departments of Ayacucho, Huancavelica, Apur�mac, Jun�n, Hu�nuco, and portions of Ancash and Cusco departments, as well as some other areas designated as emergency zones where government control was deeply compromised. The Maoist-oriented SL opposed Lima as the metropolis that usurps resources from the rest of the nation. Like most past revolutionary movements (as opposed to peasant revolts) acting on behalf of the poor, the SL leadership has consisted of disgruntled and angry intellectuals, mestizos, and whites, apparently from provincial backgrounds. Many adherents have been recruited from university and high school ranks, where radical politicization has been a part of student culture since the late nineteenth century. Others have come from the cadres of embittered migrant youths living in urban lower-class surroundings, disaffected and frustrated school teachers, and the legions of alienated peasants in aggrieved highland provinces in Huancavelica, Ayacucho, and adjacent areas.

Peru's socioeconomic and political disarray has taken on its present pattern after four decades of extravagant demographic change, a truncated land reform that never received effective funding or ancillary support as needed in education, and incessant promises of development, jobs, and progress without fulfillment. The SL has sought to eliminate the perpetrators of past error to establish a new order of its own. The SL's vengeful approach appeared attractive to many, coming at a time when the migration pathway to social change appeared blocked, the ability to progress by this method stymied by the economic crisis, and rural development was at an all-time low ebb.

The immediate impact of the terror-inspiring violence of SL actions and the correspondingly symmetrical responses of the Peruvian Arm (Ej�rcito Peruano--EP) has had a devastating effect on rural and urban life, public institutions, and agricultural production, especially in the emergency zone department of Ayacucho. Since the SL's first brutal attack on the defenseless people of Chuschi, its actions and the violent reactions of the police and army have produced chaos throughout the central highlands and deep problems in Lima.

From 1980 to 1990, an estimated 200,000 persons were driven from their homes, with about 18,000 people killed, mostly in the department of Ayacucho and neighboring areas. In five provinces in Ayacucho, the resident population dropped by two-thirds, and many villages were virtual ghost towns. This migration went to Lima, Ica, and Huancayo, where disoriented peasants were offered little assistance and sometimes were attacked by the police as suspected Senderistas (SL members). Many communities have responded to SL attacks by organizing and fighting back. Towns or villages in La Libertad and Cajamarca departments, in particular, greatly amplified the system of rondas campesinas. Elsewhere, the army organized local militias and patrols to combat and ferret out SL cadres. Unfortunately, in addition to providing for defense all of these actions left room for abuses, and there were numerous cases of personal vendettas taking place that had little to do with the task.

There was no question that the SL's revolutionary terrorism was producing major disruptions and profound changes in Peruvian society. Surveys indicated that 71 percent of Peruvians agreed that poverty, social injustice, and the economic crisis were together the root cause of the SL's revolution, and that 68 percent identified the SL as the nation's most serious problem. Drug trafficking was ranked a distant second by only 11 percent of respondents. At least one conclusion, however, seemed abundantly clear: Peruvians had to address their longstanding and deeply interrelated ills of poverty, inequity, and ethnoracial discrimination if they hoped to take control of the situation.

Peru

Peru - EDUCATION

In Peru schooling is regarded as the sine qua non of progress and the key to personal advancement. In 1988 there were over 27,600 primary schools in Peru, one for virtually every hamlet with over 200 persons throughout the country. It is no exaggeration to say that the presence of a village school and teacher is considered by the poor as the most important first step on the road to "progress" out of poverty and a state of disrespect, if not for themselves, for their children. Because of the historical ethnic and racial discrimination against native peoples, the village school became the instrument and method by which one could learn Spanish, the most important step toward reducing one's "visibility" as an identifiable object of denigration and being able to gain mobility out of the native American caste. The primary school also has provided the means to become a recognized citizen because the exercise of citizenship and access to state services require (in fact, if not officially) a basic ability to use written and spoken Spanish. Thus, the spread of primary schools owed much to the deep desire on the part of the native and rural poor to disassociate themselves from the symbols of denigration. The thrust of Peruvian education has been oriented toward this end, however subtly or even unconsciously. School policies encouraged the discarding of native American clothing and language, and the frequent school plays and skits burlesqued native peoples' practices, such as coca chewing or fiestas, or equated indigenous culture with drunkenness and, often, stupidity and poverty, while at the same time exhorting native children to "lift themselves up." The opposite pole to being native American was to be Spanish- speaking, urban, white-collar, and educated.

The influence of these educational policies is reflected in the currents of social change sweeping Peru in the second half of the twentieth century. In the early 1960s, Peru was a nation where almost 39 percent of the population spoke native languages, half being bilingual in Spanish and half monolingual in a native tongue. By 1981 only 9 percent were monolingual, and 18 percent remained bilingual. In 1990 over 72 percent claimed to speak only Spanish, whereas in 1961, about 60 percent did. In 1990 Quechua was by far the dominant native language spoken in all departments, except Amazonas and Ucayali. Almost 80 percent of Aymara speakers lived in Puno, with many bilingual persons in Arequipa, greater Lima, Tacna, and Moquegua. About 85 percent of the population in 1991 was literate.

There are many technical and cultural difficulties associated with gathering and reporting information on native languages. Because of this, most experts have concluded that native languages are significantly underreported with respect to bilingualism. According to one study, native languages are the preferred means of communication even within those households whose adult members are bilingual. However, given the force of state policy in education and the many concomitant pressures on the individual, Quechua and Aymara will likely survive largely as second languages.

In the Sierra, where villages and communities are famous for their voluntary work, the majority of self-financed public community projects have been dedicated to the construction and maintenance of their escuelitas (little schools) with little assistance except from their migrant clubs and associations in Lima or other large cities. This overwhelming drive to change personal, family, and community conditions by means of education began at least 150 years ago, at a time when public education was extremely limited and private schooling was open to only the elite mestizo and white populations of the few major cities. In 1990, however, 28 percent of all Peruvians, over 5 million people, were matriculated in primary or secondary schools, which were now within reach of people even in the remotest of places.

In the mid-nineteenth century, aside from a few progressive districts that operated municipal schools, most educational institutions were privately operated. Individual teachers would simply open their own institutes and through modest advertising gain a clientele of paying students. There have been laws mandating public education since the beginning of the republic, but they were not widely implemented. In 1866 the minister of justice and education sought to establish vocational schools and uniform curricula for all public schools and to open schools to women. The Constitutional Congress in 1867 idealistically called for a secondary school for each sex in every provincial capital. With constitutional changes and renewed attempts to modernize, it became the obligation of every department and province to have full primary and secondary education available, at least in theory, to any resident. Primary education was later declared both free and compulsory for all citizens.

The Ministry of Education in Lima exercises authority over a sprawling network of schools for which it uniformly determines curricula, textbook content, and the general values that guide classroom activities nationwide. Because of the importance invested in education, the role of the teacher is respected, especially at the district level, where teachers readily occupy leadership positions. Owing to this tendency, for many years teachers were prohibited from holding public office on the theory that they would, like priests, exercise an unusual level of influence in their districts. The power accruing to a teacher as the only person with postsecondary education in a small rural town can be considerable: the teacher is sought out to solve personal and village problems, settle disputes, and act as spokesperson for the community. Both men and women have eagerly sought teaching positions because they have offered a unique opportunity for personal advancement. In a nation steeped in androcentric traditions, however, teaching has been especially important for women because it has been an avenue of achieving upward mobility, gaining respect, and playing sociopolitical roles in community affairs that have been otherwise closed to them.

Higher education is hence greatly respected. University professors symbolize a high order of achievement, and they are addressed as profesor or profesora. The same recognition of educational achievement is given to other fields as well. Anyone receiving an advanced degree in engineering is always addressed as engineer (ingeniero) or doctor. The titles are prestigious and valued and permanently identify one as an educated person to be rewarded with respect. The titles are therefore coveted, and on graduation the new status is often announced in El Comercio, Lima's oldest daily newspaper.

In 1990, in addition to its primary schools, Peru counted over 5,400 secondary schools (colegios) of all types. Although these too were widely distributed throughout the country, the best secondary schools were heavily concentrated in the major cities and especially in Lima. There, the elite private international institutions and Peruvian Catholic schools have offered excellent programs featuring multilingual instruction and preparation aimed at linking students with foreign universities. The private Catholic schools throughout the country, both primary and secondary, have been highly regarded for their efforts to instill discipline and character.

Because it is required by law that each provincial capital have a public secondary school, such schools historically have come to enjoy special status as surrogate intellectual centers in the absence of universities in their regions. The tradition of strong high school alumni allegiance is pronounced, with organizations and reunions commonplace and attachments to classmates (condisc�pulos) enduring. The importance of a high school diploma is further emphasized by each graduating class, which bestows honor on some personage or event by naming its graduation after them. High school graduates take the selection of the class name as an opportunity to make a statement about things that concern them and choose one that embodies their thoughts. This custom is followed by university graduating classes as well.

Because people correlate social and economic well-being with educational achievement, schooling becomes essential not only for its functional usefulness but also for social reasons. The concept of education is infused with high intrinsic value, and educated people by definition are more cultivated (culto), worthy, and qualified to be admired as role models than others. Educated persons are thought to have the duty to speak out and address public issues on behalf of others less privileged; many students have accepted this responsibility as part of their student role.

The development of national identity is another area to which public education is firmly committed. In the wake of the devastating War of the Pacific--in which Peru lost territory, wealth, dignity, and pride--the emergent public school system became the major vehicle by which citizens established strong linkages to the state. Primary and secondary school curricula are thus heavily laden with patriotic, if not jingoistic, nationalism, elements of which are written into the nation's textbooks by the Ministry of Education. If nothing else, the primary school pupil learns that he or she is a Peruvian and that many of Peru's national heroes, such as Admiral Miguel Grau, Colonel Francisco Bolognesi, and Leoncio Prado, were martyrized on the nation's behalf by Chilean forces against whom one must be constantly on guard. Ecuador is viewed in this same tenor, but perceived as less menacing, constituting a vague threat to the nation's security or Amazonic oil rights.

The school calendar is thus filled with observances and ceremonies honoring national heroes and martyrs, including T�pac Amaru II (Jos� Gabriel Condorcanqui). Parades, drum and bugle corps (banda de querra--war band), and flag bearers spend dozens of hours in school yards preparing for the celebration of national holidays (fiestas patrias), national independence day affairs that are the feature of every district, province, and department capital each year on July 27 and 28. In Lima the tradition of fiestas patrias involves a major display of military forces and equipment accompanied by high school units parading the length of Avenida Brasil (Brazil Avenue) across Lima. Completing the essentially military focus on nationalism in the public schools is the pupil uniform, a military cadet-type outfit for boys that includes a cap introduced by the General Manuel Odr�a regime in the 1950s.

<>Universities

Peru

Peru - Universities

As the first university founded in the Americas in 1551, the National Autonomous University of San Marcos (Universidad Nacional Aut�nomo de San Marcos--UNAM) has had a long and varied history of elitism, reform, populism, controversy, respect, prestige, and, especially since the mid-1980s, conflict and confusion born of political divisions and broad social unrest. Although it remained the largest university in the nation, it had lost much of its former prestige by 1990. In the 1970-90 period, several smaller private institutions, such as the Pontifical Catholic University of Peru (Pont�fica Universidad Cat�lica del Per�), located in <"http://worldfacts.us/Peru-Lima.htm">Lima, have gained more stature. The major public universities are the specialized National Agrarian University (Universidad Nacional Agrario--UNA) in Lima's La Molina District and the National Engineering University (Universidad Nacional de Ingenier�a), also in the Lima area. The most prestigious medical school is the private Cayetano Hered�a in Lima.

Lima has captured most of the resources of higher education. Universities in Lima, which had 42 percent of all students, employed 62 percent of all faculty in the late 1980s. Nevertheless, there are universities in all but four of the departments. Although many of these are newly founded and poorly equipped, the demand for access to advanced study has provided them with a growing stream of students. The abandoned colonial University of Huamanga (Universidad de Huamanga) in Ayacucho is one of these, having been reopened in the late 1950s to fill an educational void for students drawn from impoverished and isolated Ayacucho Department. Although initiated on its modern course with high hopes, it has suffered from budgetary inadequacies, frustrated plans, and disgruntled students impatient for social change. During the late 1960s, it became the home to embittered revolutionaries, who emerged as the leaders of the SL movement.

The public schools have long been deeply influenced by political factionalism, which has divided the constitutionally established governing bodies of universities. Internal politics at San Marcos and other universities have involved complex alliance-making among administrators, staff, faculty, and the student body, as well as partisan political forces that crosscut these sectors with their own agendas. Thus, APRA, various communist factions, and other groups have played out their strategies, often with negative consequences or even little direct reference to the mission of education as such. APRA, however, did play a role in establishing the University of the Center (Universidad del Centro) in Huancayo and Federico Villareal in Lima, now the second-largest university. The present organization of the public universities was originally conceived as a result of the Latin American-wide university reform movement of the 1920s and 1930s which attempted to democratize the traditional, colonial-style elite traditions. What has evolved, however, has led to constant problems of paralytic conflict, student strikes, slogan mongering, and, often, closure of a university for one or more semesters at a time. As a result, the private universities, such as those tied to the Catholic Church and various segments of the upper-middle classes, have emerged as the most stable and best staffed institutions during the last twenty-five years.

Out of this milieu, one can begin to understand the political role of teachers and their organizations, such as the Trade Union of Education Workers (Sindicato �nico de Trabajadores de la Ense�anza del Per�--SUTEP), the national teachers union. Most teachers attend teaching colleges before entering the classroom with their certificates, and many of these colleges, such as La Cantuta outside of Lima, have long been centers for radical politics. With teachers earning less than the average beginning police officer, discontent has run high among teachers for many years. Thus, given the importance and role of teachers in district schools nationwide, it is not surprising that SUTEP has been a strong voice in expressing its social and economic discontent or that the SL and MRTA had succeeded in recruiting followers from the ranks of SUTEP.

Peru

Peru - HEALTH

In the early 1990s, Peru was hit by a cholera epidemic, which highlighted longstanding health care problems. Review of health statistics amply illustrates Peru's vulnerability to disease and the uneven distribution of resources to combat it. The most and the best of the health facilities were concentrated in metropolitan Lima, followed by the principal older coastal cities, including Arequipa, and the rest of the country. The differences among these regions were not trivial. Whereas Lima had a doctor for every 400 persons on average, and other coastal areas had a ratio of one doctor for every 2,000, the highland departments had one doctor for every 12,000 persons. The same levels of difference applied with respect to hospital beds, nurses, and all the medical specialties.

In the early 1990s, over 25 percent of urban residences and over 90 percent of rural residences lacked basic potable water and sewerage. Thus, the population has been inevitably exposed to a wide variety of waterborne diseases. The incidence of disease not surprisingly reflected the inequities evidenced in the health system: the leading causes of death by infectious diseases have varied from year to year, but invariably the principal ones have been respiratory infections, gastroenteritis, common colds, malaria, tuberculosis, influenza, measles, chicken pox, and whooping cough. The cholera epidemic, which began in 1990 and claimed international headlines, ranked well down the list of causes for death behind these others, which have been endemic and basically taken for granted. In a typical case, during one year in Huaylas District, which had a small clinic and often was fortunate enough to have a doctor in residence, 40 percent of all deaths registered were children below four years of age, who died because of a regional influenza epidemic.

Although Peru's infant mortality rate per 1,000 live births dropped from 130 to 80 over a 26-year period (1965-91), the rate in 1991 was still over twice the rate of Colombia and four times the rate of Chile. The mortality rate for children under 5 was also brought down greatly, from 233 per 1,000 in 1960 to 107 per 1,000 in 1991. Both measures for 1991 still exceeded all the other Latin American countries except Bolivia and Haiti. The only direct measure of social welfare that deteriorated was nutrition: calorie consumption per capita fell 5 percent from the average for 1964-66 to 1984-86. In 1988 calorie consumption was 2,269, as compared with 2,328 in 1987. Because calorie consumption levels generally parallel income levels, the decrease must have been concentrated at the level of the extremely poor.

Peru's lack of general well-being was further suggested by the nation's high and growing dependence on foreign food since 1975 through direct imports, which had increased 300 percent, and food assistance programs, which showed a tenfold increment. The United States has been by far the largest provider of food assistance to Peru through its multiple programs administered under the Food for Peace (Public Law 480) projects of the United States Agency for International Development (AID). During the 1980s, food aid amounted to over 50 percent of all United States economic assistance. The aid was delivered as maternal and child health assistance and food-for-work programs administered by CARE (Cooperative for American Relief), church-related private voluntary organizations, or by direct sale to the Peruvian government for urban market resale.

Peru's totally inadequate social security system, operated by the Peruvian Institute of Social Security (Instituto Peruano de Seguridad Social--IPSS), did not remain exempt from the Fujimori government's privatization policy. As a result of two legislative decrees passed in November 1991, Peru's system for providing social security retirement and health benefits underwent significant modification. The changes were similar to those made by the military government of Chile in the early 1980s, when employees were given a choice of either remaining with the existing system or joining private systems set up on an individual capitalization basis. The Fujimori government decided to adopt the Chilean social security model almost completely. The stated objectives were to permit open market competition, alleviate the government's financial burden by having it shared by the private sector, improve coverage and the quality of benefits, and provide wider access to other social sectors. Private Pension Funds Administrators (Administradoras de Fondos de Pensiones--AFPs) were expected to begin operating in June 1993. A presidential decree in December 1992 ended the IPSS's monopoly on pensions. This provided a boost to Peru's small and underdeveloped capital market by allowing the AFPs to invest in bonds issued by the government or Central Reserve Bank (Banco Central de Reservas--BCR, also known as Central Bank) as well as in companies.

The cholera and other health and social issues in Peru were interrelated closely with the country's steadily worsening environmental conditions. The high levels of pollution in large sectors of Lima, Chimbote, and other coastal centers had resulted from uncontrolled dumping of industrial, automotive, and domestic wastes that had created a gaseous atmosphere. The loss of irrigated coastal farmland to urban sprawl, erosion of highland farms, and the clear-cutting of Amazonian forest all have conspired to impoverish the nation's most valuable natural resources and further exacerbate social dilemmas. Although Peru is endowed with perhaps the widest range of resources in South America, somehow they have never been coherently or effectively utilized to construct a balanced and progressive society. The irony of Peru's condition was captured long ago in the characterization of the nation as being a "pauper sitting on a throne of gold." How to put the gold in the pauper's pockets without destroying the chair on which to sit is a puzzle that Peruvians and their international supporters have yet to solve.

Peru

Peru - The Economy

THE PERUVIAN ECONOMY achieved a higher rate of economic growth than the average for Latin America from 1950 to 1965, but since then has turned from one of the more dynamic to one of the most deeply troubled economies in the region. Even in the period of rapid growth, Peru was characterized by exceptionally high degrees of poverty and inequality, and since the late 1980s poverty has become much worse. Major changes in economic strategy introduced in 1990 and 1991 offer new hope for future growth but have not been oriented toward reduction of poverty and inequality.

In the first post-World War II decades, Peru achieved an above-average rate of growth with low levels of inflation and with rising exports of its diversified primary products. Output per capita grew 2.9 percent a year in the decade of the 1950s and then 3.2 percent annually in the first half of the 1960s, compared with the regional growth rate of 2.0 percent for these fifteen years. As of 1960, income per capita was 17 percent above the median for Latin American countries. However, since the mid1960s the economy has run into increasing difficulties. Output per capita failed to grow at all from 1965 to 1988, then fell below its 1965 level in 1989 and 1990. The previously moderate rate of inflation accelerated, balance of payments deficits became a chronic problem, and the country accumulated a deep external debt. As poverty worsened, political violence in the countryside and cities grew increasingly intense. The economy and the society as a whole seemed to lose coherence and any sense of direction.

The reasons for this deterioration from 1965 to 1991 are complex and very much open to debate. Many aspects of the debate center on two opposing conceptions of what national economic strategy and goals should be. One conviction is that the best course is to keep the economic system open to foreign trade and investment, to avoid extensive government intervention in the economy, and to rely mainly on private enterprise for basic decisions on production and investment. The contrary conception favors restricting foreign trade and investment while promoting an active government role in the economy to accelerate industrialization, to reduce inequality, and to control the actions of private investors. The conflict between these economic models is familiar in the experience of all Latin American countries. The failure to reconcile them in Peru has been an important factor in the deteriorating economic performance since the mid-1960s.

At least five interacting problems have been important in the explanation of why the economy has deteriorated so badly since the mid-1960s. First, natural resource limits began to handicap further expansion of primary product exports, requiring difficult changes in the structures of production and trade. Second, partly in response to these constraints, and partly as a matter of a growing conviction that the country needed to industrialize more rapidly, successive governments began to promote industrialization through protection against imports, reversing the country's traditional policy of relatively open trade. Third, dissatisfaction with widespread inequality and poverty encouraged attempts at radical social change, but the two governments that tried to lead the way--those of General Juan Velasco Alvarado (1968-75) and Alan Garc�a P�rez (1985-90)--failed to find any effective answers or to maintain viable macroeconomic policies. Fourth, the temporary move back toward a more open economy under the second government of Fernando Bela�nde Terry (1980-85) resulted in a surge of imports and an external crisis--mainly because of currency overvaluation and an excessively rapid rise of government spending--that again discredited this approach. And finally, rural violence took on a profoundly destructive character with the growth of the Shining Path (Sendero Luminoso-- SL) and the cocaine industry. On top of those two sources of violence, weakening governmental capability to maintain order and worsening conditions of employment led to growing security problems in cities.

Deteriorating conditions since the mid-1960s need to be considered against the background of a deeply divided society and a considerable lag, compared with many other Latin American countries, in developing either a competitive industrial sector or a modern structure of public administration able to implement public policies effectively. These handicaps can be overstated. After all, the Peruvian economy functioned well up to the mid1960s , and both private business and government officials have gained experience since then. As of the beginning of the 1990s, however, the country's prolonged decline had seriously undermined public confidence in the possibilities for recuperation and renewed growth.

The most evident symptoms of the crisis at the beginning of the 1990s were falling national output and income, high levels of unemployment and underemployment, worsening poverty and violence, accelerating inflation, and deep external debt. Under the Bela�nde administration, the external debt grew too high for Peru to meet scheduled service payments, although the government maintained the position that payments would be resumed when possible. Under the next government, Garc�a made a point of declaring that payments would be unilaterally limited to 10 percent of export earnings. His more aggressive position led to a near-total cutoff of external credit, which remained in effect throughout his term.

The government of Alberto K. Fujimori (1990- ) adopted a drastic stabilization program to break out of this complex of problems by first attacking the forces driving inflation. The initial shock of the new measures, which more than doubled the consumer price level in a single day, nearly paralyzed markets and production. After a steep fall in output, the economy began to stabilize with a lower rate of inflation but without any strong signs of recovery. Although the Fujimori program included many lines of intended action beyond the initial shock, it remained incomplete in many respects. It raised a host of questions about what other policies would reactivate the economy while preventing any further burst of inflation, and how long it would take to restore something like Peru's earlier capacity for growth.

Peru

Peru - History of the Economy

Through the nineteenth century and into the mid-twentieth century, the great majority of the Peruvian population depended on agriculture and lived in the countryside. By 1876 Lima was the only Peruvian city with over 100,000 people--only 4 percent of the population. Much of the impetus for economic growth came from primary exports. In common with the rest of Latin America up to the 1930s, Peru maintained an open economic system with little government intervention and few restrictions on either imports or foreign investment. Such investment became highly important in the twentieth century, especially in the extraction of raw materials for export.

For many Latin American countries, the impact of falling export prices and curtailed external credit in the Great Depression of the 1930s led to fundamental changes in economic policies. Many governments began to raise protection against imports in order to stimulate domestic industry and to take more active roles in shaping economic change. But Peru held back from this common move and kept on with a relatively open economy. That put it behind many other countries in post-World War II industrialization and led to increasing pressures for change. Significant protection started in the 1960s, accompanied by both new restrictions on foreign investment and a more active role of government in the economy.

One of the country's basic problems has been that the growth of population in the twentieth century outran the capability to use labor productively. The ratio of arable land to population-- much lower than the average for Latin America--continued decreasing through the 1970s. Employment in the modern manufacturing sector did not grow fast enough to keep up with the growth of the labor force, let alone provide enough opportunities for people moving out of rural poverty to seek urban employment. The manufacturing sector's employment as a share of the labor force fell from 13 percent in 1950 to 10 percent in 1990.

Orientation Toward Primary Product Exports

Peru's most famous exports have been gold, silver, and guano. Its gold was taken out on a large scale by the Spanish for many years following the conquest and is of little significance now, but silver remains an important export. Guano served as Europe's most important fertilizer in the mid-nineteenth century and made Peru for a time the largest Latin American exporter to Europe. The guano boom ran out about 1870, after generating a long period of exceptional economic growth. When the guano boom ended, the economy retreated temporarily but then recovered with two new directions for expansion. One was a new set of primary product exports and the other a turn toward more industrial production for the domestic market.

The alternative primary exports that initially replaced guano included silver, cotton, rubber, sugar, and lead. As of 1890, silver provided 33 percent of all export earnings, sugar 28 percent, and cotton, rubber, and wool collectively 37 percent. Copper became important at the beginning of the twentieth century, followed on a smaller scale by petroleum after 1915. Then, in the post-World War II period, fish meal from anchovies caught off the Peruvian coast became yet another highly valuable primary product export. Industrial products remained notably absent from Peru's list of exports until the 1970s. As late as 1960, manufactured goods were only 1 percent of total exports.

Manufacturing for the home market has had many ups and downs. The first major downturn came with the guano boom of the mid- nineteenth century. Foreign-exchange earnings from guano exports became so abundant and, therefore, imported goods so cheap that much of Peru's small-scale local industry went out of production. The end of the guano boom relieved this pressure, and in the 1890s a new factor, a prolonged depreciation of the currency, came into play to stimulate manufacturing. The currency was at that time based on silver, and falling world market prices for silver in this period acted to raise both import prices and export values (of products other than silver), relative to Peruvian costs of production. Without any overt change in national policies, Peru began a process of import-substitution industrialization combined with stronger incentives for exports. Domestic entrepreneurs responded successfully, and the economy began to show promising signs of more diversified and autonomous growth.

This redirection of Peruvian development was in turn sidetracked in the 1900-1930 period, in part by a decision to abandon the silver-based currency and adopt the gold standard instead. The change was intended to make the currency more stable and, in particular, to remove the inflationary effect of depreciation. The change succeeded in making the currency more stable and to some degree in holding down inflation, but Peruvian costs and prices nevertheless rose gradually relative to external prices. That trend hurt exports and the trade balance, especially in the 1920s, but instead of devaluing the currency to correct the country's weakening competitive position, the government chose to borrow abroad to keep up its value.

As has been noted, many Latin American countries reacted to the Great Depression by imposing extensive import restrictions and by adopting more activist government policies to promote industrialization. But at that point, Peru departed from the common pattern by rejecting the trend toward protection and intervention. After a brief experience with populist-style controls from 1945 to 1948, Peru returned to the open economy model and a basically conservative style of internal economic management, in sharp contrast to the growing emphasis on import substitution and government control in Argentina, Brazil, Chile, and Colombia.

Aided by the early recovery of some of its main exports in the 1930s, and then by development of new primary exports in the early post-World War II period, Peru had in many respects the most successful economy in Latin America up to the mid-1960s. But increasing pressure on the land from a rapidly growing population, accompanied by rising costs and limited supplies of some of the country's natural resources, began to intensify demands for change. One of the worst blows for continued reliance on growth of primary exports was a sudden drop in the fish catch that provided supplies for Peru's important fish meal exports; over-fishing plus adverse changes in the ocean currents off Peru cut supplies drastically in the early 1970s. That reversal coincided with supply problems in copper mining. Costs had begun to rise steeply in the older mines, and development of new projects required such large- scale investment that the foreign companies dominant in copper hesitated to go ahead with them. Further, population pressure and increasing difficulties in raising output of food converted Peru into an importer for a rising share of its food supply and began to work against use of land for agricultural exports. Although new investment and better agricultural techniques could presumably have helped a great deal, it began to seem likely that the only way to maintain high rates of growth would be to shift the structure of the economy more toward the industrial sector. Evolution of Foreign Investment

During its long period of attachment to an open economic system, Peru welcomed foreign investment and in some periods adopted tax laws specifically designed to encourage it. That is to say, until the 1960s the small fraction of Peruvians in a position to determine the country's economic policies welcomed foreign investment without paying much attention to growing signs of popular opposition. In the 1960s, many things changed. The major change for foreign investors was that growing criticism of their role in the economy led to nationalization of several of the largest firms and to much more restrictive legislation.

Foreign investment played a relatively minor role in the nineteenth century, although it included railroads, British interests in banking and oil, and United States participation in sugar production and exports. Its role grew rapidly in the twentieth century, concentrated especially in export fields. In 1901, just as Peruvian copper began to gain importance, United States firms entered and began buying up all but the smallest of the country's copper mines. The International Petroleum Company (IPC), a Canadian subsidiary of Standard Oil of New Jersey, established domination of oil production by 1914 through purchase of the restricted rights needed to work the main oil fields. The trend to foreign entry in manufacturing as well as finance and mining was stimulated by promotional legislation under the eleven-year government of Augusto B. Legu�a y Salcedo (1908-12, 1919-30), an initially elected president turned dictator who regarded foreign investment as the key to modernization of Peru. That much-publicized partnership between a repressive government and foreign investors was to play an important role for the future of Peru, by feeding convictions that foreign investment was inescapably linked to control of the country by the few at the expense of the public.

By the end of the 1920s, foreign firms accounted for over 60 percent of Peru's exports. The Great Depression of the 1930s changed that by bringing new foreign investment to a halt and by driving down the prices of the products of foreign firms (chiefly copper) much further than those exported by Peruvian firms. That double effect brought the share of exports by foreign firms down to about 30 percent by the end of the 1940s. Foreign investment remained low in the first postwar years, both because investors in the industrialized countries were preoccupied at home and because it was not encouraged by the populist government in Peru from 1945 to 1948. After a military coup installed a conservative dictator in 1948, the government offered a renewed welcome to foreign investors, made particularly effective by the Mining Code of 1950. This law offered very favorable tax provisions and quickly led to an upsurge of new investment. History repeated itself: as in the 1920s, a repressive government turned to foreign investors for economic growth and for its own support, adding fuel to widespread public distrust of foreign firms.

Public opposition to foreign ownership focused particularly on the largest firms owning and exporting natural resources, above all in copper and petroleum. The IPC became the center of increasing conflict over the terms of its operating rights and its financial support of conservative governments. When Bela�nde (1963-68, 1980-85) took office as president in 1963, he promised to reopen negotiations over the contract with IPC, but he then delayed the question for years and finally backed away from this promise in 1968. His failure to act provoked the military coup led by General Velasco, this time from the left wing. The Velasco government promptly nationalized IPC and started a determined campaign to restrict foreign investment. Although the government subsequently moderated its hostility to foreign firms, continuing disputes and then the deterioration of the economy led some companies to withdraw and held foreign investment down to very low levels through the 1980s.

The redirection of economic strategy under the Fujimori government in 1990-91 included a return to welcoming conditions for foreign investment, providing a much more favorable legal context, and disavowing completely the control-oriented policies of the governments of Velasco and Garc�a. Several foreign oil companies responded immediately, although the disorganized state of the economy and the context of political violence discouraged any general inflow of new foreign investment.

Peru

Peru - Agriculture

Perhaps the most important fact about the agricultural sector is that its production has not kept up with the growth of population. Total output of agriculture and fishing combined rose 63 percent between 1965 and 1988, but output per capita fell by 11 percent. Output per capita started falling in the early 1950s, climbed back up again to its 1950 level by 1970, then began a more pronounced and prolonged fall through the 1980s. Per capita output of food, as distinct from total agriculture, did better: it increased 1 percent during the period from the early 1980s to the late 1980s.

The downward trend in agricultural production per capita was accompanied by a fall in the share of output going to exports. From 1948 to 1952, Peru exported 23 percent of its agricultural output; by 1976 the export share was down to 8 percent. The trade balance for the agricultural sector remained consistently positive through the 1970s but then turned into an import surplus for the 1980s.

Although agricultural production in the aggregate failed to keep up with population growth, a few important products stood out as exceptions. With favorable support prices, output of rice increased at an annual rate of 7.9 percent in the 1980s. Changes in production techniques helped raise output of chickens and eggs at a rate of 6.5 percent in this period. The Ministry of Agriculture interpreted these positive results as evidence of what could be accomplished more generally with better incentives and improvement of agricultural techniques. For many crops, extremely wide variations in output per hectare, even in similar conditions of land and water supply, suggest that if effective extension services were implemented average productivity could be raised to levels closer to those achieved by leading producers. Contrary to the experience of many other countries in the region, productivity for most crops other than rice showed little or no improvement from 1979 to 1989.

Obstacles to increasing agricultural production include the poor quality of much of the country's land and the high degree of dependence on erratic supplies of water, plus the negative effects of public policies toward agriculture. Frequent recourse to price controls on food and in some periods to subsidized imports of food have hurt agricultural incentives as a byproduct of efforts to hold down prices for urban consumers. In general, government policies have persistently favored urban consumers at the expense of rural producers.

Another important set of questions bearing on agricultural productivity concerns the effects of the Agrarian Reform Law of 1969. The reform itself came long after the beginning of the decline in output per capita and was at first accompanied by a brief upturn. But the downtrend set in again from 1972 on and continued through the 1980s. The major question about the effects of the reform on productivity concerns the fact that most of the large estates taken away from prior owners were turned into cooperatives, made up of the former permanent workers on the estates. One problem was that the workers lacked management experience and a second was that incentives for individual participants were often unclear. Shares in earnings of the cooperative as a whole were not closely related to the individual member's time and effort, with the result that many of them concentrated on small parcels allocated to production for their own families rather than production for the cooperative. The performances of the cooperatives turned out to be highly varied. Some, particularly those with relatively good land and markets were able to raise output and group earnings more successfully than the previous landowners. But many were not, and by the end of the 1970s many of the cooperatives were either bankrupt or close to becoming so. The tension between individual incentives and concern for the functions of the cooperative as a whole led to a general turn toward "decollectivization" at the end of the 1970s, breaking up the cooperatives into individual holdings. When the practice was made legal by the Bela�nde government in 1980, it spread rapidly. The decollectivization has given Peruvian agriculture a much stronger component of individual family farming than it has ever had before. The large haciendas are gone, and the new farms are closer to a viable family-supporting size than has been true of the minifundios of the Sierra. The consequences for agricultural productivity and growth were still unclear in 1991: incentives for individual effort were greater but the smaller production units may have lost some economies of scale. An econometric study of land productivity in north-coast agriculture, tracing output from prior cooperatives through individual results with the same land in the 1980s, brings out a wide variety of results rather than any great change in total. It shows that the individual holdings have on average done slightly better than the preceding cooperatives on the same land, chiefly by greater inputs of labor per hectare, but not enough better to make any convincing case of superiority. The authors of this study rightly emphasize that results in the 1980s cannot be explained adequately only in terms of farming practices because productivity was also adversely affected by the deterioration of the economic system as a whole.

In addition to the negative effects on agriculture of economy-wide disequilibrium in the 1980s, some areas were badly hurt in this period by increased violence and partial depopulation. The violence worsened from 1988 through 1990, driving people out of farms and whole villages and leaving productive land and equipment idle. In some of the worst-hit areas, production had fallen in half.

Peru

Peru - Fishing

Peru's rich fishery has been utilized since ancient times, but it was not until the post-World War II decades that an extensive export industry developed. Peru's fishing industry rapidly expanded in the 1950s to make the country the world's foremost producer and exporter of fish meal. Although a large variety of fish are caught offshore, the rapid growth was primarily in the catching of anchovies for processing into fish meal. The fish meal boom provided a major stimulus to the economy and accounted for more than a quarter of exports in the mid1960s .

In the 1960s, however, there were indications that the nation's offshore fishing area was being overfished. Experts estimated that the fish catch should be about 8 to 9 million tons a year if overfishing was to be avoided. In 1965 the government attempted to limit the annual fish catch to 7 million tons but without success, partly because investments in ships and processing facilities greatly exceeded that level. By the late 1960s, a finite resource was being depleted. In 1970 the anchovy catch peaked at over 12 million tons.

Peru's rich fishing grounds are largely the result of the cold offshore Humboldt Current (Peruvian Current) that causes a welling up of marine and plant life on which the fish feed. Periodically, El Ni�o (The Christ-child), a warm-water current from the north, pushes farther south than normal and disrupts the flow of the Humboldt Current, destroying the feed for fish. In such years, the fish catch drops dramatically. The intrusion of El Ni�o occurred in 1965, 1972, and 1982-83, for example. The 1972 catch, a quarter its peak size, contributed to a crisis in the fish meal industry and the disappearance of fish meal as a leading Peruvian export during most of the 1970s.

In 1973 the government nationalized fish processing and marketing. However, the fish industry became a large drain on the government budget as the national fish company paid off former owners for their nationalized assets, reduced excess capacity, and processed a meager catch of less than 4 million tons. Partly to reduce the drain on revenue, in 1976 the government sold the fishing fleet back to private enterprise. Emphasis was also shifted away from fish meal, mainly from anchovies, to edible fish and exports of canned and frozen fish products.

The fishing industry recovered in the late 1970s, but the return of El Ni�o in 1982-83 devastated the industry until the mid-1980s. By 1986 the total fish catch exceeded 5.5 million tons and by 1988, 5.9 million tons, with exports of fish meal valued at US$379 million. The 1989 catch totaled 10 million tons, an increase of 34 percent over 1988, and fish meal exports were worth US$410 million. In late 1991, Congress passed a decree that eliminated all restrictions and monopolies on the production and marketing of fish products and encouraged investment in the industry.

Peru

Peru - Manufacturing

The industrial sector has had its problems too, especially in the 1980s. Manufacturing production grew more rapidly than the economy as a whole up to that decade. It increased at a compound annual rate of 3.8 percent between 1965 and 1980. But it grew only 1.6 percent a year from 1980 to 1988, and then plunged 23 percent in the ghastly economic conditions of 1989.

Of dominant importance in the 1980s were food processing, textiles, chemicals, and basic metals; food processing alone accounted for nearly one-third of total manufacturing output. For the period 1980-88, when total manufacturing production increased by only about 5 percent, food processing rose by nearly 23 percent. Production of basic metals went the other way, falling by almost 22 percent. Output of metal products and machinery, closely associated with capital goods and investment, fell by 7 percent from 1980 to 1988, and then fell by one-fourth between 1988 and December 1989.

The weak picture for manufacturing in the 1980s did not result from any intrinsic obstacle on the side of productive capacity but from the overall weakness of the economy and of domestic markets. The sector's ability to increase production under better economic conditions was demonstrated by what happened between 1985 and 1987, in the successful first half of the Garc�a administration when aggregate demand was stimulated but inflation had not yet gotten out of control; manufacturing output shot up 34 percent between these two years.

The modern manufacturing sector has relied on relatively capital-intensive and import-intensive methods of production, failing to provide much help for employment. Manufacturing value increased from 20 to 22 percent of GDP between 1950 and 1990, but its share of total employment fell from 13 to 10 percent. Its dependence on imports of current inputs and capital equipment has probably resulted in large measure from the combination of an overvalued currency with high protection against competing imports. Overvaluation holds down the prices of imported equipment and supplies, making them artificially cheap relative to labor and other domestic inputs. Protection adds to the problem by allowing those firms that prefer the most modern possible equipment, even when it is more expensive than domestic alternatives, to pass on any extra costs to captive domestic consumers. In addition, protection saddled industrial firms themselves with high-cost inputs from other domestic firms, raising their costs to levels that have made it extremely difficult for even the most efficient to compete in export markets.

Growth of manufacturing, as of the whole economy, has been held back seriously by the failure so far to achieve any sustained growth of industrial exports. The sector acts as a drag on the possibilities of overall growth by using a great deal more of the country's scarce foreign exchange to import its supplies and equipment than it earns by its exports. This issue is key to future growth. Directing manufacturing production more toward exports would provide a new avenue for growth through sales to world markets and would also help relax the foreign-exchange constraints that so frequently hold back the whole economy.

Peru

Peru - Mining and Oil

The mining sector, including oil, accounted for only 9 percent of GDP in 1988 but nearly half of the country's export earnings. Its share of total exports increased from 45 percent in 1970 to 48 percent in 1988. Copper alone accounted for 24.4 percent of total export earnings in 1970 and 22.5 percent in 1988.

Mining developed as an export sector, first for precious metals and then chiefly for nonferrous metals needed by the industrialized countries rather than by non-industrialized Peru. Mining has always been an enclave, only weakly related to the domestic economy for its supplies or for its markets. But it has been a principal provider of the foreign exchange and tax revenue needed to keep the rest of the economy going. That key role made the dominance of foreign ownership, especially in copper and oil, a focus of bitter conflict for many years. The sector became the center of intense debate over dependency, exploitation, and national policy toward foreign investment.

Foreign investment was the main source of mining development up to the 1960s, starting from the turn of the century in copper and extending to a wide range of metals after the highly favorable Mining Code was enacted in 1950. The sector was divided between the largest mines, which produced roughly two-thirds of metal output and owned by foreign firms, and the small-to-medium size mines , which supplied the other one-third of output and were under Peruvian ownership. Following the Mining Code of 1950, foreign investment flowed into iron ore, lead, zinc, and other minerals, and metals exports grew from 21 percent of total exports in 1951 to over 40 percent a decade later.

When the military overthrew the government of Bela�nde in 1968, the immediate issue was a conflict with IPC, the foreign firm dominating the oil industry. The Velasco regime quickly nationalized IPC and then in the 1970s also nationalized the largest copper mining corporation, Cerro de Pasco. It established the Peruvian State Mining Enterprise (Empresa de Miner�a Peruana- -Mineroper�) as the main state firm for development of copper and the Peruvian State Mineral Marketing Company (Mineroper� Comercial--Minpeco) as the new state mining marketing agency.

Output of metal products was erratic in the early 1970s but then took a big jump with completion of a major new copper-mining project, Cuajone, in 1976. By 1980 value added in the sector, at constant prices, was 1.5 times as high as in 1970. But then in the 1980s, value added began to fall, along with practically everything else. By 1988 it was 14 percent below the 1980 level. The decrease could be explained to some degree by the general disorganization of the economy, but more specific problems were caused by increased guerrilla violence interrupting supplies and deliveries, and by prolonged strikes.

Extraction, refining, and domestic marketing of oil were under control of the Petroleum Enterprise of Peru (Petroleras de Per�--Petroper�) from 1968 to 1991. Foreign firms have been allowed to participate in exploration for new fields, although negotiations over their rights often has proved to be difficult. One foreign firm, Belco Petroleum Corporation, maintained offshore production until 1985, when its operations were nationalized after a dispute over taxes with the Garc�a government.

Output of oil products increased greatly in the course of the 1970s: its value at constant prices was 2.7 times as high in 1980 as in 1970. But then oil production joined the collective downtrend: it fell sharply between 1980 and 1985. Again, both the general disorganization of the economy and the increase in rural violence contributed to the decrease. Additionally controls on prices of oil products held them far below costs of production in the second half of the 1980s. That fact put Petroper� deeply into deficit and constrained its ability to finance both production and exploration. In 1990 petroleum contributed US$263 million to the value of the country's exports. The major changes introduced by the Fujimori government in 1990-91 included invitations for new investment by foreign oil companies, ending the monopoly position of Petroper�. Several foreign oil companies immediately entered negotiations to begin exploration activities, either independently or in collaboration with Petroper�.

Peru

Peru - Services

The formally legalized side of the service sector includes both government and private services. Government services, measured by payments for inputs in the absence of any recognized standard of output, have grown remarkably fast. As evaluated in current prices, government services increased from 4 percent of GDP in the decade of the 1950s to 9 percent in 1990.

Among the private service-sector activities, retail and wholesale trade has been the most important, accounting for 13.7 percent of GDP in 1988. Financial and business services were next most important at 8.5 percent of GDP, followed by transport and communications at 7.4 percent. Electricity and water constituted a small share of output in 1988, at 1.3 percent of GDP, but they increased at a very high rate from 1970 to 1988: their output in 1988 was 3.4 times as high as in 1970. Although these formal service-sector activities have, for the most part, shown significant growth even during the difficult 1980s, national accounts indicated that the largest of them--retail and wholesale trade--did not grow at all between 1980 and 1988. But that official measure was not readily credible, given the country's population growth and especially the rapid growth of the urban population. The official measure apparently reflected the fact that a growing share of trade was being carried out by unregistered individuals and firms.

Official statistics on production and employment are always subject to many reservations in Peru, as in all developing countries, but especially so for the service sector. Much of what is going on among these activities is outside the formal framework of the economy and very difficult to measure. In 1990- 91 many service activities were legally registered, reported sales and profits for tax purposes, and were in all respects within the formal accounting system of the economy. But many others were unregistered and might not even be known to exist as far as the government's statistics were concerned. That is true in any country for some activities, particularly those that operate against the law. It is also true on a massive scale in Peru for people who are just repairing shoes, making small items in their homes to sell in the streets, or in general trying to survive by activities that are perfectly normal and productive but not registered with the government. Peru has a massive informal sector, which includes more than half the total urban labor force. This sector accounts for a high proportion of personal services and retail sales activities, as well as considerable industrial production.

Exactly when and why these informal sector activities moved from a marginal to a large share of the economy are open questions. One strongly argued view, associated particularly with the work of Hernando de Soto, author of El otro sendero (The Other Path), is that regulatory activities of government proliferated from the 1960s onward, imposing intolerable costs on private business activities. A slightly different but consistent view is that the rapid growth of the informal sector coincided with increased business taxation, beginning at the end of the 1960s. The two interpretations fit each other, but the former lends itself more to a general argument against government regulation of business, without paying much attention to the fact that the growth of the informal sector means a shrinking tax base for the society.

Both of these analyses surely capture much of the causation behind the growth of the informal sector in Peru, but they may deflect attention from two other explanations that could be more important. One of them concerns the generalized deterioration of the economy and the consequent weak growth of job opportunities in formal-sector employment. With the rapid growth of the labor force, and a high rate of migration to the cities, the number of people looking for work far outpaced the number of formal job openings. The answer for those without regular employment in the formal sector has been to create self-employment activities of their own or to work for relatives in small-scale operations, often on a basis of family sharing rather than regular wage employment. These people do everything from selling coat hangers on sidewalks in the center of the city to putting together computers from discarded spare parts. In this view, the problem is not so much government regulation or excess taxation as it is one of macroeconomic failure of the economy as a whole. The informal sector may be in part a way to avoid regulation, but more fundamentally it is a necessary means of survival, a constructive answer on the individual level to lack of success at the level of the macroeconomy.

Still another interpretation that must be considered centers on the background of the migrants to the cities. They have been native Americans and mestizos from rural communities in which ways of earning a living are bound within traditional family and community relationships. Production is carried out on a self-employed or very small-scale basis with a minimum of the kinds of accounting, financial, and legal complications of modern society. The new migrants to the cities look for work and guidance from former migrants and especially relatives from the same communities who are carrying on much the same kinds of activities as they knew at home. They recreate in Lima the kinds of informal activities they have always known. In this view, the informal sector is largely a cultural phenomenon, by no means explicable in purely economic terms.

Succeeding governments have gone back and forth in their treatment of the informal sector, at times trying to crack down on unregistered vendors and their sources of supply, and at other times trying to provide them with information and technical help. The formal business sector might be expected to press for regulation of these activities because the legally registered firms must pay the higher costs of following regulations and paying taxes: competition is not even. But then the formal sector is itself divided. Because some of these firms cut their own costs by subcontracting activities to the informal sector, to some degree they share in the same profit from being outside the law. Everyone recognizes that the informal sector is the source of livelihood for a great many people without alternative opportunities and that helping to make them more productive could yield important gains for them and for Peru. The other side of the coin is that those in this sector pay no attention to the legal system, to health and safety regulations, or to the society's need for a tax base to support necessary public functions.

Peru

Peru - Banking

In 1987 the Garc�a government attempted to nationalize Peru's banks, financial institutions, and insurance companies. Under the legislation, which Congress approved despite a judicial ruling against the government's proposals, the government was to hold 70 percent of shares of nationalized banks, with the remaining 30 percent offered for sale to the public. The legislation excluded foreign banks operating in Peru from the nationalization program but prohibited them from opening any new branches in Peru. This set of proposals stimulated widespread public opposition and provoked a breakdown of cooperation between business leaders and the government. Private investment fell abruptly. Garc�a attempted to pursue the nationalization despite all the opposition, but adverse judicial rulings slowed implementation and finally killed the proposals.

In early 1991, Peru's financial system included four development banks, twenty-two commercial banks, eight credit firms (financieras de cr�dito), fifteen savings-and-loan mutuals (mutuales), twelve municipal savings-and-loans institutions, and the Savings Bank of Lima (Caja de Ahorros de Lima). In May 1991, the Fujimori government introduced a new package of economic measures designed to liberalize the banking system. The government suspended the powers of the Central Reserve Bank (Banco Central de Reservas, or BCR--hereafter Central Bank) to set interest rates and allowed them to float according to market forces. It also stipulated that in the future foreign banks would be able to operate in Peru under the same conditions as Peruvian banks. In addition, it amended the Agrarian Reform Law of 1969 by allowing farmers to put up their land as collateral for bank loans. When it went into effect in June 1991, the new banking law shook up the state banking sector, which employed 20,000 people and included six state-owned banks. The new law eliminated specialized banks, credit firms, and mortgage-lending mutuals, forcing them to reorganize as commercial banks.

Peru

Peru - Tourism

Lima, with its Spanish colonial architecture, and Cusco, with its impressive stonework of pre-Inca and Inca civilizations, notably at Machupicchu, are the centers of Peru's ailing tourism industry. Lake Titicaca also constitutes a major tourist attraction. However, as a result of terrorism, insurgency, common crime, the 1990-91 cholera epidemic, and the April 1992 coup, tourism has declined drastically since 1988, when Peru received an estimated 320,000 foreign visitors and US$300 million in tourism earnings. One American tourist was murdered in Cusco in early 1990, and several others died in the late 1980s because of sabotage of a train line between Cusco and Machupicchu. Under sharply increased taxes on tourism imposed in 1989 in response to declining numbers of tourists, foreigners have had to pay far more than Peruvians for internal flights and visits to museums and archaeological sites. In 1989 six flights a day shuttled tourists between Cusco and Lima, but by late 1990 there were only two. Tourist arrivals in Peru continued to decline in 1990 and 1991.

According to the National Tourism Board (C�mara Nacional de Turismo--Canatur), tourism in the first half of 1992 was down 30 percent from the first semester of 1991, which, in turn, fell 70 percent from 1988, tourism's record year. A major blow to Lima's hotel business was the SL's car bomb attack in the exclusive Miraflores district on July 16, 1992, in which six major hotels suffered over US$1 million in damages. The number of tourists visiting Cusco and Machupicchu had dropped 76 percent since 1988.

<"http://accommodations-travelnow.com/latin-america/peru/">Peru Accommodations

Peru

Peru - Employment

The Peruvian labor force increased from 3.1 million workers in 1960 to 5.6 million by 1980, and to 7.6 million by 1990. As it did so, the share of the labor force in agriculture steadily decreased, but the shares in manufacturing and mining failed to rise. On balance, the decreases in the agricultural share had to be offset by increases in the share in service activities, some of them offering productive employment at abovepoverty income levels but many of them not.

Peru's long process of transition away from a rural society was far from complete at the beginning of the post-World War II period. Fifty-nine percent of the labor force was still working in agriculture in 1950. That share fell to barely over half by 1960 and to 34 percent by 1990. The more surprising trend is that the share of the labor force in manufacturing also fell, from 13 percent in 1950 to 10 percent by 1990. Stable shares in both construction and mining meant that the shift out of agriculture went mainly toward services, pulling their share of employment up from 23 percent in 1950 to 50 percent by 1990.

The persistent decrease in the share of the labor force in agriculture could in theory have helped to alleviate rural poverty by leaving higher average land holdings to those remaining in agriculture. But the absolute number of people trying to make a living from inadequate land holdings actually increased. The labor force in agriculture rose 52 percent between 1960 and 1990. In addition, emigration from agriculture exerted increasing pressure on labor markets in the cities, and the increase in rural workers kept earnings low in that sector.

A growing labor force need not drive wages down and in most instances does not, provided that investment and technical change keep opening up new opportunities for productive employment fast enough to absorb the larger number of workers. Peru managed to accomplish such growth in the first post-World War II decades, but from the early 1970s the trend went downward. As more and more workers tried to survive in the service sector by selfemployment or work with families instead of formally registered firms, they created a rapidly growing informal sector. Workers in the informal sector are mostly employed, and they certainly add to national income, but their earnings are often below the poverty line.

Overt unemployment that can actually be counted has been only a small part of the problem. The overt unemployment level in Lima was an estimated 7 percent in 1980, rising to 8 percent by 1990. But estimates of underemployment in part-time or very low-income activities indicate that 26 percent of Lima's labor force was in this category in 1980, and fully 86 percent in 1990. Such measures are invariably somewhat arbitrary, depending on how underemployment is defined and measured. However, the fact that the share of Lima's labor force fitting the definition more than tripled between 1980 and 1990 is readily understandable in the light of the deterioration of the economy in the 1980s.

Peru

Peru - Wages

Real wages in Peru rose when the economy was advancing in the 1950s and 1960s but then began to go down persistently. From 1956 to 1972, average wages in manufacturing increased at an annual rate of 4.1 percent. But then from 1972 to 1980, they went back down at the rate of 3.6 percent a year, and from 1980 to 1989 they went further down at the rate of 5.2 percent a year. Although comparisons of real wage levels over long periods are inherently uncertain, given many changes in the structures of wages and prices, it seems evident that real wages in Peruvian manufacturing were much lower in 1989 than they had been a third of a century earlier.

Even in comparison with the sharp fall in manufacturing real wages during the 1980s, the concurrent plunge in real minimum wages for urban workers was appalling. While the average for manufacturing fell 58 percent from 1980 to 1989, the real minimum wage fell 77 percent; the purchasing power of the minimum wage in 1989 was less than one-fourth its level in 1980.

The minimum wage applies to legally employed workers in the formal sector. The much larger number of workers in the informal sector, not covered by the minimum wage, also lost purchasing power in the course of the 1980s but apparently not as drastically. An index of real earnings in the informal sector shows a decrease of 28 percent between December 1980 and December 1989. That index also shows extreme volatility. Real earnings rose steeply between December 1980 and December 1987, almost doubling in this period, and then plunged to a level far below the starting point.

Peru

Peru - Organized Labor

In labor markets as weak as those of Peru from the early 1970s onward, organized labor has not normally had any great bargaining power. It could affect the political balance, but it has not been able to do much to keep real earnings from falling when the economy declined. Peruvian labor has never been more than moderately organized in any case: unionization did not take off significantly until the political climate changed with the reformist military government of 1968. Labor has played a more active political role since that time, but has not so far been able to prevent deterioration of real wages.

Organized labor in Peru got off to a slow start in the interwar period (1919-40), compared with active unionism in Argentina, Chile, and Venezuela. Still, the textile workers, in the one sizeable industry of the time, managed to defy the government and win a famous strike in 1919. They gave the credit to a student activist who stepped in to lead them and negotiated an impressive victory. The activist, V�ctor Ra�l Haya de la Torre, went on at the beginning of the 1930s to found the American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana- -APRA), the country's first mass-based political party. Haya de la Torre simultaneously promoted organization of labor through the Confederation of Peruvian Workers (Confederaci�n de Trabajadores del Per�--CTP) and consolidated a close partnership between APRA and the CTP. The CTP was the dominant voice of labor until Haya de la Torre allied himself with the conservative side of the political spectrum during the 1960s. That move to the right then stimulated the growth of a rival Communist-led labor federation, the General Confederation of Peruvian Workers (Confederaci�n General de Trabajadores del Per�--CGTP).

Neither APRA nor the labor movement made much headway under the conservative governments in office up to the 1960s. But after the reformist military government took power in 1968, unionization spread rapidly. More new unions were given legal recognition from 1968 to 1978 than in all prior Peruvian history: there were 2,152 recognized unions in 1968 and 4,500 by 1978. The new unions, less tied to APRA, began to strike out more on their own to undertake joint negotiations and demonstrations with community groups of all kinds. The military government began to regard unions less as allies and more as sources of opposition, and in fact labor became a center of resistance to military authority all through the 1970s.

Although the Velasco government was committed in many respects to support of popular organizations, its relationships with organized labor turned into conflicts in two fundamental ways. One was purely economic; the government was initially determined to prove its ability to avoid inflation, which it identified as evidence of the inherent weakness of civilian governments. Increase in wages was seen as a threat to control of inflation, and wages in general were considered a matter to be decided by government rather than unions.

The second and more general source of conflict was that the Velasco government had a strongly corporatist conception of social order, in which labor unions had their place but had no business trying to change it. The government was deeply opposed to theories of class conflict. Labor and capital alike were expected to recognize that their interests had to be reconciled for the good of the society as a whole. The military welcomed and sponsored public organizations but distrusted any signs of excessive autonomy.

Once in open conflict with the two main labor confederations, the government tried to undercut them by creating a new one, the Federation of Workers of the Peruvian Revolution (Central de Trabajadores de la Revoluci�n Peruana--CTRP). The new confederation received government help in getting favorable wage settlements and added to the scope of labor organization but had little effect in actually weakening the more independent unions.

In the economic contraction following 1975, labor played a more active role of social protest than ever before. The first general strike in the country's history, in July 1977, seemed to herald a new epoch in labor relations in Peru. Labor's support for left-oriented parties, no longer so predominantly for APRA, became evident in the elections of 1980. In terms of wage trends, the more active role of organized labor has not seemed to make much difference. Organized labor certainly did not stop the devastating fall of real wages in the 1980s. Still, average wages for workers under collective bargaining contracts have been much higher than those for workers without them. As of December 1986, the average wage for those with contracts was 2.2 times that of workers without them. That ratio fell to 1.7 by December 1989, as everyone's real wages plunged.

Peru

Peru - Poverty

Whether poverty is measured in terms of family income or in terms of social indicators, such as child mortality, it has been greater in Peru than would be expected on the basis of the country's average income per capita. Historically, this situation has been an expression of the country's exceptionally high degree of inequality. More recently, especially in the course of the 1980s, it increased even more than in the other major Latin American countries, chiefly because of the drastic deterioration of the economy's overall performance.

Measures of poverty based on family income are, of course, dependent on the particular income level chosen as a dividing line between the poor and the non-poor. Both the Economic Commission for Latin America and the Caribbean (ECLAC) and the World Bank draw two lines--one for a tightly restricted income level to define extreme poverty, or destitution, and a second cutoff for poverty in a less extreme sense. Destitution refers to income so low that it could not provide adequate nutrition even if it were spent entirely on food. Poverty in the less extreme sense takes as given the proportion of income spent on food in each society and compares that proportion to the level needed for adequate nutrition.

A comprehensive analysis of poverty in Latin America for 1970 concluded that fully 50 percent of Peruvian families were below the poverty line and 25 percent were below the destitution level. These proportions were both higher than Latin America's corresponding averages--40 percent in poverty and 19 percent in destitution. In Peru, as in the rest of Latin America, the incidence of poverty and destitution was much higher for rural than for urban families. Fully 68 percent of rural families were below the poverty line, compared with 28 percent of urban families.

A more recent ECLAC study provides new estimates of the incidence of poverty for 1980 and 1986. For Latin America, the share of families in poverty fell from 40 percent in 1970 to 35 percent in 1980 but then rose to 37 percent in the more difficult conditions of 1986. For Peru, the incidence of poverty also fell from 50 percent in 1970 to 46 percent in 1980, but then it increased to 52 percent by 1986, rising faster than the rest of the region.

As in 1970, the incidence of poverty and destitution in 1986 remained higher for rural than for urban families, but the differences had lessened. In 1970 the incidence of poverty for rural families was 2.4 times that for urban families; in 1986 the ratio was only 1.4 times. The proportion of rural families in poverty actually fell, from 68 percent to 64 percent, while that of urban families rose greatly, from 28 percent to 45 percent.

Cu�nto S.A. has developed an ongoing monthly indicator of extreme poverty in Peru, combining measures of earnings by workers paid the minimum wage with earnings in the informal urban sector and in agriculture. Taking January 1985 as the starting point, this index shows a substantial fall in extreme poverty up to December 1987, in the first years of the Garc�a government's expansion. But then it shows a dramatic increase as the economy went rapidly downhill. At the end of the Garc�a administration, in June 1990, the index was 91 percent higher than in December 1987 and 32 percent higher than its starting point in January 1985.

Peru

Peru - Income Distribution

The distribution of income in Peru has been exceptionally unequal for a long time, but by some measures the degree of inequality apparently decreased between 1970 and 1985. The main causes of inequality have changed as well, in some ways for the better and in some for the worse.

In the pre-World War II years, the dominant causes of inequality were a very high concentration of ownership of land and access to capital and to education, along with a sociopolitical structure that condemned the indigenous rural population to bare subsistence with little chance of mobility. In the post-World War II period, especially since the 1960s, access to education gradually has spread to rural areas, and increased migration to the cities has opened up new opportunities for people previously blocked in poverty-stricken rural occupations. The Agrarian Reform Law of 1969 wiped out large private land holdings and led in the 1980s to a vastly less unequal distribution of individual ownership. The rise of production and export of coca probably also played a role in raising rural incomes in the 1980s.

More positively, if only for a brief period from 1985 to 1987, the agrarian policies of the Garc�a government helped stimulate agricultural markets and production, and controls on prices in the industrial sector served to raise greatly the ratio of agricultural to industrial prices. As has been noted, the proportion of the rural population below the poverty line fell from 68 percent in 1970 to 64 percent by 1986, while that for urban families was rising from 28 percent to 45 percent. The positive change for rural families was small, and the negative change for urban families was large, but because urban poverty was initially less the degree of inequality between the rural and urban sectors decreased.

Other changes in the post-World War II years worked in the opposite direction, toward greater inequality. The turn to industrial protection raised profits of industrialists relative to other forms of income and also raised the prices of their products relative to those of the agricultural sector. Wages for organized workers in manufacturing rose relative to wages of lower-income rural and unorganized labor, as well. The pressure of a rapidly growing labor force against the society's limited openings for productive employment acted in general to keep downward pressure on labor income relative to property income. That imbalance worsened in the 1980s when the chaotic conditions of the economy as a whole made employment conditions more difficult.

During the period of exceptional economic growth from 1961 to 1972, the incomes of the poorest 60 percent of Peruvian families increased at a rate of 2.3 percent a year, just matching the rate of growth of national income. As growth weakened from the mid1970s , both average real wages and minimum real wages began a prolonged decline, and total wages fell relative to incomes of property owners. But earnings of the lowest income groups in agriculture went up, slightly reducing the percentage of rural families falling below the poverty line. A World Bank study concludes that these changes reduced the degree of inequality between 1972 and 1985: the share of the poorest 60 percent increased from 18 to 27 percent of total income.

An alternative measure of inequality, the Gini index, shows a similar improvement. The higher the coefficient, the higher the degree of inequality. In the early 1960s and again in the early 1970s, Peru had either the highest or the second highest Gini coefficient for all the Latin American countries measured, at 0.61 for 1961 and 0.59 for 1972. By 1985 it had come down to 0.47, far below Brazil and only slightly higher than Colombia. These countries all have high inequality by world standards, but in 1985 Peru no longer stood out as the worst.

The latest estimate available, for 1988, suggests that inequality had increased slightly compared with 1985, with the Gini coefficient rising from 0.47 to 0.50. Although not a drastic change in itself, its connotations are worsened by the simultaneous rise in poverty. The latter may well be considered to be the more important matter: it would not mean much to reduce inequality if that just meant more equal sharing of greater poverty. The one clearly positive combination of indicators is that for the period 1980-85 the incidence of poverty fell, if only slightly, for the rural households who have always constituted the majority of Peru's poor.

Peru

Peru - The Velasco Government

The economic strategy of the Velasco government was shaped by a conception frequently advocated in Latin America but rarely put into practice. The idea was to find a "third way" between capitalism and socialism, with a corporatist society much more inclusionary than that possible under capitalism but without rejecting private ownership or adopting any of the compulsory methods identified with communism. Under this strategy, land reform was designed to override existing property interests in order to establish cooperative ownership, rejecting both individual private farming and state farms. Promoting worker participation in ownership and management was intended to reshape labor relations. Foreign influences were reduced through tight restrictions on foreign investment and nationalization of some of the largest foreign firms. On a more fundamental plane, the Velasco government saw its mission as one of eliminating class conflict and reconciling differences among interest groups within its own vision of a cooperative society.

Land Reform

The most striking and thorough reform imposed by the Velasco government was to eliminate all large private landholdings, converting most of them into cooperatives owned by prior workers on the estates. The reform was intended to destroy the basis of power of Peru's traditional elite and to foster a more cooperative society as an alternative to capitalism. Such socialpolitical purposes apparently dominated questions of agricultural production or any planned changes in patterns of land use. It was as if the questions of ownership were what mattered, not the consequences for output or rural incomes. In fact, the government soon created a system of price controls and monopoly food buying by state firms designed to hold down prices to urban consumers, no matter what the cost to rural producers.

As mentioned earlier, the cooperatives had very mixed success; and the majority were converted into individual private holdings during the 1980s. The conversions were authorized in 1980 by changes in the basic land reform legislation and were put into effect after majority votes of the cooperative members in each case. The preferences of the people involved at that point clearly went contrary to the intent of the original reform. But the whole set of changes was not a reversion to the pre-reform agrarian structure. In fact, the conversions left Peru with a far less unequal pattern of landownership than it had prior to the reform and with a much greater role for family farming than ever before in its history.

Labor and Capital in the Industrial Sector

In line with its basic conception of social order, the military government also created a complex system of "industrial communities." Under this system, firms in the modern sector were required to distribute part of their profits to workers in the form of dividends constituting ownership shares. The intent was to convert workers into property owners and property ownership into a form of sharing for the sake of class reconciliation. But in practice, the system never functioned well. The firms did all they could to avoid reporting profits in order to postpone sharing ownership, sometimes by setting up companies outside the system to which they channeled profits, sometimes by adjusting the books, and in general by keeping one step ahead of intended regulations. A small fraction of the industrial workers gained shares in firms, but as a rule workers were not so much interested in long-term claims of ownership as they were in immediate working conditions and earnings. For organized labor, the whole approach seemed an attempt to subvert any role for union action and to make organization irrelevant. The system was not popular with either side. It was quickly abandoned when the more conservative wing of the military took power away from General Velasco in 1975.

Attempted reform of labor relations in the mid-1970s also included severe restrictions on rights to discharge workers once they passed a brief trial period of employment. A review process set up to examine disputes was implemented in a way that made discharges practically impossible. Businesspeople circumvented the restrictions to some degree by hiring workers on a temporary basis up to the point at which they would have to be kept and then letting them go before the restrictions applied. Businesspeople remained unremittingly hostile to this type of regulation, primarily on the grounds that it took away their main means of exercising discipline over their workers. This form of regulation was also eliminated shortly after Velasco lost power.

Protection and Promotion of Industry

Along with the intention of resolving internal class conflict, the Velasco government determined to lessen Peru's dependency on the outside world. The two most important components of the strategy were a drive to promote rapid industrialization and an attack on the role of foreign firms. In contrast to the industrialization strategies of most other Latin American countries, the intention of the Velasco regime was to industrialize without welcoming foreign investment.

The preceding Bela�nde administration had started Peru on the path of protection to promote industry, and in this respect the Velasco government reinforced rather than reversed the existing strategy. Beyond the usual recourse to high tariffs, Velasco's government adopted the Industrial Community Law of 1970 that gave any industrialist on the register of manufacturers the right to demand prohibition of any imports competing with his products. No questions of exceptionally high costs of production, poor product quality, or monopolistic positions fostered by excluding import competition were allowed to get in the way. Before the succeeding government of General Francisco Morales Berm�dez Cerrutti (1975- 80) began to clean up the battery of protective exclusions in 1978, the average tariff rate reached 66 percent, accompanied by quantitative restrictions on 2,890 specific tariff positions.

In addition to the protective measures, the Velasco government promoted industrial investment by granting major tax exemptions, as well as tariff exemptions on imports used by manufacturers in production. The fiscal benefits given industrialists through these measures equaled 92 percent of total internal financing of industrial investment in the years 1971 through 1975.

Investment rose strongly in response to these measures, as well as to the concurrent rise in aggregate demand. But the tax exemptions also contributed to a rising public-sector deficit and thereby to the beginning of serious inflationary pressure. In addition, the exemptions from tariffs given to industrialists on their own imports of equipment and supplies led to a strong rise in the ratio of imports to production for the industrial sector.

Nationalizations and State Firms

The industrialization drive was meant to be primarily a Peruvian process not totally excluding foreign investors but definitely not welcoming them warmly. In that spirit, the Velasco regime immediately nationalized IPC in October 1968 and, not long after that, the largest copper mining company, while taking over other foreign firms more peacefully through buy-outs. The government put into place new restrictions on foreign investment in Peru and led the way to a regional agreement, the Andean Pact, that featured some of the most extensive controls on foreign investment yet attempted in the developing world.

The decision to nationalize the foreign oil firm was immensely popular in Peru. It was seen as a legitimate response to many years of close collaboration between the company, which performed political favors, and a series of possibly selfinterested Peruvian presidents, who, in exchange, preserved the company's exclusive drilling rights. Nationalization was perhaps less a matter of an economic program than a reaction to a public grievance, a reaction bound to increase public support for the new government.

Subsequent nationalizations and purchases of foreign firms were more explicitly manifestations of the goals of building up state ownership and reducing foreign influence in Peru. The leaders of the military government subscribed firmly to the ideas of dependency analysis, placing much of the blame for problems of development on external influences through trade and foreign investment. Foreign ownership of natural resources in particular was seen as a way of taking away the country's basic wealth on terms that allowed most of the gains to go abroad. Ownership of the resources was expected to bring in revenue to the government, and to the country, that would otherwise have been lost.

In contrast to its abrupt nationalization of the IPC and then of the largest copper mining company, the government turned mainly to purchases through negotiation to acquire the property of the International Telephone and Telegraph Company (ITT) and foreign banks. Partly in response to United States reactions to the earlier nationalizations, and perhaps also partly in response to the realization that foreign investment might play a positive role in the industrialization drive, the government began to take a milder position toward foreign firms. But at the same time, it pursued a policy of creating new state-owned firms, in a sense competing for position against domestic private ownership, as well as against foreign ownership.

State ownership of firms was, of course, consistent with the nationalizations but reflected a different kind of policy objective. Whereas the nationalizations were intended to gain greater Peruvian control over the country's resources and to reduce the scope of foreign influence, the proliferation of state-owned firms was meant to increase direct control by the government over the economy. State firms were seen as a means to implement government economic policies more directly than possible when working through private firms, whether domestic or foreign-owned. The goal was not to eliminate the private sector-- it was encouraged at the same time by tax favors and protection-- but to create a strong public sector to lead the way toward the kind of economy favored by the state.

The new state firms created in this period established a significant share of public ownership in the modern sector of the economy. By 1975 they accounted for over half of mining output and a fifth of industrial output. One set of estimates indicates that enterprises under state ownership came to account for a higher share of value added than domestic private capital: 26 percent of GDP for the state firms, compared with 22 percent for domestic private firms. The share produced by foreign-owned firms dropped to 8 percent from 21 percent prior to the Velasco government's reforms.

Contrary to the expectation that the earnings of the state firms would provide an important source of public financing for development, these companies became almost immediately a collective drain. In some measure, the drain was a result of decisions by the government to hold down their prices in order to lessen inflation or to subsidize consumers. In addition, deficits of the state-owned firms were aggravated by the spending tendencies of the military officers placed in charge of company management and by inadequate attention to costs of production. The collective deficits of the state enterprises plus the subsidies paid directly to them by the government reached 3 percent of GDP by 1975. State enterprises were not able to finance more than about one-fourth of their investment spending. The government attempted to answer the investment requirements of the state firms by allowing them to borrow abroad for imported equipment and supplies. They did so on a large scale. The external debt rose swiftly, for this and for other reasons discussed below.

Nationalizations and the creation of new state firms stopped abruptly after Velasco lost power. In 1980 the Bela�nde government announced a program to privatize most of the state firms, but it proved difficult to find private buyers, and few of the firms were actually sold. In the opposite direction, the subsequent Garc�a government, in addition to nationalizing in 1985 the offshore oil production of the Belco Corporation, a United States company, tried in 1987 to extend state ownership over banks remaining in private hands. The attempted banking nationalization created a storm of protest and was eventually ruled to be illegal. The failures under both Bela�nde and Garc�a to change the balance left the state-enterprise sector basically intact until Fujimori implemented major changes.

Macroeconomic Imbalance: Domestic and External

Whatever the promises and the costs of the many kinds of reform attempted by the Velasco government, the ship sank because of inadequate attention to balances between spending and productive capacity, and between export incentives and import demand. The Velasco government inherited recessionary conditions in 1968, with a positive external balance and productive capacity readily available for expansion. It maintained effective restraint on spending and deficits for several years but then let things get out of control. The central government's deficit was no more than 1 percent of gross national product (GNP) in 1970, but its own deficit plus that of the greatly expanded group of state firms reached 10 percent of GNP by 1975. Correspondingly, the external current-account balance was positive in the period 1968-70 but showed a deficit equal to 10 percent of GNP by 1975.

The external deficit was driven up primarily by high rates of growth of domestic demand and production through 1974. But in addition, the government's policy of holding to a fixed nominal exchange rate, in an increasingly inflationary context, allowed the real exchange rate to fall steadily from 1969 to 1975. The government refused to consider devaluation for fear it would worsen inflation and managed to avoid it by borrowing abroad to finance the continuing deficit. By 1975 external creditors had lost confidence in Peru's ability to repay its debts and began to put on the brakes. Whether because of such external pressure or because of growing internal opposition to the increasingly arbitrary decisions of the government, the Peruvian military decided to replace Velasco in 1975. The experiment ended on a note of defeat, not so much of its objectives as of its methods.

Peru

Peru - The Second Bela�nde Government

The return to democracy allowed Peruvians to choose among strongly left, strongly conservative, or middle-of-the-road parties. They chose Bela�nde and his party as the middle road, but it led nowhere. The Bela�nde government tried to return the economy to a more open system by reducing barriers to imports, implementing financial reforms intended to foster private markets, and reversing the statist orientation of the Velasco system. But the new approach never had a chance to get very far because of a series of macroeconomic problems. On one side, the government was rightly concerned about continuing inflation but made the mistake of focusing the explanation on monetary growth arising from the export surplus it inherited at the start. That position made it seem undesirable to continue trying to promote exports and desirable to raise domestic spending and imports. On the other side, President Bela�nde's personal and political objectives included using public investment actively to develop the interior of the country and to answer evident needs for improved infrastructure. Seeing the export surplus as the key macroeconomic source of imbalance, the government decided to eliminate it by removing import restrictions, slowing nominal devaluation to allow the real exchange rate to appreciate, and increasing government investment spending.

The real exchange rate appreciated through 1981 and 1982, public sector investment rose 54 percent in real terms from 1979 to 1982, and public sector consumption rose 25 percent during the same three-year period. The combination effectively turned the current-account surplus into a large deficit, as increased spending plus import liberalization practically doubled imports of goods and services between 1979 and 1981. The appreciation also turned manufacturing exports back downward, and a plunge in external prices of primary exports brought them down too. And then the mistake of focusing on the earlier export surplus as the main cause of inflation became clear: the increases in spending led to a leap of inflation despite the return to an external deficit. The rate of inflation went from 59 percent in 1980 to 111 percent by 1983.

Nothing improved when the government then tried to go into reverse with contractionary macroeconomic policies and renewed depreciation. Output plunged, but inflation once more went up instead of down, to 163 percent by 1985. By this time, pessimism about the government's capacity to solve anything, inflationary expectations turning into understandable convictions, and the price-increasing effect of devaluation all combined to give Peru a seemingly unstoppable inflation despite the elimination of anything that might be considered excess demand. The government apparently lost its sense of direction, retreated from its attempt to reopen the economy by returning to higher tariff levels, and otherwise did little except wait for its own end in 1985.

Peru

Peru - The Garc�a Government

With the market-oriented choice of economic strategy discredited by results under Bela�nde, Peruvians voted for the dynamic populist-reformist promise of Garc�a and responded enthusiastically to his sweeping changes. Garc�a's program worked wonders for two years, but then everything began to go wrong.

The main elements of the economic strategy proposed by the Garc�a government were full of promise. They recognized the prior neglect of the agricultural sector and called for redirecting public programs toward promotion of agricultural growth and reduction of rural poverty. Correspondingly, economic activity was to be decentralized to break down its high concentration in Lima, and within the cities resources were to be redirected away from the capital-intensive and import-intensive modern sector to the labor-intensive informal sector. A strategy of concertaci�n (national understanding) with private business leaders on economic issues was to be used systematically to avoid disruptive conflict. Problems of external balance were to be answered both by restructuring production to lessen dependence on imports and by reorienting toward higher exports over the long-term.

These goals for structural change could have improved the efficiency of resource allocation while doing a great deal to lessen poverty. But the goals clearly required both time and the ability to restore expansion without worsening inflation and external deficits. The government initially emphasized such macroeconomic objectives as necessary conditions for the structural changes. The first step was to stop the built-in inflationary process, but to do it without adopting orthodox measures of monetary and fiscal restraint.

To stop inflation, the government opted for heterodox policies of control within an expansionary program. Prices and wages in the modern sector were to be fixed, after an initial one-shot increase in wage rates. The increase in wages was intended to raise living standards of workers and stimulate production by raising sales to consumers. To offset the effects of higher wages on costs of production, financial costs of the business sector were cut by intervention in order to reduce and control interest rates. After making one adjustment of the exchange rate to minimize negative effects on exports, the government stopped the process of continuing devaluation in order to help hold down inflation. Imports were rightly expected to go up as the economy revived; to help finance them, Garc�a made his controversial decision to stop paying external debt service beyond 10 percent of the value of exports. Unorthodox as they were, all the pieces seemed to fit. At least, they went together well at the start under conditions of widespread idle capacity, with an initially strong balance of payments position.

The macroeconomic measures worked wonders for production. GDP shot up 9.5 percent in 1986 and a further 7.7 percent in 1987. Manufacturing output and construction both increased by more than one-fourth in these two years. An even greater surprise was that agricultural production per capita went up, running counter to its long downward trend. And the rate of inflation came down from 163 percent in 1985 to 78 percent in 1986, although it edged back up to 86 percent in 1987. In response to stronger market conditions and perhaps also to growing confidence that Peru's economic problems were at last being attacked successfully, private fixed investment went up by 24 percent in 1986, and capital flight went down.

The government avoided any spending spree of its own: central government spending was actually reduced in real terms each year. But because the government also reduced indirect taxes in order to encourage higher private consumption and to reduce costs for private business, its originally small deficit grew each year. The economic deficit of the nonfinancial public sector as a whole (excluding interest payments) went up from 2.4 percent of GDP in 1985 to 6.5 percent by 1987.

Although the government reduced its total spending, it managed to support a new public works program to provide temporary employment and to direct more resources to rural producers as intended in its program for structural change. Three lines of policy helped especially to raise rural incomes. The first was to use generous guaranteed prices for key food products. The second was to provide greatly increased agricultural credit, financed essentially by credit from the Central Bank. The third was to exempt most of the non-guaranteed agricultural prices from controls, allowing their prices to rise sharply relative to those of industrial products from the modern sector. From July 1985 to December 1986, prices of goods and services not under control increased more than three times as much as those under control. Wholesale prices in manufacturing increased 26 percent, but those for agricultural products increased 142 percent.

Besides higher employment and living standards, the first two years of economic revival seemed to offer a break in the cycle of rising rural violence. The flow of displaced peasants from the Sierra eased, and a good many peasants began to return to the countryside. That reverse might be explained by Garc�a's initial efforts to reduce reliance on military force to combat the guerrillas and thereby to lessen the degree of two-way violence driving people out of their villages. But the trend may also have been a response to the reality of better economic conditions and earning possibilities in the agricultural sector.

The first two years of the Garc�a government gave new hope to the people of Peru, with rising employment, production, and wages suggesting a clear turn for the better after so many years of increasing difficulties. It was hence doubly tragic to see the whole process unravel so quickly, once things started going wrong again. The first sign of trouble came, as it often had, from the balance of payments. The economic boom naturally raised imports swiftly, by 76 percent between 1985 and 1987. But the real exchange rate was allowed to fall by 10 percent in 1986 and by a further 9 percent in 1987. The boom pulled potential export supply into the domestic market, and the fall in the real exchange rate reduced incentives to earn foreign exchange. Exports fell slightly in 1985 and remained below that level through 1987. The external current account went from a surplus of US$127 million in 1985 to deficits of nearly US$1.1 billion in 1986 and nearly US$1.5 billion in 1987.

The Garc�a government reacted to the growing external deficit in exactly the same way as had the governments of Velasco and of Bela�nde--by postponing corrective action while the problem continued to worsen. As ever, a major fear was that devaluation would worsen inflation. Inflationary pressures were, in fact, beginning to worsen behind the fa�ade of control. To some degree, they were growing in response to the high rate of growth of demand and output, reducing margins of previously underutilized productive capacity. But the more explosive pressures were being built up by relying on price controls that required a dramatic expansion of credit to keep the system in place. Prices of public sector services--gasoline above all, oil products in general, electricity, telephones, and postal services--were frozen at levels that soon became almost ridiculous in real terms. The restrictions on prices charged by state firms drove them ever deeper into deficits that had to be financed by borrowing. The borrowing came from wherever it could, but principally from the Central Bank. At the same time, Central Bank credit rose steadily to keep financing agricultural expansion. Still another direction of Central Bank credit creation was the financing used to handle the government's new structure of multiple exchange rates. Differential rates were used to hold down the cost of foreign exchange for most imports, again with the dominant goal of holding down inflation, while higher prices of foreign exchange were paid to exporters to protect their incentives to export. The Central Bank thus paid more for the foreign exchange it bought than it received for the exchange it sold.

The term used for these leakages--for extensions of Central Bank credit that did not count in the government's budget deficit--is the "quasi-fiscal deficit." Its total increased from about 2 percent of GDP in 1985 to about 4 percent in 1987. Meanwhile, the government's tax revenue fell steadily in real terms, partly because of tax reductions implemented to hold down business costs and partly because of the effect of inflation in cutting down the real value of tax payments. Added together, the fiscal deficit plus the quasi-fiscal deficit increased from 5 percent of GDP in 1985 to 11 percent by 1987.

The two horsemen of this particular apocalypse--the external deficit and the swift rise of Central Bank credit--would have made 1988 a bad year no matter what else happened. But President Garc�a guaranteed financial disaster by his totally unexpected decision in July 1987 to nationalize the banks not already under government ownership. No one has yet been able to explain why he decided to do so. It would not seem to have been a move necessary for any component of his program, or needed for government control in a banking sector in which it already had a dominant position. In any case, the action underlined the unilateral character of economic policy action under Peru's presidential system and wrecked any possibilities of further cooperation with private sector leadership. Private investment began to fall, and the whole economy followed it down shortly thereafter.

The Garc�a government tried a series of major and minor new policy packages from early 1988 into 1990 to no avail. The new policies never succeeded in shutting off the rapid infusion of Central Bank credit that was feeding inflation, even when they did succeed in driving production down significantly in 1989. Manufacturing production fell 18 percent in that year, agricultural output 3 percent, and total GDP 11 percent. Simultaneously, inflation increased from a record 666 percent in 1988 to a new record of 3,399 percent for 1989. The one positive change was the external current-account deficit: the fall in domestic production and income was so steep that the current account went from a deep deficit to a substantial surplus. The internal cost was perhaps clearest in terms of real wages: the minimum wage in real terms for urban labor fell 61 percent between 1987 and 1989, and average real wages in manufacturing fell 59 percent.

Peru

Peru - The Fujimori Government

The Fujimori administration began with yet another reversal of practically all the economic policies of the preceding government, in conditions that clearly required drastic corrective action. Its main immediate target was to stop the runaway course of inflation. Beyond that, the goals included repudiating protection and import substitution, returning to full participation in the world trading and financial systems, eliminating domestic price controls and subsidies, raising public revenue and holding government spending strictly to the levels of current revenue, initiating a social emergency program to reduce the shock of adjustment for the poor, and devoting a higher share of the country's resources to rural investment and correction of the causes of rural poverty. In practice, new measures came out in bits and pieces, dominated by immediate concern to stop inflation; actions taken in the first year did not complete the program.

Preoccupation with inflation was natural enough, after the steep rise of 1989 and the months immediately preceding the change of government. The monthly rate of inflation ranged between 25 percent and 32 percent in the second half of 1989, exceeded 40 percent in June 1990, and amounted to 78 percent by July. The deficit of the central government increased from 4 percent of GDP in January 1990 to 9 percent by May. The money supply of the country increased six times over from January to the end of July. The new government had to act quickly, and did.

The most dramatic immediate action was to eliminate price controls for private-sector products and to raise prices of public-sector products to restore financial balance for public firms. The price of gasoline, previously driven down to the equivalent of twelve United States cents a gallon, was multiplied by thirty times. For the consumer price index (CPI), the shocks caused an increase of 136 percent in one day.

Eliminating price controls in the private sector and raising prices charged by state firms had three objectives. First, the price increases for the public-sector firms and government services were meant to restore revenue to a level that would allow the government to stop borrowing from the Central Bank. Second, the rise in prices was intended to reduce aggregate demand by cutting the liquidity of business and the purchasing power of the public. Third, with everything priced far higher relative to public purchasing power, it was expected that market forces would begin to operate to drive some prices back down, reversing the long trend of increases in order to help break the grip of inflationary expectations.

To back up the impact of the price shocks, the government declared that it would keep its own expenditure within the limit of current revenue and stop the other two large streams of Central Bank credit creation: Central Bank financing for agricultural credit and for the system of subsidies supporting differential exchange rates. The multiple exchange rates in effect under Garc�a were to be unified, and the unified rate was to be determined by market forces. Further, competition from imports to restrain inflation and access to imported supplies for production would both be improved by taking away quantitative restrictions and reducing tariff rates.

The new policies helped greatly to bring down the rate of inflation, although they fell short of accomplishing full stabilization. Against an inflation rate that had reached approximately 2,300 percent for the twelve months to June 1990, the rate of 139 percent for the twelve months to December 1991 can be seen as a dramatic improvement. But the latter was still more than double the government's intended ceiling for 1991 and still extremely high relative to outside world rates of inflation. The last quarter of 1991 looked more promising, with the monthly rate down to 4 percent, but it had risen to 7 percent by March 1992. Inflationary dangers clearly remained troublesome, especially in view of two factors that should have stopped inflation more decisively: a deeply depressed level of domestic demand and an unintended increase in the real exchange rate, making dollars cheaper.

Domestic demand has been held down by the combination of the price shock at the start of the stabilization program, steeply falling real wages, reduced government deficits, and much tighter restraint of credit. All these were deliberate measures to stop inflation, accepting the likely costs of higher unemployment and restraint of production as necessary to that end. In 1990 GNP fell 3.9 percent, aggravating the plunge of 19 percent between 1988 and 1990. In 1991 production turned up slightly, with a gain of 2.9 percent in GNP. That situation left output per capita essentially unchanged from 1990 and at 29 percent below its level a decade earlier.

The incomplete success in stopping inflation created an extremely difficult policy conflict. Recovery could in principle be stimulated by more expansionary credit policies and lower interest rates, which would favor increased investment, depreciation of the currency to help producers compete against imports, and improved exports. But continuing inflation and the fear of accelerating its rate of increase argued instead for keeping a very tight rein on credit and thereby blocked the actions needed for recovery. This conflict became particularly acute over the question of what to do about the exchange note: the real exchange rate went in exactly the wrong direction for recovery by appreciating when depreciation was both expected and needed.

The decision to remove controls on the exchange rate had been expected to lead to a much higher foreign-exchange price, to encourage exports, and to permit import liberalization without a surging external deficit. But when the rate was set free, the price of dollars went down instead of going up. That initial effect could be explained by the tight restraints imposed on liquidity, which drove firms and individuals who held dollar balances to convert them to domestic currency in order to keep operating. This movement should presumably have gone into reverse when holdings of dollars ran out, but fully eighteen months later no reversal had occurred. Dollars remained too cheap to make exports profitable and too cheap for many producers to compete against imports for several reasons, including the continuing influx of dollars from the drug trade into street markets and then into the banking system. A second reason has involved the continuing low level of domestic income and production, and corresponding restraint of demand for imports as compared with what they would be in an expanding economy. But perhaps the most fundamental reasons have been the continuing squeeze on liquidity in terms of domestic currency and the resulting high rates of interest for borrowing domestic currency, which strongly favor borrowing dollars instead or repatriating them from abroad. All this means that the economy has had no foreign-exchange problem, but also that incentives to produce for export have been held down severely, when both near-term recovery and longer-term growth badly need the stimulus of rising exports.

The government was more successful in the part of its program aimed at trade liberalization. As has been noted, the average tariff rate was cut greatly in two steps, in September 1990 and March 1991. Quantitative restrictions were eliminated, and the tariff structure was greatly simplified. Effective protection was brought down to a lower level than at any point since the mid1960s , with a more coherent structure that left much less room for distorted incentives.

Although stabilization and structural reform measures have thus shown some success, the government's program has not taken adequate action to prevent worsening poverty. Its announced programs of short-term aid in providing food and longer-term redirection of resources to get people out of poverty by programs designed to help them raise their productivity have not yet been implemented in any meaningful way. Private charitable agencies, the United Nations (UN), and the United States Agency for International Development (AID) have helped considerably through food grants to stave off starvation. But the government itself has done little, either to alleviate current strains on the poor or to open up new directions that promise gains for them in the future.

Peru

Peru - Government

PERU, IN 1980, was one of the first countries in South America to undergo the transition from long-term institutionalized military rule to democratic government. By 1990, however, Peru was in the midst of a social, economic, and political crisis of unprecedented proportions that threatened not only the viability of the democratic system but also civil society in general.

More than a decade of steep economic decline had resulted in a dramatic deterioration in living standards for all sectors of society and a vast increase in the large proportion of society that was underemployed and below the poverty line. Per capita incomes were below their 1960 levels. Accompanying the economic decline in the 1980s was a rise in insurgent violence and criminal activity. There was also a marked deterioration in the human rights situation--over 20,000 people died in political violence during the decade.

The crisis had partial roots in the failure of successive governments to implement effective economic policy and to fully incorporate the marginalized (informal) sector of the population into the formal economic and political systems. Politics were dominated by personalities rather than programs and by policy swings from populist policies to neoliberal stabilization strategies.

The concentration of decision-making power in the persona of the president and the major swings in policy took an enormous toll on the nation's political system and state institutions. The judicial and legislative branches, already inadequately funded and understaffed, were constantly bypassed by the executive. State institutions, meanwhile, already burdened by excessive bureaucracy, were virtually inoperative because government resources had all but disappeared. Political parties had been increasingly discredited, having failed to provide credible alternatives to the malfunctioning state system with which they were associated. Both extrasystem movements, such as neighborhood organizations and grassroots groups, and antisystem movements, such as guerrilla forces, particularly the Shining Path (Sendero Luminoso--SL), had increased in size and importance. The breach between the Peruvian state and civil society had widened. The political system was fragmented and polarized to an unprecedented degree, and society, which was immersed in a virtual civil war, had become increasingly praetorian in nature.

Despite the desperate nature of the socioeconomic situation and the extent of political polarization, Peru successfully held its third consecutive elections in April and June 1990. Agronomist Alberto K. Fujimori, a virtual unknown, defeated novelist Mario Vargas Llosa by a wide margin. The victory of Fujimori and his Cambio '90 (Change '90) front was seen as a rejection of traditional politicians and parties, as well as of Vargas Llosa's proposed orthodox economic "shock" program.

Despite his wide popular margin, Fujimori faced substantial constraints early on. One was his lack of an organized party base or a working majority in either of the two houses of Congress. Another was that, as a result of hyperinflation, the lack of government resources, and the clear preferences of international lending agencies, such as the International Monetary Fund (IMF) and World Bank, he had little choice but to implement the orthodox shock program that he had campaigned against.

Although Fujimori made impressive strides during his first year in the implementation of structural economic reforms, there was substantial popular disaffection owing to the high social costs of the "Fujishock" program and to the government's failure to follow through on promises of a social emergency program to alleviate those shocks. Resource constraints inherited from the previous government severely limited the Fujimori administration's ability to act on the social welfare front. Fujimori lost the support of much of his Cambio '90 front when he turned to orthodox economics. In addition, he was forced to rely on a series of "marriages of convenience" with various political forces in Congress in order to pass legislation. He also had to rely on a sector of the army for institutional support.

On April 5, 1992, Fujimori suspended the constitution, dissolved the Congress and the judiciary, and placed several congressional leaders and members of the opposition under house arrest. The measures, which were fully supported by all three branches of the armed forces, were announced in the name of fighting drug traffic. They amounted to an autogolpe (self-coup): a military coup against the government led by the president himself. The government held elections for the Democratic Constituent Congress (Congreso Constituyente Democr�tico) on November 22, 1992, and municipal elections on January 29, 1993.

<>GOVERNMENTAL SYSTEM
Constitutional Development
<>The President
<>The Legislature
<>The Judiciary
<>Public Administration
<>Local and Regional Government
<>The Electoral System
<>POLITICAL PARTIES
American Popular Revolutionary Alliance
<>Popular Action
<>The Christian Democrats
<>The Democratic Front
<>The Left
<>Change '90
<>Nonparty Organizations
<>INTEREST GROUPS
The Military
<>The Church
<>Economic Associations
<>Labor Unions
<>Students
<>News Media
<>POLITICAL TRENDS
Roots of the 1990-91 Crisis
<>The Transition to Democracy
<>The Garc�a Government, 1985-90
<>The 1990 Campaign and Elections
<>The Fujimori Government
<>FOREIGN RELATIONS

Peru

Peru - GOVERNMENTAL SYSTEM

During the first five months of 1992, Peru was a republic with a civilian government, which had a popularly elected president, a bicameral legislature, and an independent judicial branch. Peru's civilian government ended indefinitely as a result of Fujimori's autogolpe of April 5, 1992. The constitution of 1979 remained suspended and its Congress and judiciary remained dissolved during the rest of 1992. The following sections describe Peru's legitimate civilian government as it existed prior to April 5, 1992.

Constitutional Development

Until April 5, 1992, Peru was governed according to a constitution that became effective with the transition to civilian government in 1980. From the time of the declaration of independence by Jos� de San Mart�n on July 18, 1821, up until the constitution of 1979, Peru had ten constitutions. All of them established a presidential form of government, with varying degrees of power concentrated in the executive. The French- and Spanish-influenced constitution of 1823, which abolished hereditary monarchy, was the first formal organic law of the Peruvian state drawn up by a constituent assembly under a popular mandate.

The departure of Sim�n Bol�var Palacios (1824-25, 1826) on September 3, 1826, ushered in a long period of revolt and instability with only brief periods of peace. The presidency changed twelve times between 1826 and 1845. During this period, Peru was governed under three constitutions--those of 1828, 1834, and 1839. There was little variation in the basic form of these constitutions. All provided for separate executive, legislative, and judicial branches, for indirect election of the president and Congress, for a centralized regime, and for extensive personal rights and guarantees. The only major variations were in details regarding specific powers of the executive.

The 1828 constitution moved toward decentralization and showed considerable influence by the United States. For example, it provided for presidential election by popular vote. In subsequent constitutions, there was a varying emphasis on executive versus legislative power, and gradual, progressive improvements, such as the subordination of the military to civilian rule, direct popular elections, and the granting of the right to association. The 1839 constitution extended the presidential term from four to six years, with no reelection.

When Marshal Ram�n Castilla (1845-51, 1855-62) emerged as dictator in 1845, a period of relative peace and prosperity began. The 1856 constitution, promulgated during Castilla's rule, was more liberal and democratic than any of its predecessors. It provided for the first time for direct popular election of the president and Congress. However, a more conservative constitution was promulgated in 1860 and remained in force, with two brief interruptions--1862-68 and 1879-81--for sixty years. Although it reduced the presidential term to four years (with reelection after an intervening term), it greatly increased the powers of the president and provided for a much more centralized government. Nevertheless, it laid important bases for the future executive-legislative relationship. In particular, it established a requirement that cabinet ministers, although responsible to the president, report to Congress. Furthermore, it explicitly permitted Congress, at the end of each legislative session, to examine the administrative acts of the president to determine their conformity with the constitution and the laws.

The 1920 constitution was generally more liberal than its predecessor, the 1860 charter, and provided for more civil guarantees. Although it established a strong executive and lengthened the presidential term from four to five years, it placed several new checks on that branch. It deprived the president of his traditional right to suspend constitutional guarantees during periods of national emergency and strengthened the principle of ministerial responsibility to Congress. In particular, it gave Congress the right to force the resignation of ministers by a vote of no confidence. Having promulgated the constitution, however, Augusto B. Legu�a y Salcedo (1908-12, 1919-30) ignored it almost completely and established himself as one of Peru's strongest dictators.

The 1933 constitution was, at least in theory, operative until 1980, although civilian government was interrupted from 1933 to 1939, 1948 to 1956, and 1968 to 1980. The 1933 constitution reduced presidential powers and instituted a mixed presidential-parliamentary system. It also instituted compulsory and secret balloting, as well as provisions for religious tolerance and freedom of speech. The president could not remove or nominate cabinet members without parliamentary consent. This resulted in a considerable number of executive-legislative stalemates, the most notable of which occurred during the first government of President Fernando Bela�nde Terry (1963-68, 1980- 85).

After a prolonged stalemate over issues ranging from tax and agrarian reforms to a contract with the International Petroleum Corporation, Bela�nde was overthrown on October 3, 1968, by the armed forces, led by General Juan Velasco Alvarado (1968-75). The resulting "revolutionary government" was a progressive, left-wing military regime, which attempted to implement a series of structural reforms; it maintained dictatorial powers but was only mildly repressive. After an intraregime coup in 1975 and a turn to orthodox economic management in the face of rising fiscal deficits and inflation, as well as increasing levels of social unrest, the military government called for a civilian-run Constituent Assembly to draft a new constitution and hold elections.

The constitution of 1979, signed by the president of the Constituent Assembly, V�ctor Ra�l Haya de la Torre, on July 12, 1979--while he was virtually on his death-bed--sought to restore strong presidential power. Largely influenced by the French Fifth Republic, the constitution of 1979 established a presidential system with a bicameral legislature and a Council of Ministers, which was appointed by the president. An excessively broad document, the 1979 charter covered a host of rights and responsibilities of government, private persons, and businesses. It also established the structure of government and mandated measures to effect social changes, including the eradication of illiteracy and extreme poverty. The constitution could be amended by a majority of both houses of Congress.

The constitution guaranteed a series of liberties and rights, including the freedom of expression and association and the right to life, physical integrity, and "the unrestricted development of one's personality." Although the Roman Catholic Church is entitled to the cooperation of the government, Catholicism is not the official religion of the country, and religion is a matter of personal choice. Workers were guaranteed collective bargaining rights and had the right to strike and to participate in workplace management and profits. Public servants, with the exception of those with decision-making power and the armed forces and police, also had the right to strike.

Constitutional guarantees could be suspended during a state of emergency, defined as the disruption of peace or the domestic order, a catastrophe, or grave circumstances affecting the life of the nation. A state of emergency could not last longer than sixty days but could be renewed repeatedly. During such a time, the armed forces retained control of internal order. Guarantees of freedom of movement and of assembly, and freedom from arbitrary or unwarranted arrest and seizure were suspended. Constitutional guarantees could also be suspended during states of siege, defined as an invasion, a civil war, or imminent danger that one of these events may occur. At least half of the nation lived under state-of-emergency conditions beginning in the second half of the 1980s, owing to the increase in insurrectionary activities by the nation's two major guerrilla groups.

Peru

Peru - The President

The president, who must be Peruvian and over thirty-five years of age, was elected to a five-year term by direct popular vote, along with the first and second vice presidents. The president could not serve two consecutive terms.

The constitutional president had a wide range of powers and served as chief of state and commander in chief of the armed forces. He had the power to appoint members to the Council of Ministers and the Supreme Court of Justice, submit and review legislation enacted by Congress, rule by decree if so delegated by the Congress, declare states of siege and emergency, and dissolve the Chamber of Deputies, if it voted to censure the Council of Ministers three times in one term of office.

In practice, the constitutional president had even more power, as he had a remarkable amount of freedom to rule by decree. Hernando de Soto, an adviser to the Fujimori government, stated in October 1988 that 95 percent of Peruvian laws were passed by presidential decree. Article 211 of the constitution gave the president the authority "to administer public finances, negotiate loans, and decree extraordinary measures in the economic and financial fields, when the national interest so mandates and with responsibility to give account to Congress." An extraordinary number of measures--134,000 per five-year mandate, or 100 per working day--were passed in this manner in the 1970s and 1980s. In the words of De Soto, "every five years we elect a dictator".

As no midterm elections for Congress were held, opposition parties had no means of strengthening their position once the president was elected. Moreover, local and regional governments have remained underdeveloped and largely dependent on the central government for resources. Thus, power has remained concentrated in the central government. As the president could bypass Congress with relative ease and rule by decree, power was even more centralized in the persona of the chief executive. Without consecutive reelection or midterm elections, there was no mechanism by which to make the president accountable to the electorate.

Under the Fujimori government, De Soto was instrumental in initiating a reform of this process, the Democratization of the System of Government, which required laws to be submitted to public referendum before they could be passed. A watered-down version of this reform was passed in March 1991. Although this version was not expected to have notable effects on the actual process, the debate over reform played an important role in heightening public awareness of the accountability issue.

The Council of Ministers consists of a prime minister and the specific sectoral ministers, in areas such as economics, education, health, and industry. In 1986, during the government of Alan Garc�a P�rez (1985-90), a Ministry of Defense was created, unifying the three armed forces under the auspices of one ministry. Prior to this, the army, navy, and air force each had its own ministry. The ministers could be called to appear in Congress for an interpellation (interpelaci�n) at any time, as could the entire cabinet (the latter no more than three times per term). It is traditional for all ministers to resign if the prime minister resigns.

It has also been traditional for the prime minister to serve concurrently as economics minister, although there have been several exceptions. After the resignation of a very popular and powerful prime minister, Juan Carlos Hurtado Miller, in February 1991, President Fujimori separated the posts of prime minister and minister of economy, appointing Carlos Torres y Torres and Carlos Bolo�a Behr, respectively, to those positions. The president was purportedly uncomfortable with the degree of power that Hurtado Miller had and wanted to retain firmer control of the cabinet in general and economic policy in particular. At the same time, Fujimori combined the positions of prime minister and minister of foreign affairs. In a strong presidential system such as Peru's, the position of prime minister, without control of some other functional ministry, is a relatively impotent one.

Peru

Peru - The Legislature

The legislature had two houses: a Senate composed of 60 members and a Chamber of Deputies composed of 180 members. Members of Congress were elected to five-year terms of office, which ran concurrently with those of the president and vice presidents. Members of both chambers had to be native Peruvians; senators had to be at least thirty-five years of age; deputies, twenty-five. There was no prohibition on the reelection of congressional representatives.

Congress had the power to initiate and pass legislation; interpret, amend, and repeal existing legislation; draft sanctions for violation of legislation; approve treaties; approve the budget and general accounts; authorize borrowing; exercise the right of amnesty; and delegate the legislative function to the president. A vote of two-thirds of each house was required to pass or amend legislation. The constitution mandated a balanced budget. If Congress did not come up with a balanced budget by December 15 of each year, the president promulgated a budget by executive decree. Congress convened twice annually, from July 27 to December 15 and again from April 1 to May 31.

Members of Congress were elected according to their position on party lists, rather than on the basis of local or regional representation, and thus did not have a strong regional or executive base of support. This is not to say that they had no regional representation. Whereas members of the Senate were elected by regions, members of the Chamber of Deputies were distributed in accordance with the d'Hondt system of proportional representation, which is based primarily on electoral density, with at least one deputy from each district.

Voters cast votes for a particular party, which presented a list of candidates in numerical order of preference. Voters were allowed to indicate a first-choice candidate, and these votes were tallied as "preferential votes," which might determine a candidate's position on the list in future elections, or which region he or she represents. According to the percentage of votes per region or department, a certain number of seats were allotted in the Congress for that party. A candidate's position on the party list determined whether or not he or she obtained a congressional seat. There was, however, no direct regional representation in the central government, a situation that would not be changed by the introduction of regional governments, as their role was to be strictly limited to the regions.

Congress had the power to censure the Council of Ministers and to demand information through interpellation. Yet, this gave it more of a reactive power than anything else. If the Chamber of Deputies used its vote of no confidence three times, the president could dissolve the body. Although Congress could make life difficult for the executive branch through censure, interpellation, or the creation of special investigative commissions, these processes occurred largely after-the-fact.

Particularly with the increase in insurgent violence and the large proportion of the country under emergency rule, the power of the Congress to pass legislation with an impact on significant sectors of the population was increasingly limited. At times, though, after-the-fact processes had resulted in the halting or repeal of damaging legislation. For example, President Garc�a's decree nationalizing banks in July 1987 was repealed in late 1990, and President Fujimori's Decree Law 171, which legislated that all crimes committed by the military in the emergency zones be tried in military courts, was repealed in early 1991. In addition, the Congress's special investigative commissions on issues such as human rights and judicial corruption, although perhaps unable to have immediate impact on policy, have been quite successful at bringing such matters to public attention.

The discretionary power accorded the president was designed to avoid the stalemate that occurred prior to 1968, yet it resulted in a system that was highly concentrated in the power of the executive, with little or no public accountability and little significant input on the part of the legislature. Although the Congress could hold ministers accountable for their actions, there was little it could do, short of impeachment, to affect the operations of the president. The president, meanwhile, unconstrained by midterm elections or immediate reelection, had little incentive to build a lasting base of support in the legislature.

Peru

Peru - The Judiciary

The Supreme Court of Justice was the highest judicial authority in the nation. The twelve Supreme Court justices were nominated by the president and served for life. The nominations had to be approved by the Senate. The Supreme Court of Justice was also responsible for drawing up the budget for the judiciary, which was then submitted to the executive. The budget could be no less than 2 percent of the government's expenditures. Under the Supreme Court of Justice were the Superior Courts, which were seated in the capitals of judicial districts; the Courts of First Instance, which sat in provincial capitals and were divided into civil, criminal, and special branches; and the justices of the peace in all local centers.

Several other judicial functions are worthy of note. The public prosecutor's office was appointed by the president and was responsible for overseeing the independence of judges and the administration of justice, representing the community at trials, and defending people before the public administration. Public attorneys, who are also appointed by the president, defend the interests of the state. The office of the Public Ministry was made up of the attorney general and attorneys before the Supreme Court of Justice, Superior Courts, and the Courts of First Instance. Public attorneys defended the rights of citizens in the public interest against encroachment by public officials.

The National Elections Board established voting laws, registered parties and their candidates, and supervised elections. It also had the power to void elections if the electoral procedures were invalid. The six-member board was composed of one person elected by the Supreme Court of Justice, one by the Bar of Lima, one by the law faculty deans of the national universities, and three Peru's regional boards.

Although in theory the judicial system was independent and guaranteed at least minimal operating financial support, in practice this was far from the case. The system had been hampered by scarce resources, a tradition of executive manipulation, and inadequate protection of officials in the face of threats from insurgents and drug traffickers. Even without the existence of guerrilla movements, the system was inadequately staffed to deal with the number of cases from criminal violations. It was not uncommon for detainees to spend several years in prison awaiting a hearing. In addition, in the emergency zones, where guerrillas were operating, security forces have had virtual carte blanche in the areas of interrogation and detention, and suspects often have been held incommunicado. Imprisoned suspects awaiting trial have subsisted in medieval conditions. In 1990 the Ministry of Justice recorded 60 deaths from starvation and a backlog over several years of 50,000 unheard cases.

The executive branch traditionally manipulated the judiciary for its own purposes, using its ability to appoint and remove certain judges for its own political ends. For example, when a Superior Court judge ruled that President Garc�a's nationalization of Peru's banks was unconstitutional, Garc�a merely replaced him with a judge from his party, the American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana--APRA), who then ruled in his favor.

It also was common for known terrorists or drug traffickers to be released for "insufficient evidence" by judges with no protection whatsoever but with responsibility for trying those suspected of terrorism. Largely because of corruption or inefficiency in the system, only 5 percent of those detained for terrorism had been sentenced by 1991. Those responsible for administering justice were under threat from all sides of the political spectrum: guerrilla movements, drug traffickers, and military-linked paramilitary squads. Notable cases included the murder of the defense attorney for the SL's number two man, Osm�n Morote Barrionuevo, by an APRA-linked death squad, the Rodrigo Franco Command; the self-exile of a public attorney after repeated death threats during his investigation of the military's role in the massacre of at least twenty-nine peasants in Cayara, Ayacucho Department, on May 14, 1988; a bloody letter-bomb explosion at the headquarters of the Lima-based Pro-Human Rights Association (Asociaci�n Pro-Derechos Humanos--Aprodeh); and the March 1991 resignation of an attorney general of the military court martial, after he received death threats for denouncing police aid and abetment of the rescue by the T�pac Amaru Revolutionary Movement (Movimiento Revolucionario T�pac Amaru-- MRTA) of one of its leaders, Mar�a Lucero Cumpa Miranda. The judicial terrorism was hardly surprising, given the lack of protection for judges dealing with terrorism cases; many of them normally rode the bus daily to work, totally unprotected. Finally, owing to neglect of the judicial system by successive governments, the Supreme Court of Justice lacked a significant presence at the national level.

In the context of widespread terrorism, what was legal in theory and what happened in practice had little to do with each other. As the situation increasingly became one of unrestrained violence, the capability of the judicial system to monitor the course of events was reduced markedly. In addition, the judicial system was unable to escape the loss of confidence in state institutions in general that had occurred among the Peruvian public. The discrediting of the judicial system was a significant step toward the total erosion of constitutional order.

Peru

Peru - Public Administration

Public administration in Peru, already one of the weakest on the continent as of 1968, has experienced a dramatic increase in the size of state enterprises and the number of civil servants. That increase has been accompanied by a gradual decrease in available funds to run the administration, partly because of the inefficiency of several of the state-sector enterprises. The Petroleum Enterprise of Peru (Petroleras de Per�--Petroper�), for example, lost US$700 million in 1987 alone. Tax collection has been virtually nonexistent, with the government having to rely on a tax base of 7 percent of gross national product (GNP), a figure comparable to Bangladesh's 8.6 percent and Uganda's 8.2 percent. Public expenditures per person were US$1,100 in 1975; in 1990 they were only US$180.

These trends were exacerbated markedly during the 1985-90 APRA government of Garc�a, as party patronage practices dominated the administration of the state, and the number of state employees increased from about 282,400 in 1985 to almost 833,000 in 1990, while government resources all but disappeared because of enormous fiscal deficits and hyperinflation. State-sector workers were not even paid during the last few months of the Garc�a government.

The result was a rise in corruption and inefficiency, and Peru had one of the most inefficient state sectors in the world. Improvements in the future were likely to be guided by budgetary constraints, as the resources simply did not exist to maintain the existing number of civil servants in the public administration. The short-term costs would be a cutback in already scarce public services and a possible increase in political protest among displaced civil servants. Most Peruvians simply did without the services that even a minimal public administration would normally offer, or else they found some way of attaining them in the informal sector, usually at a much higher price.

Peru

Peru - Local and Regional Government

Municipal Governments

The process of independent municipal government was initiated with the first nationwide municipal elections in December 1963. This process was halted by twelve years of military rule after 1968, but was reinitiated with the November 1980 municipal elections. Each municipality has been run autonomously by a municipal council (consejo municipal), a provincial council (consejo provincial), and a district council (consejo distrital), all of whose members were directly elected. Municipalities had jurisdiction over their internal organization and they administered their assets and income, taxes, transportation, local public services, urban development, and education systems.

Yet, the autonomy of municipalities may have been reduced by their financial dependence on the central government. Their funds have come primarily from property taxes, licenses and patents required for professional services, market fees, vehicle taxes, tolls from bridges and roads, fines, and donations from urban migrant clubs. In the majority of municipalities, where the bulk of the inhabitants are poor, those with legal title to a home are in the minority; few people even own their own vehicles; roads are not paved; and there is a dramatic shortage of basic services, such as water and electricity. Most municipalities can hardly generate the revenue to cover operating costs, much less to provide desperately needed services. Thus, a degree of dependence on the central government for resources may limit somewhat the potential for autonomous initiative. Although this is hardly unique in Latin America,the shortage of resources in Peru is particularly extreme.

The municipal process has also come under substantial threat from the SL. An important component of its strategy was to sabotage the 1989 municipal and presidential elections. The group launched a ruthless campaign in which elected officials or candidates for electoral offices were targeted. During the 1985- 89 period, the SL assassinated 45 mayors. In a campaign of violence prior to the 1989 elections, it killed over 120 elected officials or municipal candidates, resulting in the resignation or withdrawal of 500 other candidates. In December 1988, dozens of Andean mayors resigned, citing lack of protection from terrorist threats; many rural towns were left with no authorities whatsoever. Voters were also threatened with having their index fingers chopped off by the SL. The threats were most effective in the more remote regions, such as Ayacucho, where null and blank voting in the 1990 elections was the highest in the country.

Regional Governments

The constitution of 1979 mandated the establishment of regional governments in Peru. Regionalization was part of the original APRA program of the 1920s. In 1988 the APRA government finally imitated the process with a law providing for the creation, administration, and modification of regions, which would replace the former departments. Between 1987 and 1990, the APRA government also issued corresponding laws creating eleven of the twelve regions called for under law, with the Lima/Callao region remaining under negotiation. In 1991 debates in Congress continued on the Lima/Callao and San Mart�n regions, with the latter voting to separate from La Libertad Department. The highly politicized debates centered on whether senators should be elected by region or by national district, and on the method that regional assemblies are elected. Five of the regions held their first elections for regional assemblies on November 12, 1989, in conjunction with the municipal elections, and the other six regions held elections in conjunction with the April presidential elections.

By law each regional assembly consisted of provincial mayors (30 percent), directly elected representatives (40 percent), and delegates from institutions representative of the social, economic, and cultural activities of the region (30 percent). In 1990 APRA and the United Left (Izquierda Unida--IU) dominated the regions, with APRA controlling six, IU three, and the Democratic Front (Frente Democr�tico--Fredemo) only one.

The process of regionalization was more one of administrative shuffling than of substance. However, the regional governments faced the same resource constraints that substantially limited the ability of municipal governments to implement independent activities. The central government is in theory supposed to transfer funds and assets, such as state sector enterprises, to the regions, but in practice this has only happened piecemeal. This tendency had been exacerbated by the severity of the economic crisis and the poor fiscal situation inherited by the Fujimori government. The dynamic was made more conflictive as the regional governments were controlled by parties in opposition to the central government. The cutting of resources allocated to regional governments in the 1991 budget was a good indication of the constraints that regional governments would face for the foreseeable future. Moreover, the executive had taken back some powers that were originally given to the regions, such as control over the national tourist hotels. The regional governments, meanwhile, had heightened the debate with actions such as the refusal to pay the executive what was owed for electricity tariffs.

Peru

Peru - The Electoral System

Suffrage was free, equal, secret, and obligatory for all those between the ages of eighteen and seventy. The right to participate in politics could only be taken away when one was sentenced to prison or given a sentence that stripped a person of his or her political rights. No political party was given preference by the government, and free access to the governmentowned mass media was given in proportion to the percentage of that party's results in the previous election. The National Elections Board, which was autonomous, was responsible for electoral processes at the national and local levels.

National elections for the presidency and the Congress were held every five years. If no one presidential candidate received an absolute majority, the first- and second-place candidates were in a runoff election. The president could not be reelected for a consecutive term, but deputies and senators could be.

Direct municipal elections were held every three years. Regional governments were elected every five years. Elections of regional governments were held in conjunction with either the December 1989 municipal or April 1990 national elections.

In the late 1980s and early 1990s, the electoral process came under substantial threat from the SL, which made the sabotaging of elections an explicit goal. Despite terrorist threats in the 1990 presidential elections, voter turnout was higher than in 1985, with the exception of some emergency zones in the southern Sierra, where the abstention rate was as high as 40 percent. Null and blank voting was about 14.5 percent of the total in the first round in 1990 and 9.5 percent in the second.

The threat from the SL was such that in some remote rural towns, there were no local officials at all, because potential candidates were not willing to jeopardize their lives in order to run for office. Although there was no doubt that the SL failed to jeopardize the 1990 elections, it managed to pose a significant threat to the process, particularly in remote rural areas. Given the severity and brutality of the SL's threat, it was actually a credit to the Peruvian electoral process that elections were held regularly and with such high voter-turnout ratios, although fines for not voting were also a factor.

Peru

Peru - POLITICAL PARTIES

Until April 5, 1992, Peru had a multiparty system and numerous political parties, some of which had been in existence for several decades. Yet, in 1990 the Peruvian electorate by and large rejected established parties and voted for a virtual unknown from outside the traditional party system. Alberto Fujimori's rapid and sudden rise to power and the resulting government with no political party base signified a crisis for Peru's party system, and a crisis of representation more generally. These crises resulted from the severity of the socioeconomic situation, and also from the poor performance of several of the traditional parties in government.

American Popular Revolutionary Alliance

APRA, Peru's oldest and only well-institutionalized party, was founded by V�ctor Ra�l Haya de la Torre in Mexico City in May 1924. The APRA program espoused an anti-imperialist, Marxistoriented but uniquely Latin American-based solution to Peru's and Latin America's problems. APRA influenced several political movements throughout Latin America, including Bolivia's Nationalist Revolutionary Movement (Movimiento Nacionalista Revolucionario--MNR) and Costa Rica's National Liberation Party (Partido Liberaci�n Nacional--PLN). Years of repression and clandestinity, as well as single-handed dominance of the party by Haya de la Torre, resulted in sectarian and hierarchical traits that were analogous to some communist parties. In addition, opportunistic ideological swings to the right by Haya de la Torre in the 1950s, in exchange for attaining legal status for the party, resulted in an exodus of some of APRA's most talented young leaders to the Marxist left. These shifts created cleavages between APRA and the rest of society, and were significant obstacles to democratic consensus-building during APRA's 1985-90 tenure in government.

In any case, the party maintained a devoted core of followers that remained permanent party loyalists. In May 1989, APRA chose as its standard bearer Luis Alva Castro, a long-time rival to President Garc�a. APRA was as much a social phenomenon as a political movement, with a significant sector of society among its membership whose loyalty to the party and its legacy was unwavering. Despite APRA's disastrous tenure in power, in the first round of the 1990 elections it obtained 19.6 percent of the vote, more than any other of the traditional parties.

Peru

Peru - Popular Action

Fernando Bela�nde Terry founded Popular Action (Acci�n Popular--AP) in 1956 as a reformist alternative to the status quo conservative forces and the controversial APRA party. Although Bela�nde's message was not all that different from APRA's, his tactics were more inclusive and less confrontational. He was able to appeal to some of the same political base as APRA, primarily the middle class, but also to a wider base of professionals and white-collar workers. The AP had significant electoral success, attaining the presidency in 1963 and 1980, but the party was more of an electoral machine for the persona of Bela�nde than an institutionalized organization. In addition, whereas in the 1960s the AP was seen as a reformist party, by the 1980s--as Peru's political spectrum had shifted substantially to the left--the AP was positioned on the center-right. With the debacle of the second Bela�nde government, the AP fared disastrously in 1985, attaining only 6.4 percent of the vote. In 1990 the AP participated in the elections as a part of the conservative coalition behind Mario Vargas Llosa and suffered, as did all political parties, an electoral rejection.

Peru

Peru - The Christian Democrats

The Christian Democratic Party (Partido Dem�crata Cristiano-- PDC) was a relatively small, center-right party influenced by Christian Democratic thought. Slightly more conservative than the AP, the PDC, which was founded in 1956, also was perceived to be more to the right as Peru's spectrum shifted left. The PDC on its own was not able to garner an electoral representation of over 10 percent after 1980. A splinter group, the Popular Christian Party (Partido Popular Cristiano--PPC), was founded by Luis Bedoya Reyes (the mayor of Lima from 1963 to 1966) in 1966.

Peru

Peru - The Democratic Front

The AP and the PPC together provided the organizational basis for Mario Vargas Llosa and his independent Liberty Movement (Movimiento de Libertad). Vargas Llosa, who entered politics to protest Garc�a's nationalization of Peru's banks in 1987, started out as an independent, backed by the Liberty Movement. In late 1988, however, Vargas Llosa made a formal alliance, known as Fredemo, with the AP and the PPC, because he felt this provided him with a necessary party organizational base. By doing so, he alienated several members of his own coalition, including one of his primary backers, Hernando de Soto, who felt that Vargas Llosa was allying with the "traditional" right. Analysis of the electoral results indicated that the majority of voters were also reluctant to support Peru's traditional, conservative politicians. The Fredemo campaign spent inordinate amounts of money on advertising--US$12 million, versus US$2 million spent by the next highest spender, APRA. This, in conjunction with the use in television campaign advertisements of white, foreign-born singers, revealed how these parties continued to represent the interests of the nation's elite, who were of European ancestry, and how out of touch they were with the nation's poor, who were of indigenous heritage.

Peru

Peru - The Left

The 1990 results also demonstrated that the population was unwilling to vote for the nation's hopelessly divided left. Split into Leninist, Maoist, Marxist, Trotskyite, and Socialist camps, the left in Peru had been severely fragmented since its origins. It had its first experience as a legally recognized electoral force in the 1978-80 Constituent Assembly, in which the left made up approximately one-third of the delegates. Despite its relative strength at the grassroots level, the left was unable to unite behind one political front in the 1980 elections, and it contested the elections as nine separate political factions. This limited its potential in those elections and played into the hands of Bela�nde. The left together attained a total of 16.7 percent of the vote; APRA, divided and leaderless after the death of Haya de la Torre, garnered 27.4 percent; Bela�nde won 45.4 percent.

Shortly after the 1981 elections, the majority of the factions of the Socialist, Marxist, and Maoist left (with the obvious exception of the SL, which had gone underground in the early 1970s), formed the United Left (IU) coalition. By 1986, under the leadership of Alfonso Barrantes Ling�n, the IU was strong enough to take the municipality of Lima, as well as to become the major opposition force to the APRA government. Barrantes had been the runner-up in the 1985 national elections, winning 22.2 percent of the vote.

Yet, there were irreparable divisions from the outset between the moderate Barrantes faction, which remained committed, first and foremost, to democracy, and the more militant factions, which were sympathetic to, if not overtly supportive of, "armed struggle" as a potential route. The existence of two active guerrilla movements made this a debate of overriding importance. Although much of the militant left condemned the brutal tactics of the SL, they remained sympathetic with and indeed often had ties to the more "conventional" tactics of the MRTA.

This breach came to a head in 1989, when Barrantes, the most popular politician the left had in its ranks, and the bulk of the moderates split off and formed the Leftist Socialist Accord (Acuerdo Socialista Izquierdista--ASI). The larger and bestorganized parties, including the radical Mariateguist Unified Party (Partido Unificado Mariateguista--PUM) and the Peruvian Communist Party (Partido Comunista Peruano--PCP), remained in the IU. A divided left quarrelling over ideological differences hardly seemed the solution to Peru's quagmire in 1990. In the 1990 elections, the left had its poorest showing since the formation of the IU, with the ASI and IU together garnering less than 12 percent of the vote.

Peru

Peru - Change '90

Cambio '90 only entered the Peruvian political spectrum in early 1990, but by June 1991 it was the most powerful political force in the nation. Cambio's success hinged largely on the success of its candidate for the presidency, Alberto Fujimori, an agricultural engineer and rector of the National Agrarian University (Universidad Nacional Agrario--UNA) in Lima's La Molina District from 1984 to 1989. Fujimori's appeal to a large extent was his standing as a political outsider.

At the same time, Cambio's success was also attributed largely to its eclectic political base and its active grassroots campaign. Cambio's two main bases of support were the Peruvian Association of Small- and Medium-Sized Businesses (Asociaci�n Peruana de Empresas Medias y Peque�as--Apemipe) and the informal sector workers who associated their cause with Apemipe, and the evangelical movement. Less than 4 percent of the Peruvian population was Protestant, but the Evangelicals were extremely active at the grassroots level, particularly in areas where traditional parties were weak, such as the urban shantytowns and rural areas in the Sierra. Although Cambio only began activities in January 1990, by the time of the elections it had 200,000 members in its ranks.

However, Cambio's success at the polls did not translate into a lasting party machinery. Cambio was much more of a front than a political party, and its ability to hold together was called into question within a few weeks after attaining power. Cambio's two bases of support had little in common with each other except opposition to Vargas Llosa. Their links to Fujimori were quite recent and were ruptured to a large extent when Fujimori opted, out of necessity, for an orthodox economic shock program. Less than six months into his government, Fujimori broke with many of his Cambio supporters, including the second vice president and leader of the Evangelical Movement, Carlos Garc�a y Garc�a, and Apemipe. The latter became disenchanted with Fujimori because small businesses were threatened by the dramatic price rises and opening to foreign competition that the "Fujishock" program entailed.

Peru

Peru - Nonparty Organizations

The rapid rise of Cambio reflected a more far-reaching phenomenon in Peru: the growth of extrasystem democratic political activity. In conjunction with the rise in economic importance of the informal sector was a rise in activity and importance of a host of "informal" political groups: neighborhood organizations, communal kitchens, popular economic organizations, and nongovernment organizations. Although originating largely outside the realm of traditional parties and politics, these groups became critical actors in local-level democratic politics. Usually autonomous and democratic in origin and structure, they were often wary of political parties, which attempted to co-opt them, or at least to elicit their support for wider-reaching political goals. These organizations were primarily concerned with micro-level survival issues, such as obtaining basic services like water and electricity. They tended to support political parties as a convenient way to attain their goals, but just as easily withdrew that support when it did not provide tangible ends. They had a tendency, but by no means a constant one, to vote for parties of the left. This could be explained in part by the Peruvian left's approach to grassroots movements, which was usually--but not always--less sectarian and hierarchical than that of traditional parties, such as APRA.

Thus, the relations that informal groups had with political parties were by no means simple or clear-cut. As the varied results from the 1980-90 elections demonstrate, the urban poor had a tendency, which was not without shifts, to vote for the left. They had few binding ties to political parties, and were quite willing to vote for nonparty actors, from Manuel A. Odr�a (president, 1948-50, 1950-56) in the 1950s to Ricardo Belmont (as mayor of Lima in 1989) and Fujimori in 1990. Because the urban poor's need for basic services was so grave, their vote was most often determined by the most credible promise for basic-service delivery. Broader political goals of the parties were only a concern once basic needs had been met. Still, the gap between these groups and parties was significant. Parties play a role in virtually all consolidated democracies, and the difficulties of governing a fragmented society and polity such as Peru's became increasingly evident as the Fujimori government was forced to implement unpopular economic policies in the absence of an organized political base.

Electoral defeats usually trigger internal party changes and democratization. In 1990 all Peruvian parties faced electoral losses. The parties were well aware of the need to reform in order to remain politically viable entities. In early 1991, the Christian Democrats, for example, launched a process of internal party reform and an evaluation of their relations with groups where their support base was weak, such as the shantytowns. The left underwent a process of ideological and strategic reflection at approximately the same time. Most of the other political parties likely would have followed suit. To the extent that parties failed to reform to adapt to new political realities and to the needs and strategies of the plethora of grassroots groups and local organizations in Peru, a crisis of representation in Peruvian democracy, if and when it was restored, appeared more likely for the foreseeable future, threatening its viability.

Peru

Peru - INTEREST GROUPS

The Military

The military in Peru has traditionally played an influential role in the nation's politics, whether directly or indirectly. Prior to the 1968 revolution, the military was seen as caretaker of the interests of conservative elites, and its involvement in politics usually entailed the repression of "radical" alternatives, particularly APRA. An APRA uprising and brutal military retaliation in Trujillo in 1932 initiated a long period of violence and strained relations between the two. As late as 1962, when General Ricardo P�rez Godoy led a military coup to prevent Haya de la Torre from becoming president, the military was willing to resort to extraconstitutional means to prevent APRA from coming to power.

By 1962, however, it was evident that the military was no longer solely the preserver of elite interests, and that it was increasingly influenced by a new military school of thought, the National Security Doctrine, which posited that development and social reform were integral to national security. The Advanced Military Studies Center (Centro de Altos Estudios Militares-- CAEM) in Lima was a proponent of this philosophy in the 1950s and 1960s. In addition, the Peruvian military's involvement in fighting guerrilla uprisings in the southern Sierra in the mid1960s gave many officers a first exposure to the destitute conditions of the rural poor, and to the potential unrest that those conditions could breed.

Thus, the military's 1968 intervention was far from a typical military coup. Rather, it was a military-led attempt at implementing far-reaching economic and social reforms, such as the Agrarian Reform Law of 1969 and the Industrial Community Law of 1970. The military's lack of understanding of civil society, demonstrated by its authoritarian attempts to control popular participation through a government-sponsored social mobilization agency, the National System for Supporting Social Mobilization (Sistema Nacional de Apoyo a la Mobilizaci�n Social--Sinamos), was largely responsible for the failure of its reforms. When the military left power in 1980, it left a legacy of economic mismanagement, incomplete reforms, and a society more radicalized and politicized than when it had taken over.

Yet, the military's revolutionary experiment changed the image of the institution, as well as its own views about the benefits of direct government control. It was, at least for the foreseeable future, immune from direct intervention in politics. It was no longer seen, however, and no longer perceived itself, as a monolithic conservative institution, but rather as the institution that had attempted to do what no political force had been able to do: radically transform the nation's economy and society. Its failure may have strengthened the voice of conservatives within its ranks, but it retained the awareness that social reform and economic development were critical to Peru's social stability and ultimately its national security. And as keeper of national security, it, more than any other force in the nation, was constantly reminded of this by the presence of the SL and other insurgent groups.

The large proportion of the country under state of emergency rule, coupled with the military's desire to fight against the SL unconstrained by civilian control, had understandably created tensions between successive civilian governments and the military. As in the case of several other transitions to democracy in Latin America, the Peruvian military took precautions to protect its institutional viability and to increase its strength vis-�-vis civilian government. From the outset, the Bela�nde government was forced to accept certain conditions set by the military pertaining to budgetary autonomy and states of emergency. Nineteen days before the surrender of power to the Bela�nde administration, the military passed the Mobilization Law, with minimum publicity in order to avoid civilian reaction. The law enabled the military to expropriate or requisition companies, services, labor, and materials from all Peruvians or foreigners in the country at times of national emergency. These times included cases of "internal subversion and internal disasters." In addition, because the Bela�nde government failed to take the SL seriously until it was too late, the government defaulted to the military in the design and implementation of a counterinsurgency strategy.

The Garc�a government began with a different approach. Garc�a fired three top generals responsible for civilian massacres in the emergency zones, and in a blow to traditional budgetary autonomy, halved an air force order for French Mirage jets. However, Garc�a's image suffered a major blow after he personally gave orders for the military to do whatever was necessary to put down a revolt of the SL inmates in Lima's prisons in June 1986, resulting in the massacre of 300 prisoners, most of whom had already surrendered. As the government lost coherence and as economic crisis and political stalemate set in, pressure on the military subsided, and its de facto control over the counterinsurgency campaign increased.

Because the Fujimori government had no organized institutional base, it was in a difficult position vis-�-vis the military. Although the military had no desire to take direct control of the government, it indicated the one scenario that would force it to intervene--if no one were running the state. Even at the height of the APRA government's crisis, when President Garc�a was in virtual hiding in the government palace, the military could rely on APRA to run the state. If a similar loss of control by President Fujimori occurred, there would be no such institution with a stake in running the state, a scenario that might force the military to act. Fujimori had clearly made a point of building strong support in one sector of the army and in return seemed to be backing increased independence for the military in the counterinsurgency war.

A good example of the military's independence was the passage of Decree Law 171, which stipulated that military personnel in emergency zones were on active duty full time and therefore could only be tried in military courts, which try only for neglect of duty and not for offenses, such as murder or torture. In addition, the government exacerbated tensions with some sectors of the military in September 1990 by refusing to sign a US$93- million aid agreement with the United States that included US$36 million in military aid. The Fujimori government felt the accord's coca eradication policy did not sufficiently take economic development into account. Some within the armed forces, which in general were desperately short of funds, felt that the government should take what it could get. In May 1991, Fujimori conceded to both United States and Peruvian military pressure and signed the accord.

In short, the situation under Fujimori was one of de facto military control, not just of the emergency zones, but of the areas of government that the military perceived to be its domain. Demonstrative of the military's increasing influence over certain areas of government was the fact that the Ministry of Defense and the Ministry of Interior were both headed by generals.

Peru

Peru - The Church

Although Peru does not have an official religion, the Roman Catholic Church--to which over 90 percent of Peruvians belonged-- is recognized in the constitution as deserving of government cooperation. Traditionally, the Roman Catholic Church has monopolized religion in the public domain.

In the Peruvian Catholic Church hierarchy, staunch conservatives, such as Archbishop Juan Landaz�ri Ricketts, wielded a great deal of influence. Six of the total eighteen bishops, including Landaz�ri, belonged to the ultraconservative Opus Dei movement. At the same time, the founder of liberation theology, Gustavo Guti�rrez, was a member of the official church in Peru, and liberation theology had a strong presence at the grassroots level. Unlike Brazil, where the official church could be described as liberal and critical of the more conservative Vatican, or Colombia, where the church was a loyal follower of the Vatican's policies, in the Peruvian Church hierarchy both trends coexisted, or at least competed for influence. Conservatives followed the dictates of Pope John Paul II, a strong proponent of theological orthodoxy and vertical control of the church. This contrasted sharply with the progressives in the Latin American church, who espoused the mandate of Vatican II, which exhorted the clergy to become actively involved in humanity's struggle for peace and justice, and to help the poor to help themselves rather than accept their fate.

At the grassroots level, the church was extremely active at organizing neighborhood organizations and self-help groups, such as communal kitchens and mothers' clubs. Church activities at this level had little to do with theoretical debates at higher levels, although they tended to emanate from the more progressive sectors within. Church-related organizations, such as Caritas (Catholic Relief Services), were active in providing local efforts with donations of food and funds from abroad. Indeed, Caritas had a nationwide network of coverage superior to or at least rivaling that of any state ministry or institution.

In addition to Caritas, the other major nongovernment organizer of communal kitchens and mothers' clubs in Lima was the Seventh Day Adventist Church, which reflected the increasing importance of the Evangelical Movement. Although only about 4.5 percent of Peru's population was Protestant, the Evangelical Movement was extremely active at the grassroots level, and, as aforementioned, was critical to the victory of Fujimori and Cambio '90 in poor areas. The Catholic Church hierarchy felt sufficiently threatened by the Evangelicals' support for Fujimori that it unofficially backed Vargas Llosa, an agnostic, against Fujimori, a Catholic.

The church, to the extent that it was an organizer of the poor, had increasingly come into conflict with the SL. Initially, the SL paid little attention to the clergy. In Ayacucho, for example, where the traditionally oriented church hierarchy had little involvement with social issues, the church was of little relevance to the SL. However, in the late 1980s, the SL's strategy shifted, and the group became more concerned with the church's organizational potential. The SL had a more difficult challenge in organizing support, particularly in areas where the church had been active in encouraging close community bonds, such as parts of Cajamarca and Puno. In such areas, as in the shantytowns surrounding Lima, clergy had increasingly become targets of SL assassinations as well.

In the face of the weakening of other state institutions, the church's role, at least at the grassroots level, had increased in importance. Caritas was the primary mobilizer of food donations and aid during the most critical stage of the Fujimori government's shock stabilization plan. Although the government promised its own social emergency programs, none materialized, and the church surfaced as the primary vehicle for channeling aid to the poor. This activity increased the visibility of the clergy as a target of SL attacks, and posed difficult choices for members of the clergy who continued to operate in the regions where the SL had a strong presence--the majority of the areas where most of the poor of Peru resided.

Peru

Peru - Economic Associations

The major economic associations in Peru were the National Industries Association (Sociedad Nacional de Industrias--SNI), the National Confederation of Private Business (Confederaci�n Nacional de Instituciones Empresariales Privadas--Confiep), and the Apemipe (Peruvian Association of Small and Medium-Sized Businesses). Traditionally, such organizations had played a minimal role in politics. In the 1980s, however, they became actively involved in the nation's politics.

Garc�a's national understanding (concertaci�n) strategy called for cooperation between government and business in economic policy-making. Nevertheless, Garc�a bypassed organized business sectors, the foremost among them being Confiep, and dealt instead directly with the twelve most powerful businesspeople in the country, the so-called twelve apostles. Thus, when Garc�a threatened the entire private sector with his surprise nationalization of the nation's banks, Confiep became one of the most active supporters of the bankers protesting Garc�a's move, and subsequently of Vargas Llosa's Liberty movement. Meanwhile, two former presidents of Confiep--now senators Francisco Pardo Mesones of Somos Libres (We Are Free) and Ricardo Vega Llona of Fredemo--launched independent candidacies in the 1990 elections.

Ironically, Apemipe became politically active in opposition to Vargas Llosa and his proposed policies, which threatened the viability of many small-businesspeople. The former president of Apemipe, M�ximo San Rom�n, ran as first vice president for Cambio, and became president of the Senate.

Organized business, per se, has never been particularly influential in Peru. Instead, strong influence has been wielded by foreign companies, such as the International Petroleum Corporation (IPC), or by families, such as the Romeros and the Wieses, who had substantial holdings across a variety of industries. Yet with the economic situation in May 1991 and the substantial reduction of foreign investment, the domestic private sector had increased in its relative economic importance. Thus, the sector's tendency to use its organizations to influence political trends was likely to continue for the foreseeable future.

Peru

Peru - Labor Unions

The labor movement in Peru has traditionally been weak, and its fate, until 1968, was inextricably linked to APRA. Very much affected by the enclave or anti-union enterprises and by the rural or community background of many of its members, labor was unable to articulate a coherent set of class interests. APRA, with its organizational capacity and popular following, was perhaps the only existing mobilization vehicle for organized labor. APRA dominated the Confederation of Peruvian Workers (Confederaci�n de Trabajadores del Per�--CTP), which it founded in 1944 and which was officially recognized in 1964. The major labor dispute was traditionally between the CTP and APRA, and there was a direct correlation between union activity and the legal status of APRA, which was usually banned by military governments. APRA was more concerned with using the labor movement for its own ends than with enhancing the objectives of organized labor. APRA curtailed strike activity, for example, during its years of collaboration with the government of Manuel Prado y Ugarteche (1939-45, 1956-62).

Union activity increased dramatically during the military years with the introduction of a new labor code and the Industrial Reform Law, culminating in the union-led general strikes of 1977 and 1978. Yet, the labor and industries laws, which made it more difficult to dismiss a worker in Peru than in any industrialized nation, acted as a major disincentive to formal sector employment. This, coupled with the dramatic economic decline of the 1980s, led to a substantial decrease in the relative power of labor unions by 1990.

After 1968 the communist labor movement, the General Confederation of Peruvian Workers (Confederaci�n General de Trabajadores del Per�--CGTP), was legalized and began to erode APRA's monopoly on union support, owing in part to the party's relinquishing its radical stance. The Federation of Workers of the Peruvian Revolution (Central de Trabajadores de la Revoluci�n Peruana--CTRP), which was set up by the military as an attempt to control the workers' movement, never really got off the ground, particularly in the face of the powerful CGTP. In 1991 the CGTP remained the most important union confederation in Peru.

The traits that were held typical of APRA union support-- marginal, socially ambitious, and socially frustrated--began to characterize the Maoist left and its affiliated unions under the CGTP umbrella in the 1970s. These groups, such as the powerful teachers' union, the Trade Union of Education Workers (Sindicato nico de Trabajadores de la Ense�anza--SUTEP), and the miners' confederation, the National Federation of Syndicated Mining and Metallurgical Workers of Peru (Federaci�n Nacional de Trabajadores Mineros y Metal�rgicos Sindicalistas del Per�-- FNTMMSP), were key actors in the general strikes that virtually brought down the military regime in the late 1970s. In addition, the expansion of state industries, each of which had its own affiliated union, substantially increased the number of organized workers.

By the early 1980s, economic decline began to erode the power of unions, as did the neoliberal strategy adhered to by the Bela�nde government. The APRA government completely bypassed organized labor, as it did organized industry in its concertaci�n strategy. Garc�a's populist tactics left little room for organized labor. Although there was a high number of strikes by state sector workers during the Garc�a government, particularly during the last two "crisis" years, they were generally more defensive, in the face of economic decline, than political. Most of the general strikes that were called during the Garc�a government were largely a failure, attaining only minimal support.

One reason that organized labor was less able to pursue political goals was the SL, which launched several "armed strikes" in various cities throughout the Garc�a years. Although these had varying degrees of success, they rarely had union support, as supporting the strikes meant supporting the SL. Increasingly, street protest for political purposes signified support for armed insurrection, which the majority of unions rejected. Indeed, there were even violent clashes between the SL and the CGTP during one general strike.

The SL had its own affiliated union, the Class Movement of Workers and Laborers (Movimiento de Obreros y Trabajadores Clasistas--MOTC), which operated primarily in the industries along Lima's Central Highway (Trans-Andean Highway), the industrial belt of the city. Of the four major companies along this highway, the MOTC had made substantial inroads in three. The MOTC did not necessarily control unions, but was tenacious in its support of strikes and was able to establish a strong presence in these industries. Yet, it also created rifts in the labor movement in general, because many workers did not necessarily want to be affiliated with the SL. Indicative of the extent of conflict was the SL's killing of fifty-one union leaders, primarily mineworkers, between January and May 1989, and its assassination of a prominent textile leader in October 1989.

The one labor sector that was able to exert substantial pressure during the APRA government was the miners' federation, the FNTMMSP, which in 1989 staged a strike involving 90,000 miners and costing the government hundreds of millions of dollars in lost export earnings. Meanwhile, the federation was also targeted by the SL. Although able to infiltrate the union to some extent, staging armed strikes and attacking mining facilities, the SL was by no means able to gain control of it. Nevertheless, the SL's presence caused violence from both the left (there were clashes between the SL and nonsympathetic miners) and the right (the leader of the miners' federation was assassinated by the APRA- and military-linked paramilitary squad, the Rodrigo Franco Command). Finally, some critics felt that the government and the National Mining and Petroleum Company (Sociedad Nacional de Miner�a y Petr�leo--SNMP) found the SL infiltration of the mines a convenient excuse for declaring a state of emergency in the region.

Only 15 to 20 percent of the labor force was unionized in 1990, making that force a rather privileged sector of the working class. Underemployment was as high as 75 percent; and only 9 percent of Lima's economically active population was fully employed.

The prospects for the union movement in Peru in the early 1990s were dismal at best. On the one hand, the economic crisis made access to a job a luxury. Protest by organized labor was a last attempt at protecting salary levels that had deteriorated by over 50 percent in the 1985-90 period. On the other, the SL's drive to establish influence among organized labor presented a challenge to all the unions that wished to retain their independence.

In the event of an economic recovery and the adoption of a more realistic labor code that did not make access to a job a privilege for a small minority, organized labor might be able to enhance its status as the protector of workers rights rather than the proponent of political radicalism. Still, these developments also hinged on the defeat of the foremost proponent of radicalism, the SL--an unlikely scenario in the short term.

Peru

Peru - Students

Like the labor unions, the student movement has seen its rise and fall in Peru, and its fate was also inextricably linked to that of the SL. Compared with Peru's other social welfare indicators, Peru had a relatively high rate of literacy (80 percent), owing in large part to the strong emphasis that both Bela�nde regimes placed on education. The numbers of students enrolled in universities increased dramatically in the 1960s, and, consequently, so did their level of organization. Critics had justifiably contended that the emphasis on education was at the expense of other key social welfare expenditures, such as health.

Students had a strong tradition of political organization in Peru. For example, APRA began as a student and workers union. Student leaders, both of APRA and of the left, also played an important role in the protests against the military regime in the late 1970s. Congruent with the growth in relative strength of the Marxist left in politics was an increase in their presence in student organizations. In early 1991, there was a host of university student organizations, most allied with different factions of the left or with APRA. Some organizations were also allied with the SL or MRTA. Student supporters of the "new" right, such as the Liberty Movement, had also emerged, although they were by far in the minority. The increase in student organization had occurred in conjunction with the curbing of financing for universities and the shrinking of economic opportunities for university graduates, which had resulted in a radicalization of the university community in general. Although a few prestigious private universities continued to guarantee their students top degrees and professional opportunities, the quality of the education attained by large numbers of students at state universities was by no means universal and was often quite poor. Thus, many universities increasingly had become havens for frustration.

The extreme manifestation of this phenomenon was the birth and growth of the SL in the University of Huamanga (Universidad de Huamanga) in Ayacucho in the 1970s. Abim�el Guzm�n Reynoso, a professor at the university and eventually director of personnel, was the founder and leader of the SL. The SL virtually controlled the university for several years, and students were indoctrinated in the SL philosophy. The university trained students, mainly from the Ayacucho area, primarily in education; but a degree from Huamanga was considered inferior to the Lima universities, and students had few opportunities other than returning to their hometowns to teach. As jobs for graduates were few and far between, becoming an active militant in the SL provided an opportunity of sorts.

An analogous phenomenon occurred in most of the Lima universities in the 1980s. Poorly funded and staffed, universities had far more students than they could adequately train. Employment opportunities had virtually disappeared, and university graduates often ended up driving taxis. The oldest university in the Americas, the state-funded San Marcos University, had become the center of Peru's student radicalism. SL graffiti covered the walls; police raids on the university yielded large caches of weapons and ammunition, as well as arrests. Professors who openly sympathized with the SL were the norm. In 1989 student elections, members of the student organization that supported the SL won in first place and controlled facilities such as the cafeteria.

Like union members, university students often were confronted with a dire predicament. They were the focus of SL organizational efforts, and at the same time their economic opportunities had virtually disappeared. Peaceful organizational efforts to improve their position had little potential in the current context, yet violent efforts were inextricably linked to the SL. Radicalism was in theory an appealing alternative, but in reality the ultraviolent form in which it manifested itself in the SL was hardly an alternative. Unfortunately, finding a job was also less and less a realistic alternative.

Peru

Peru - News Media

In 1990 Peru had one of the freest and most varied presses in the world, with virtually no curbs on what was published. The best-established and largest circulating newspaper was the slightly conservative daily, El Comercio. Expreso, owned by former minister of economy and finance Manuel Ulloa, was also slightly to the right of center. A variety of left-leaning dailies included Cambio, El Diario de Marka, and La Rep�blica. Hoy was the pro-APRA daily. El Di�rio was a pro-SL newspaper that used to be published daily in Lima and circulated approximately 5,000 copies a day. The government closed it in late 1988, after the editor was accused of being a member of the SL, but it reappeared the next year as a weekly. A state-owned newspaper, El Peruano, published a daily listing of decrees and government proceedings. Oiga magazine was a right wing weekly, Caretas and S� were centrist weeklies. Quehacer was a bimonthly research publication sympathizing with the left.

Peru had a total of 140 state and privately owned television channels. Channel 4, the state-owned channel, provided relatively well-balanced news, as it had fierce competition from its private competitors. The popular weekly news program, "Panorama," which broadcast in-depth interviews with a wide range of intellectuals, politicians, and even guerrillas, was quite influential. The MRTA, for example, made its entrance into national politics when its takeover of Juanju� in San Mart�n Department was aired on Panorama.

Peru's media were in general varied, competitive, and highly informative, and options from all sides of the political spectrum were available. Peru's population was a highly informed one, with even the poorest people usually having access to television. In early 1991, when the intelligence police found a video of Abim�el Guzm�n Reynoso dancing in a drunken stupor, it was aired on national television. When in early 1991 President Fujimori passed Decree Law 171, the media played a major role in raising public awareness as to the impunity that it imparted onto the armed forces and the threat that it posed to investigative journalism in the emergency zones. The publicity was in part responsible for the repeal of the decree in Congress. Indeed, the extent to which freedom of the press continued to exist in Peru, despite the many other obstacles to democratic government, was an important and positive force for Peru's democracy.

Peru

Peru - POLITICAL TRENDS

Roots of the 1990-91 Crisis

There was no single explanation for the nature and severity of the crisis Peru faced in the early 1990s. The temptation to blame Garc�a and APRA was a strong one, given their dismal performance in government, but the crisis had much deeper roots. APRA inherited a nation beset with economic and social problems, but a political climate in which the consensus on the need for reform was unprecedented. The manner in which APRA governed resulted in an exacerbation of an existing breach between state and society. Consensus gave way to polarization and fragmentation of the party system, and economic policy fell prey to internal party politics, with disastrous results.

Peru

Peru - The Transition to Democracy

Like many other military establishments on the continent, the Peruvian military halted the civilian political process for a prolonged period of time (1968-80), attempted major structural economic change without a great deal of success, accumulated a large debt without public accountability, and then turned the political system back over to the same politicians it had previously ousted. The transition to democratic government, meanwhile, raised popular expectations that a fragile new democracy with severely constrained resources could hardly hope to meet.

The 1980 elections were won, ironically, by Fernando Bela�nde, whom the military had overthrown in 1968. His victory was no surprise, given that the elections were contested by a leaderless and divided APRA, recovering from the recent death of Haya de la Torre, and by a fragmented left that presented what political scientist Sandra Woy Hazelton described as a "cacophony" of candidates and parties. Although Bela�nde was a charismatic personality, he had spent the military years in exile, and was hopelessly out of touch with Peru's political realities in 1980. His government stuck stubbornly to a neoliberal, export-oriented economic model at a time when the world recession caused the prices of Peru's major export products to plummet. At the same time, the government fueled inflation through fiscal expenditures on major infrastructure projects, ignoring the better judgment of the president of the Central Reserve Bank (Banco Central de Reservas--BCR, also known as Central Bank). Popular expectations raised by the transition to democracy were soon frustrated.

Despite the SL's launching of activities in 1980 and its substantial presence in Ayacucho by 1982, Bela�nde refused to take the group seriously, dismissing them as narcoterrorists. When the government finally realized that the SL was a substantial security threat as a guerrilla and terrorist group, its reaction was too little, too late, and ultimately counterproductive. The government sent special counterinsurgency forces, the Sinchis, to the Ayacucho region, where they were given a free hand. The repressive nature of the military activities and the military's lack of understanding of the SL resulted in unwarranted repression against the local population. This, if anything, played into the SL's hands.

Natural disasters--floods and droughts--and economic decline and triple-digit inflation heightened the negative image of a government that was distant and detached from the population. This image was also exacerbated by Bela�nde's continuous insistence, amid economic crisis and the onset of guerrilla violence, that the solution to Peru's problems was the building of the Jungle Border Highway (la carretera marginal de la selva or la marginal), linking the Amazon region of the country to the coast. The severity of the economic crisis of the Bela�nde years and his government's poor public relations image opened the door for a major shift of the political spectrum to the left. By late 1983, Garc�a, as leader of the opposition in Congress, began to tap the increasing support for a radical solution to Peru's problems.

Peru

Peru - The Garc�a Government, 1985-90

By 1985 Garc�a and APRA were well-positioned to win the presidential elections. Garc�a was a charismatic orator who was convinced that he needed to "open up" APRA in order to win the nation's vote. He dropped all of APRA's sectarian symbols, such as the Aprista version of the Marseillaise and its six-pointed star, and replaced them with the popular song, "Mi Per�," and with slogans such as "my commitment is with all Peruvians." His attacks on neoliberal economics were directed primarily at foreign capital and the IMF, a convenient beating board because Peru was unlikely to get any capital inflow in the near future; he carefully avoided attacks on domestic capital. Thus, while cultivating the image of a radical among the poor, Garc�a also was perceived as the mal menor, or lesser evil, by the private sector, as opposed to the Marxist left. Finally, even conservatives recognized the need for reform in Peru by 1985, given the increasing presence of the SL. Garc�a defeated Alfonso Barrantes of the IU, taking 47.8 percent of the vote versus 22.2 percent for the IU. A run-off election (required if an absolute majority is not attained) was not held because Barrantes declined to run.

The first two years of the APRA government were a honeymoon of sorts. Garc�a enjoyed unprecedented popularity ratings of over 75 percent, owing in part to his populist personality and oratorical talents, and in part to the concertaci�n strategy the government pursued. It was highly successful as a short-term strategy for a severely depressed economy, but obviously had its limits as a long-term plan. The private sector, meanwhile, gave Garc�a and his concertaci�n strategy cautious support.

By mid-1987 it was clear that concertaci�n had run its course, and a change of emphasis was necessary. At the same time, Garc�a was also under pressure from the left and from some sectors within his own party to implement more radical structural change. In June he suffered a defeat within the party when his main rival, former prime minister Luis Alva Castro, was elected president of the Chamber of Deputies. Garc�a at this point opted for a radical measure that was intended to retake the political initiative from his rivals. In his annual independence day address on July 28, 1987, Garc�a announced the surprise nationalization of the nation's banks. The measure was designed with a small group of advisers in the two weeks prior to its announcement, and few members of the APRA party or government were consulted. For example, the octogenarian vice president of the republic, Luis Alberto S�nchez, learned of the measure just prior to Garc�a's announcement, and he was told by none other than former president Bela�nde. The measure in and of itself may not have been all that significant because only 20 percent of the nation's banks remained in private hands in 1987. However, the manner in which Garc�a presented it clearly indicated a change of political course. His rhetoric pitted the rich, lazy bankers against the poor, exploited people, and from that point on he began to speak of the "bad" capitalists. He launched a tirade of attacks on the domestic private sector, using precisely the kind of rhetoric he had avoided in the campaign and for the first two years of his presidency.

The private sector's fragile trust in Garc�a and the historically confrontational APRA was undermined. This was exacerbated by the manner in which APRA silently supported the measure, and those members of the party who spoke out against the measure were expelled. Foremost among these was the influential senator Jorge Torres Vallejo, who ironically was the person who launched Garc�a's candidacy as secretary general of APRA in 1983.

The measure marked the beginning of the end. Political polarization set in, and the government increasingly lost coherence. The then moribund right found a cause and a candidate for its renovation, and latched onto the protest movement against the measure that was launched by Mario Vargas Llosa and his Liberty Movement. The left had no real cause to support the measure or to ally with the highly sectarian APRA. The poor, who lacked savings accounts, were hardly likely to rally to Garc�a's cause. The private sector withdrew its plans for investment as economic policy-making fell prey to political infighting in APRA and to Garc�a's own erratic behavior. In September 1988, the time when an austerity package was announced, Garc�a went into hiding in the palace and did not appear for a period of over thirty days.

Although reserves had run out, the government continued to maintain unrealistic subsidies, such as the five-tier exchange rate, funded by a growing fiscal deficit, which fueled hyperinflation. This was exacerbated by the constant resource drain from inefficient state enterprises, whose bureaucracy increased markedly during the APRA government. The combination of hyperinflation and public sector debts that could not be paid resulted in a state that virtually ceased to function. Living standards dropped dramatically as real wages were eroded by inflation, and services for the public, such as public hospital staff, were curbed markedly. By the end of the APRA government, shortages of the most basic goods, such as water and electricity, were the norm. Economist Jeffrey D. Sachs, on a visit to Lima in June 1990, described the country as "slipping away from the rest of the world."

To make matters worse, a host of corruption scandals involving APRA became publicly evident at this point. The atmosphere of chaos and economic disorder, the virtual nonfunctioning of the state, and the perception of corruption in the highest ranks of government and law enforcement all served to discredit state institutions and political parties, particularly APRA.

Economic decline was accompanied by a dramatic surge in insurgent and criminal violence. In addition to violence from the SL and MRTA, there was a rise in death squads linked to the government and armed forces. These included the Rodrigo Franco Command. Deaths from political violence in the 1980s approached 20,000, and in 1990 alone there were 3,384, a figure greater than that from Lebanon's civil war that year. Peru also ranked as the country with the highest number of disappearances in the world. In the context of political violence and economic disorder, criminal violence also surged.

Peru

Peru - The 1990 Campaign and Elections

Although Alberto Fujimori was elected by a large popular margin, he had no organized or institutionalized base of support. There were countless theories as to why Fujimori was able to rise from virtual anonymity to the national presidency in the course of three months. More than anything else, the Fujimori tsunami, as it was called, was a rejection of all established political parties: the right, despite its refurbished image; the squabbling and hopelessly divided far left; and certainly the left-of-center APRA because of its disastrous performance in government. Fujimori was able to capture the traditional support base of APRA: small entrepreneurial groups and those sectors of the middle class for whom APRA was no longer an acceptable alternative, but for whom the conservative Fredemo was also unacceptable. In addition, Fujimori's success was attributed largely to a great deal of support at the grassroots level.

After serving as a UNA rector and host of a popular television program called "Concertando," Fujimori entered politics in 1989, running on a simple, if vague, platform of "Work, Honesty, and Technology." His appeal had several dimensions. First, his experience as an engineer, rather than a politician, and his lack of ties to any of the established parties clearly played into his favor. APRA's incoherent conduct of government had led to an economic crisis of unprecedented proportions; at the same time, the polarized political debate and the derogatory mudslinging that characterized the electoral campaign did not seem to offer any positive solutions. The right preached free-market ideology with a fervor and made little attempt to appeal to the poor. The left was hopelessly divided and unable to provide a credible alternative to the failure of "heterodox" economic policy. Thus, not only APRA was discredited, but so were all established politicians.

In addition, and key to his popular appeal, were Fujimori's nonelite origins as the son of Japanese immigrants. His Japanese ties also aroused some hopes, whether realistic or not, that in the event of his victory the Japanese would extend substantial amounts of aid to Peru. He capitalized on Vargas Llosa's lack of appeal to the poor by promising not to implement a painful "shock" economic adjustment program to end inflation, and with slogans like "un presidente como t�" ("a president like you"). The claim of this first-generation Japanese-Peruvian that he was just like the majority in a predominantly mestizo and native American nation seemed less than credible, and his vague promises of "gradually" ending hyperinflation seemed glibly unrealistic. Nevertheless, his message was much more palatable to an already severely impoverished population than Vargas Llosa's more realistic but bluntly phrased calls for a shock austerity program to end inflation. "El shock" had become a common term in the electoral campaign and among all sectors of society.

Fujimori's success was also enhanced by his rather eclectic political team, Cambio '90, which was extremely active in campaigning at the grassroots level. Cambio had an appeal at this level precisely because it was an unknown entity, and was not affiliated with the traditional political system.

In the first round of elections, Vargas Llosa attained 28.2 percent of the vote; Fujimori, 24.3 percent; the APRA, 19.6 percent; IU, 7.1 percent; and ASI, 4.1 percent. Null and blank votes were 14.4 percent of the total. It was then clear that the left and APRA would back Fujimori, if for no other reason than to defeat Vargas Llosa in the second round. Vargas Llosa was seen as a representative of the traditional, conservative elite, and thus was unacceptable for ideological reasons. In Luis Alva Castro's words to APRA: "Compa�eros (partners), our support for Fujimori is a given, but there is no need to make an institutional commitment." A similar stance was taken by the left.

The support of the left and APRA virtually guaranteed Fujimori's victory in the second round, but it by no means signified an organized or institutionalized support base, either inside or outside Congress, which presented a formidable obstacle for an already uncertain future for the Fujimori government. The electoral campaign, meanwhile, was waged in extremely negative and ad hominem terms, and took on both racial and class confrontational overtones. It became a struggle between the "rich whites" and the "poor Indians," exacerbating the existing polarization in the system. The political mudslinging and personal attacks, first by Fredemo against APRA and President Garc�a, and then between the Fujimori and Vargas Llosa teams, offended the average voter.

The conduct of the 1990 electoral campaign, in conjunction with the prolonged period of political polarization that preceded it, severely undermined faith in the established system and the political parties and leaders that were a part of it. This, more than anything else, played into the hands of Fujimori, and was responsible for his victory. In the second round, he attained 56.5 percent of the vote over 33.9 percent for Vargas Llosa on June 10, 1990.

The Fujimori government came to power without a coherent team of advisers, a program for governing, or any indication of who would hold the key positions in the government. Fujimori's advisers were from diverse sides of the political spectrum, and he made no clear choices among them, as they themselves admitted. At the same time, he made it clear that he would re-establish relations with the international financial community, and that he was not interested in a radical economic program. How he would reconcile those goals, in the context of hyperinflation, with his promise not to implement a shock-stabilization plan was the cause of a great deal of uncertainty.

The 1990 electoral results reflected a total dissatisfaction and lack of faith on the part of the populace in traditional politicians and parties. Fredemo's dogmatic and heavy-handed campaign was partially to blame for undermining that faith, as were a succession of weak or inept governments for the past several decades. Yet, in the short-term, the disastrous failure of APRA, the country's only well-institutionalized political party, was most directly to blame. The results of the 1990 elections merely demonstrated the exacerbation that occurred from 1985 to 1990 of a preexisting breach between state and society in Peru. The rejection of traditional parties did not necessarily reflect a rejection of the democratic system. Instead, it reflected an ongoing evolution of participation occurring outside the realm of traditional political institutions, as well as the increased importance of autonomous local groups and the informal economy.

The 1990 electoral results also indicated a crisis of representation. Political parties play a fundamental representative role in virtually all consolidated democracies; their utility in formulating and channeling demands in both directions--from society to state and state to society--is an irreplaceable one. In Peru, as in many developing countries, demands on the state for basic services had clearly outpaced its ability to respond. Thus, the role of parties in channeling those demands, and--through the party platform or doctrine--indicating their relative importance, was critical. How Fujimori would govern a fragmented and polarized political system without an institutionalized party base remained unclear at best.

Peru

Peru - The Fujimori Government

In 1990 Peru's political spectrum and party system were polarized to an unprecedented degree. In addition, the vote for Fujimori was to a large extent a vote against the shock stabilization plan that Vargas Llosa had proposed to implement. After less than a month in government, however, Fujimori was convinced--both by domestic advisers and prominent members in the international financial community--that he had to implement an orthodox shock program to stabilize inflation and generate enough revenue so that the government could operate. During his visits to the United States and Japan in July 1990, it was made very clear to Fujimori that unless Peru adopted a relatively orthodox economic strategy and stabilized hyperinflation, there would be no possibility of Peru's reentry into the international financial community, and therefore no international aid. At this point, Fujimori opted for an orthodox approach and appointed Juan Carlos Hurtado Miller as minister of economy and prime minister. Later that month, many of Fujimori's original advisers, who were heterodox economists, left the Cambio team. Thus, on August 8, 1990, Fujimori implemented precisely the program that he had campaigned against.

The shock program was more extreme than even the most orthodox IMF economist was recommending at the time. Plans for liberalization of the trading system and for privatization of several state industries were made for the near future. Overnight, Lima became a city which had, in the words of several observers, "Bangladesh salaries with Tokyo prices."

Despite widespread fears that the measures would cause popular unrest, reaction was surprisingly calm for several reasons. First of all, the measures were so extreme that they made day-to-day economic survival the primary concern of the majority of the population, including the middle class. Taking time to protest was an unaffordable luxury. Second, street protest and violence were increasingly associated with insurrectionary groups and political violence, with which the average Peruvian had no desire to be associated. Third, the benefits from ending hyperinflation and recovering some sort of economic stability were immediately evident to Peruvians at all levels, even the very poor. Even several months after the shock, the most popular man in Peru was the architect of the program, Hurtado Miller. Although Fujimori's popularity suffered a decline after his first few months in office, it was not necessarily a result of the economic program. Finally, and perhaps most importantly, most people voted for Fujimori not only because of his vague promises, but also because of the perception that, unlike Vargas Llosa, he was much more a man of the people. Thus, his implementing an "antipopular" economic program was far more acceptable politically than Vargas Llosa's doing virtually the same thing.

Prospects for the Fujimori Government

In some ways, these trends signified positive prospects for the Fujimori government. The degree of consensus on the economic approach was remarkable for a country as polarized both ideologically and politically as Peru. Fujimori's original cabinet was an eclectic and pragmatic one, which included members of virtually all political camps. Despite this diversity, a consensus eventually emerged.

Yet, there were some extremely worrisome trends as well. In addition to the economic shock program, the government promised a social emergency program to protect the poorest by providing temporary food aid and employment. However, no such program materialized over a year into the government. Although this was explained in part by resource constraints, it was also explained, in large part, by lack of political will, as no one person had any bureaucratic responsibility for the needs of the poor.

In other countries implementing shock economic programs, temporary measures to compensate the poor have played important social welfare and political roles in making economic reform more acceptable and viable. In addition, they have played an important role in providing foreign donors with a single bureaucratic entity through which to channel necessary aid. The lack of such a program on any significant scale in Peru was unfortunate, as socioeconomic indicators had already deteriorated markedly prior to the adjustment program, and in areas where the threat of increasing insurrectionary violence was a realistic one.

Despite the new political dynamics, the tradition of centralized and authoritarian presidential leadership remained intact. Fujimori had a strong tendency to attempt to control his ministers and to appoint loyalists. Some of the most talented and independent-minded ministers left the cabinet after a few months because Fujimori undermined their authority. These included Carlos Amat y Le�n y Ch�vez, the minister of agriculture; Gloria Helfer Palacios, the minister of education; Carlos Vidal Layseca, the minister of public health; and even Prime Minister Hurtado himself in March 1991. After Hurtado's resignation, Fujimori separated the positions of prime minister and economics minister, presumably so that he could have more relative control than he had with the popular Hurtado. Also telling was Fujimori's insistence on the appointment of Jorge Ch�vez Alvarez, a young and relatively inexperienced doctoral student, as president of the Central Bank, despite the misgivings of virtually all respected economists. Ch�vez was seen as a Fujimori loyalist through whom the president could manipulate and control the Central Bank.

In addition, Fujimori's need to make an "unholy" alliance with APRA in Congress to get measures passed acted as a barrier to the reform of the state sector. APRA had been the only political force to back the Ch�vez appointment, and it was widely perceived that Fujimori would have a political price to pay for that backing in the future. Indicative of the price was a debate within the Ministry of Education, in which Fujimori supported APRA against his own minister, Gloria Helfer. She was trying to trim the size of the ministry, which had grown to unrealistic proportions during the APRA government owing to its filling of posts for party reasons. The row resulted in the resignation of Helfer and a stalling of the reform of the public education sector.

The age-old tradition of centralism also prevailed. For financial reasons and lack of political will, the regionalization process was stalled. Under existing conditions, regional governments were little more than politicized bureaucracies.

Finally, and most worrisome, was the resurgence of another tradition in Peru--government reliance on the military for power. Fujimori lacked any institutionalized base and had cultivated strong ties with the military by granting it what it wished, as demonstrated by his attempt to legalize its impunity through Decree Law 171.

There are many plausible explanations for the autogolpe. The most significant one, which has been noted here, was Fujimori's lack of organized or party-based support, resulting in his increasing reliance on the armed forces and on rule by decree. By early 1992, APRA stopped supporting Fujimori and coalesced the opposition in Congress, somewhat ironically, under the leadership targeted by government repression after the coup, indicative of the extent to which the government felt threatened by APRA opposition. In March there had been a politically damaging scandal among Fujimori's close circle of advisors, in which his wife publicly accused his brother, his closest advisor, of misuse of foreign aid donations. Another of Fujimori's close advisors, Vladimiro Montesinos Torres, the de facto head of the National Intelligence Service (Servicio de Inteligencia Nacional--SIN), had been pressuring the president for some time to free the counterinsurgency struggle from judicial interference. This coincided with a major SL assault on the city of Lima. At the same time, relations with the United States were at an all-time low owing to disagreements over counternarcotics strategy, possibly leading Fujimori to conclude that there was not all that much to lose from jeopardizing relations with the United States.

There was the possibility that Fujimori would abide by the timetable that he set out and reinstate the parliament one year later. Yet, the undermining of the constitutional system had farreaching costs. First, democratic development is not attained by rescinding the constitution and the institutions of government whenever a crisis is perceived. Second, Fujimori had been able to pass virtually all the laws pertaining to his economic program by the decree powers awarded to him by the Congress; continuing the economic program was not the reason for its closing. If anything, the program was seriously jeopardized by the international isolation that the coup precipitated, owing to the critical role that international financial support played. Third, the elimination of important constitutional rights, such as habeas corpus, for over a year was likely to result in a worsening of Peru's already poor human rights record. The coup also played into the SL's strategy of provoking a coup in order to polarize society into military and nonmilitary camps. Finally, a yes or no plebiscite is a tool that has been used to establish popular support by a number of dictators, including Benito Mussolini and Ferdinand Marcos. Given short-term popular support for almost any kind of drastic solution to Peru's many problems, there was a very high risk that Fujimori and the military would use the plebiscite as a tool to justify further undermining Peru's constitutional system.

Peru was clearly in a critical situation, where extreme economic deterioration and spiraling political violence had to be reversed as a prerequisite to democratic consolidation. Neither was a simple process, and there was no guarantee that Peru's fragile institutions would survive the challenge; they were jeopardized severely by the measures taken on April 5, 1992. In the short term, in addition to the rapid restoration of constitutional democracy, an important first step would be a more visible and tangible commitment to the poorest sectors, which were suffering the most from the economic program, had the smallest margin for deterioration in their living standards, and were the primary focus of insurgent groups as well. The outbreak of a cholera epidemic in 1991 was a prime example of the extent to which social welfare infrastructure and other needs of the poor had been sorely neglected for several years. Otherwise, despite all good intentions on the economic front, the social peace necessary to reestablish and consolidate democratic government would be unattainable.

Peru

Peru - FOREIGN RELATIONS

The emergence of highly nationalistic forces in Peru's political system during the 1960s was accompanied by a marked shift in the nation's approach to foreign relations. A desire to alter Peru's traditionally passive role in foreign affairs, which had led to what was perceived as inordinate influence by foreign countries--and particularly the United States--in the political and economic life of the nation, became a central objective of the Velasco Alvarado regime. During the 1970s, Peru's military government sought an independent, nonaligned course in its foreign relations that paralleled the mixed socioeconomic policies of its domestic reform program. Diplomatic dealings and foreign trade were thus diversified; official contacts with the nations of the communist world, Western Europe, and Asia were significantly expanded during the decade, while the United States' official presence receded from its once predominant position. Multilateral relations, particularly with Latin American neighbors that shared economic and political interests common to many Third World nations, also assumed a new importance.

Peru's foreign policy initiatives were undertaken in part as an effort to gain international support for the military government's experiment in "revolution from above." The initial success of many programs of the military government brought it considerable international prestige and thus, during the early 1970s, Peru became a leading voice for Third World nations. As the fortunes of the Peruvian experiment fell during the late 1970s, however, its international profile receded markedly. The Bela�nde government deemphasized further the nonaligned stance of the military government while working toward closer relationships with the United States and the nations of Latin America.

Foreign Relations Under Garc�a

Traditionally, Peru was an active and initiating member of regional multilateral organizations, such as the Andean Pact. Yet, the nation's economic crisis and Garc�a's loss of prestige, both within and outside Peru, forced the country to turn inward and abandon its high-profile stance. Peru's stance on the international front was influenced to a great extent by the rise and fall of Garc�a's anti-imperialist strategy. His antiimperialist and anti-IMF rhetoric, as well as his unilateral limitation of debt payments, placed a major strain on relations with the international financial community and the United States in particular.

Under Bela�nde, a de facto moratorium on debt service already had existed. By 1985 it was clear that no new capital was headed in Peru's direction, and that the country could not afford to pay its debt. Garc�a took an openly confrontational approach, with the hope that the rest of Latin America would follow. At the time, there were speculations that the threat posed by Garc�a was one reason the Ronald Reagan administration (1981-89) presented the Baker debt-reduction plan in October 1985.

Although Garc�a's debt policy limited payments to 10 percent of export earnings, in reality the government paid approximately 20 percent for the first few years, but then stopped making any payments at all. Garc�a's insistence on maintaining a confrontational stance, even after its political utility was exhausted, was counterproductive. On several occasions, accords in principle with the IMF were prepared with representatives of the APRA government and the IMF, and then cancelled at the last minute by Garc�a. Garc�a's stance initially had some appeal among Third World debtor countries, and a few even followed his example. As the limits to Peru's economic strategy became evident both at home and abroad, however, his stubborn adherence to the policy became the subject of ridicule rather than respect. Peru was declared ineligible for IMF funds in August 1986, and was threatened with expulsion from the organization in October 1989.

Garc�a also made heightening Peru's visibility in the Nonaligned Movement and in the Socialist International a priority. Ties were expanded with a number of Third World socialist nations, including Angola, Mozambique, and Zimbabwe; and Garc�a took a staunchly pro-Sandinista position in the Central American conflict. Improving Peru's relations with its neighbors, particularly Ecuador and Chile, was also a priority early on. Although some productive discussions were held with Ecuador, including a historic visit by Peru's minister of finance to Quito in October 1985, progress was limited by competition with both the Ecuadorian and Chilean military establishments. Garc�a's attempts to curb military expenditures were not reciprocated by Chile, for example.

As the economic crisis in Peru deepened, meanwhile, Garc�a took a lower profile stance on the foreign policy front. Relations with the United States remained remarkably good despite Garc�a's stances on debt and on Central America. This was in part owing to Washington's desire to maintain good bilateral relations because of the threat of instability caused by the SL. Thus, foreign aid flows were maintained despite Peru's violation of the Brooke Alexander Amendment, which makes a country ineligible for United States aid if it is over a year late in repaying military assistance. Garc�a's willingness to collaborate, at least rhetorically, on the drug issue, in sharp contrast to his stance on debt, helped ameliorate relations. Finally, relations were maintained owing to a good working relationship between United States ambassador Alexander Watson and President Garc�a.

Peru's relations with its neighbors were strained also by the extent of the economic crisis and the cholera epidemic. In late 1989, over 6,000 Peruvians crossed the border to Chile in order to buy bread, which was scarce and expensive in Peru. Chile's dictator Augusto Pinochet Ugarte (1973-90), when campaigning prior to the 1988 plebiscite, warned of the dangers of populist democracy by pointing out neighboring Peru. Contraband trade along the Chilean and Ecuadorian borders at times has been a contentious issue. Another concern were the thousands of Peruvians emigrating to neighboring countries seeking employment. The fear of the spread of subversion over neighboring borders also worried Peru's neighbors, a concern heightened by events such as the SL's assassination of a Peruvian military attach� in La Paz, and by the MRTA's support of the 19th of April Movement (Movimiento 19 de Abril--M-19), a Colombian guerrilla group.

Foreign Relations Under Fujimori

Fujimori set out to repair Peru's foreign relations, particularly with its creditors. He campaigned on, and was committed to, a strategy of "reinsertion" into the international financial community. This commitment forced him to change his adherence to "gradualist" economics and to open dialogue with the major multilateral institutions.

Peru's foreign relations situation changed dramatically with the April 5 self-coup. The international community's reaction was appropriately negative. Most international financial organizations delayed planned or projected loans, and the United States government suspended all aid other than humanitarian assistance. Germany and Spain also suspended aid to Peru. Venezuela broke off diplomatic relations, and Argentina withdrew its ambassador. The coup threatened the entire economic recovery strategy of reinsertion. In addition, the withdrawal of aid by key members of Peru's support group made the process of clearing arrears with the IMF virtually impossible. Yet, despite international condemnation, Fujimori refused to rescind the suspension of constitutional government, and the armed forces reasserted their support for the measures.

Even before the coup, relations with the United States were strained, because they were dominated by the drug issue and Fujimori's reluctance to sign an accord that would increase United States and Peruvian military efforts in eradicating coca fields. Although Fujimori eventually signed the accord in May 1991 in order to get desperately needed aid, the disagreements did little to enhance bilateral relations. The Peruvians saw drugs as primarily a United States problem, and the least of their concerns, given the economic crisis, the SL, and the outbreak of cholera.

The cholera outbreak at first resulted in neighboring countries' banning Peruvian food imports, further straining relations. Even after the ban was lifted for certain products, fear of the spread of cholera was confirmed by cases reported in Colombia, Ecuador, Chile, and Brazil.

By the early 1990s, economic trends in Latin America were moving increasingly toward free-trade agreements with the United States and regional market integration, such as the Southern Cone Common Market (Mercado Com�n del Sur-- Mercosur). Although the Andean Pact agreed to form a common market in late 1990, Peru's role, owing to the extent and nature of its crisis, remained marginal, at least in the short term. Fujimori was so overwhelmed with domestic problems early into his government, moreover, that he was unable to attend the Group of Eight meeting in late 1990.

Although Peru could have been eligible for special drugrelated assistance and trade arrangements with the United States under the Andean Initiative, Peruvian-United States relations were hardly smooth on the drug front during Fujimori's first year in office. Peru's eligibility for debt reduction and grants for investment-related reforms under the George H.W. Bush administration's Enterprise for the Americas Initiative, meanwhile, were restricted by its arrears with multilateral credit agencies and private banks.

On the debt front, relations with international institutions were improving, and after six months of negotiations, Peru was able to obtain the US$800-million bridge loan required to re-establish its borrowing eligibility from the IMF. Yet, Peru still had to pay US$600 million to international creditors. It seemed that for the foreseeable future, any credit inflows would merely be recycled to pay existing debts and arrears. Prior to the coup of April 5, 1992, however, almost all of the US$1.3 billion necessary to clear arrears with the IMF had been attained.

Peru had established a strong military relationship with the Soviets and Eastern Europe during the Velasco years, and was the Soviets' largest military client on the continent in the 1970s. Owing to a reliance on Soviet military equipment, this relationship has continued, although Peru has diversified its source of supply of weapons to countries ranging from France to North Korea. In addition, like its relationship with Cuba, Peru's relationship with the Soviets is certain to diminish in importance as both countries turn inward to deal with domestic crises and economic rather than strategic issues dominate the agenda. Reflecting this change is a new importance placed on relations with the United States and also with Japan, largely because of Fujimori's heritage and the emphasis that he himself placed on the Japanese role during the electoral campaign. More than anything else, Peru's foreign relations were expected to be dominated by the nation's need for foreign aid, capital, and credit, all of which hinged on the republic's solving its internal economic problems, cooperating with the United States on the drug issue, and dealing with the challenge from insurgent groups. Additionally, most of the international community remained unwilling to provide credit or aid until democratic government was restored.

Peru

Peru - Bibliography

Alexander, Robert, ed. Aprismo: The Ideas and Doctrines of
     V�ctor Ra�l Haya de la Torre. Kent: Kent State University
     Press, 1973.

Andrien, Kenneth J. Crisis and Decline: The Viceroyalty of Peru
     in the Seventeenth Century. Albuquerque: University of
     New Mexico Press, 1985.

Anna, Timothy E. The Fall of the Royal Government in Peru.
     Lincoln: University of Nebraska Press, 1979.

Arz�ns de Ors�a y Vela, Bartolom�. Tales of Potos�. (Ed.,
     R.C. Padden.) Providence: Brown University Press, 1975.

Bakewell, Peter. Silver and Entrepreneurship in Seventeenth-
     Century Potos�: The Life and Times of Antonio L�pez de
     Quiroga. Albuquerque: University of New Mexico Press,
     1988.

Becker, David G. The New Bourgeoisie and the Limits of
     Dependency: Mining, Class, and Power in "Revolutionary"
     Peru. Princeton: Princeton University Press, 1983.

Bertram, Geoffrey. "Peru 1930-1962." Pages 385-450 in Leslie
     Bethell (ed.), The Cambridge History of Latin
     America, 8. Cambridge: Cambridge University Press, 1991.

Bethell, Leslie (ed.). The Cambridge History of Latin
     America, 1. Cambridge: Cambridge University Press, 1984.

------. The Cambridge History of Latin America, 5.
     Cambridge: Cambridge University Press, 1986.

------. The Cambridge History of Latin America, 8.
     Cambridge: Cambridge University Press, 1992.

Blanchard, Peter. The Origins of the Peruvian Labor Movement,
     1883-1919. Pittsburgh: University of Pittsburgh Press,
     1982.

Blondet M., Cecilia. Las mujeres y el poder: Una historia de
     Villa El Salvador. Lima: Instituto de Estudios Peruanos,
     1991.

Bonilla, Heraclio. "Peru and Bolivia." Pages 539-582 in Leslie
     Bethell (ed.), The Cambridge History of Latin
     America, 1. Cambridge: Cambridge University Press, 1984.

Booth, David, and Bernardo Sorj (eds.). Military Reformism and
     Social Classes: The Peruvian Experience, 1968-80. New
     York: St. Martin's Press, 1983.

Bourque, Susan C., and Kay B. Warren. Women of the Andes:
     Patriarchy and Social Change in Two Peruvian Towns. Ann
     Arbor: University of Michigan Press, 1981.

Bowser, Frederick P. The African Slave in Colonial Peru.
     Stanford: Stanford University Press, 1974.

Brown, Kendall W. Bourbons and Brandy: Imperial Reform in
     Eighteenth-Century Arequipa. Albuquerque: University of
     New Mexico Press, 1986.

Burga, Manuel, and Alberto Flores Galindo. Apogeo y cr�sis de
     la Rep�blica aristocr�tica. (3d ed.) Lima: Ediciones
     Rikchay Peru, 1984.

Burkholder, Mark A. Politics of a Colonial Career:
     Jos� Baqu�jano and the Audiencia of Lima, 2d ed.
     Wilmington, Delaware: Scholarly Resources Books, 1990.

Burkholder, Mark A., and Lyman L. Johnson. Colonial Latin
     America. New York: Oxford University Press, 1990.

Cameron, Ian. The Kingdom of the Sun God: A History of the
     Andes and Their People. New York: Facts on File, 1990.

Campbell, Leon G. The Military and Society in Colonial Peru,
     1750-1810. Philadelphia: American Philosophical Society,
     1978.

Chavarr�a, Jes�s. Jos� Carlos Mari�tegui and the Rise of Modern
     Peru, 1890-1930. Albuquerque: University of New Mexico
     Press, 1979.

Clayton, Larry. Grace: W.R. Grace, the Formative Years, 1850-
     1930. Ottawa, Illinois: Jameson Books, 1985.

Cole, Jeffery A. Potos� Mita, 1573-1700: Compulsory Indian
     Labor in the Andes. Stanford: Stanford University Press,
     1985.

Collier, David. Squatters and Oligarchs: Authoritarian Rule and
     Policy Change in Peru. Baltimore: Johns Hopkins
     University Press, 1976.

Contreras, Carlos. Mineros y campesinos en los Andes: Mercado
     laboral y economic compesina en la Sierra Central, siglo
     XIX. Lima: Instituto de Estudios Peruanos, 1988.

Cook, Noble David. Demographic Collapse: Indian Peru, 1520-
     1620. Cambridge: Cambridge University Press, 1981.

Cotler, Julio. "Peru since 1960." Pages 451-508 in Leslie Bethell
     (ed.), The Cambridge History of Latin America, 8.
     Cambridge: Cambridge University Press, 1991.

Cushner, Nicholas P. Lords of the Land: Sugar, Wine, and Jesuit
     Estates of Coastal Peru, 1600-1767. Albany: State
     University of New York Press, 1980.

Davies, Keith A. Landowners in Colonial Peru. Austin:
     University of Texas Press, 1984.

Degregori, Carlos Iv�n. El nacimiento de Sendero Luminoso.
     Lima: Instituto de Estudios Peruanos, 1990.

De la Vega, Garcilasco. Royal Commentaries of the Incas and
     General History of Peru. Austin: University of Texas
     Press, 1987.

Derpich, Wilma, Jos� Luis Huiza, and Cecilia Israel. Lima a�os
     30: Salarios y costo de vida de la clase trabajadora.
     Lima: Fundaci�n Friedrich Ebert, 1985.

De Soto, Hernando. The Other Path: The Invisible Revolution in
     the Third World. New York: Harper and Row, 1990.

Deustua, Jos�. La miner�a peruana y la iniciaci�n de la
     Rep�blica, 1820-1840. Lima: Instituto de Estudios
     Peruanos, 1986.

Deustua, Jos�, and Jos� Luis R�nique. Intelectuales,
     indigenismo y descentralismo en el Per�. Cusco:
     "Bartolom� de las Casas," 1984.

DeWind, Josh. Peasants Become Miners: The Evolution of
     Industrial Mining Systems in Peru, 1902-1974. New York:
     Garland, 1987.

Dietz, Henry A. Poverty and Problem-Solving under Military
     Rule: The Urban Poor in Lima, Peru. Austin: University of
     Texas Press, 1980.

Dobyns, Henry F., and Paul L. Doughty. Peru: A Cultural
     History. New York: Oxford University Press, 1976.

Dore, Elizabeth. The Peruvian Mining Industry: Growth,
     Stagnation, and Crisis. Boulder, Colorado: Westview
     Press, 1988.

Drake, Paul. The Money Doctor in the Andes: The Kemmerer
     Missions, 1923-1933. Durham: Duke University Press, 1989.

Duviols, Pierre. La lutte contre les religions autochtones dans
     le P�rou colonial: "L'extirpation de l'idolatrie entre 1532 et
     1660". Lima: Instituto Franc�s de Estudios Andinos, 1971.

Economic Intelligence Unit. Country Report: Peru, Boliva
     [London], No. 1, 1992.

------. Country Report: Peru, Bolivia, No. 2, 1992.

Eckstein, Susan. "The Impact of Revolution on Social Welfare in
     Latin America." Pages 280-306 in Jack Goldstone (ed.),
     Revolutions: Theoretical, Comparative, and Historical
     Studies. New York: Harcourt Brace Jovanovich, 1986.

El Comercio [Lima], April 12, 1992, F20.

Espinoza Soriano, Waldemar. La destrucci�n del imperio de los
     Incas: La rivalidad pol�tica y se�orial de los Curacazgos
     andinos. Lima: Retablo de Papel Ediciones, 1977.

------. Los incas: Econom�a, sociedad y estado en la era del
     Tahuantinsuyo. La Victoria, Peru: Amaru Editores, 1987.

Figueroa, Adolfo. Capitalist Development and the Peasant
     Economy of Peru. Cambridge [Cambrigeshire]: Cambridge
     University Press, 1984.

Fisher, John R. Government and Society in Colonial Peru: The
     Intendant System, 1784-1814. London, 1970.

------. Silver Mines and Silver Miners in Colonial Peru, 1776-
     1824. Liverpool: University of Liverpool, 1977.

Fitzgerald, Edmund V.K. The Political Economy of Peru, 1956-
     1978: Economic Development and the Restructuring of
     Capital. Cambridge: Cambridge University Press, 1979.

Flores Galindo, Alberto. Buscando un inca: Identidad y utopia
     en los Andes. Lima: Instituto de Apoyo Agrario, 1987.

Flores Galindo, Alberto (ed.). Independencia y revoluci�n,
     1780-1840. (2 vols.) Lima: Instituto Nacional de Cultura,
     1987.

------. T�pac Amaru II-1780: Sociedad colonial y sublevaciones
     populares. Lima: Retablo de Papel Ediciones, 1976.

Gardiner, C. Harvey. The Japanese and Peru, 1873-1973.
     Albuquerque: University of New Mexico Press, 1975.

Gilbert, Dennis. La oligarqu�a peruana: Historia de tres
     familias. Lima: Editorial Horizonte, 1982.

Glave, Luis Miguel. Trajinantes-caminos ind�genos en la
     sociedad colonial siglos XVI-XVII. Lima: Instituto de
     Apoyo Agrario, 1989.

Glave Testino, Luis Miguel, and Mar�a Isabel Remy. Estructura
     agraria y vida rural en una regi�n andina: Ollantaytambo entre
     los siglos XVI-XIX. Cusco: Centro de Estudios Rurales
     Andinos "Bartolom� de las Casas," 1983.

Goldstone, Jack (ed.). Revolutions: Theoretical, Comparative,
     and Historical Studies. New York: Harcourt Brace
     Jovanovich, 1986.

Gonzales, Michael J. Plantation Agriculture and Social Control
     in Northern Peru, 1875-1933. Austin: University of Texas
     Press, 1985.

Gootenberg, Paul E. Between Silver and Guano: Commercial Policy
     and the State in Postindependence Peru. Princeton:
     Princeton University Press, 1989.

Gorman, Stephen M. (ed.). Post-Revolutionary Peru: The Politics
     of Transformation (Westview Special Studies on Latin
     America and the Caribbean.). Boulder, Colorado: Westview
     Press, 1982.

Gorriti Ellenbogen, Gustavo. Sendero: Historia de la guerra
     milenaria en el Per�, 1. Lima: Editorial Apoyo, 1990.

Haya de la Torre, V�ctor Ra�l. Obras completas. (7 vols.)
     Lima: Editorial Mejia Baca, 1976-77.

Hemming, John. The Conquest of the Incas. New York:
     Harcourt Brace Jovanovich, 1970.

Huam�n Poma de Ayala, Felipe. Letter to a King: A Peruvian
     Chief's Account of Life under the Incas and under Spanish
     Rule. New York: Dutton, 1978.

Huayhuaca, Jos� Carlos. Mart�n Chambi: Fot�grafo, Cusco 1920-
     1950. Lima: Banco de Lima, 1989.

Jacobsen, Nils P. Mirages of Transition: The Peruvian
     Altiplano, 1780-1930. Berkeley: University of California
     Press, 1993.

Jacobsen, Nils P., and Hans-J�rgen Puhle (eds.). The Economies
     of Mexico and Peru during the Late Colonial Period, 1760-
     1810. Berlin: Colloquium Verlag, 1986.

Juan, Jorge, and Antonio de Ulloa. Discourse and Political
     Reflections on the Kingdoms of Peru. Norman: University
     of Oklahoma Press, 1978.

K�psoli Escudero, Wilfredo. Los movimientos campesinos en el
     Per� 1879-1965. Lima: Delva Editores, 1977.

Keith, Robert G. Conquest and Agrarian Change: The Emergence of
     the Hacienda System on the Peruvian Coast. Cambridge:
     Harvard University Press, 1976.

Kendall, Ann. Everyday Life of the Incas. New York: Dorset
     Press, 1989.

Klaiber, Jeffrey L. The Catholic Church in Peru, 1821-1985: A
     Social History. Washington: Catholic University of
     America Press, 1992.

------. Religion and Revolution in Peru, 1824-1976. Notre
     Dame: University of Notre Dame Press, 1977.

Klar�n, Peter F. "The Indian Question in Latin America: Peru's
     Great Divide." The Wilson Quarterly 15, No. 3,
     Summer, 1990, 23-32.

------. Modernization, Dislocation, and Aprismo: Origins of the
     Peruvian Aprista Party, 1870-1930. Austin: University of
     Texas Press, 1973.

------. "Origins of Modern Peru, 1850-1930." Pages 587-640 in
     Leslie Bethell (ed.), Cambridge History of Latin
     America, 5. Cambridge: Cambridge University Press, 1986.

Kristal, Efrain. The Andes Viewed from the City: Literary and
     Political Discourse on the Indian in Peru, 1848-1930. New
     York: Peter Lang, 1987.

Kuczynski, Pedro-Pablo. Peruvian Democracy under Economic
     Stress: An Account of the Bela�nde Administration, 1963-
     1968. Princeton: Princeton University Press, 1977.

Laite, Julian. Industrial Development and Migrant Labour in
     Latin America. Austin: University of Texas Press, 1981.

Lee, Rensselaer W. The White Labyrinth: Cocaine and Political
     Power. New Brunswick, New Jersey: Transaction Books,
     1989.

Lockhart, James. The Men of Cajamarca: A Social and
     Biographical Study of the First Conquerors of Peru.
     (Latin American Monographs, No. 27.) Austin: University of
     Texas Press, 1972.

------. Spanish Peru, 1532-1566: A Colonial Society.
     Madison: University of Wisconsin Press, 1968.

Loveman, Brian, and Thomas M. Davies, Jr. (eds.). The Politics
     of Antipolitics: The Military in Latin America. (2d ed.)
     University of Nebraska Press, 1989.

Lumbreras, Luis Guillermo, and Carlos Aran�bar (eds.). Nueva
     historia general del Per�: Un compendio. Lima: Mosca Azul
     Editores, 1980.

Macera, Pablo. Trabajos de historia: Econom�a y sociedad.
     Lima: Instituto Nacional de Cultura, 1977.

Mallon, Florencia E. The Defense of Community in Peru's Central
     Highlands: Peasant Struggle and Capitalist Transition, 1860-
     1940. Princeton: Princeton University Press, 1983.

Manrique, Nelson. Campesinado y naci�n: Las guerillas ind�genas
     en la guerra con Chile. Lima: Centro de Investigaci�n y
     Capacitaci�n/Editora Ital Per�, 1981.

------. Mercado interno y regi�n: La sierra central, 1820-
     1930. Lima: Centro de Estudios y Promoci�n de Desarrollo,
     1987.

------. Yawar Mayu: Sociedades terratenientes serranas, 1879-
     1910. Lima: Institut fran�ais d'�tudes andines, Cento de
     Investigaci�n y Capacitaci�n, 1988.

Mari�tegui, Jos� Carlos. Seven Interpretive Essays on Peruvian
     Reality. Austin: University of Texas Press, 1971.

Masterson, Daniel M. Militarism and Politics in Latin America:
     Peru from S�nchez Cerro to Sendero Luminoso. New York:
     Greenwood Press, 1991.

Mathew, W.M. The House of Gibbs and the Peruvian Guano
     Monopoly. London: Royal Historical Society, 1981.

Matos Mar, Jos�. Un desborde popular: El nuevo rostro del Per�
     en la d�cada de 1980. Lima: Instituto de Estudios
     Peruanos, 1984.

McClintock, Cynthia. Peasant Cooperatives and Political Change
     in Peru. Princeton: Princeton University Press, 1981.

------. "Why Peasants Rebel: The Case of Peru's Sendero Luminoso."
     World Politics 37, No. 1, October 1984, 48-84.

McClintock, Cynthia, and Abraham Lowenthal (eds.). The Peruvian
     Experiment Reconsidered. (2d ed.) Princeton: Princeton
     University Press, 1983.

Mej�a Baca, Juan (ed.). Historia del Per�. (12 vols.)
     Lima: Editorial Mej�a Baca, 1980.

Miller, Roy, (ed.). Region and Class in Modern Peruvian
     History. Liverpool: Institute of Latin American Studies,
     University of Liverpool, 1987.

M�rner, Magnus. The Andean Past: Land, Societies,
     Conflicts. New York: Columbia University Press, 1985.

Murra, John V. "Andean Societies Before 1532." Pages 59-90 in
     Leslie Bethell (ed.), The Cambridge History of Latin
     America, 1. Cambridge: Cambridge University Press, 1984.

------. Research in Economic Anthropology: The Economic
     Organization of the Inka State. Supplement I. Greenwich,
     Connecticut: JAI Press, 1980.

North, Liisa. The Peruvian Revolution and the Officers in
     Power, 1967-1976. Montreal: Centre for Developing-Area
     Studies, McGill University, 1981.

O'Donnell, Guillermo. Modernization and Bureaucratic
     Authoritarianism: Studies in South American Politics.
     Berkeley, California: Institute of International Studies,
     University of California, 1973.

O'Phelan Godoy, Scarlett. Rebellions and Revolts in Eighteenth-
     Century Peru and Upper Peru. Colongne: Bohlau, 1985.

Palmer, David Scott. "The Origins and Evolution of Sendero
     Luminoso." Comparative Politics 18, No. 2, January
     1986, 127-146.

------. Peru: The Authoritarian Tradition. New York:
     Praeger, 1980.

Pastor, Manuel, Jr., and Carol Wise. "Peruvian Economic Policy in
     the 1980s: From Orthodoxy to Heterodoxy and Back," Latin
     American Research Review, 27, No. 2, 1992, 83-117.

Pease, Franklin, G.Y. Del Tawantinsuyu � la historia del
     Per�. Lima: Fondo Editorial, 1989.

Peru. Instituto Nacional Estad�stica. Poblaci�n total proyecta
     da al 30 de junio de 1990. Lima: 1989.

Pike, Frederick B. The Politics of the Miraculous in Peru: Haya
     de la Torre and the Spiritualist Tradition. Lincoln:
     University of Nebraska Press, 1986.

------. The United States and the Andean Republics: Peru,
     Bolivia, and Ecuador. Cambridge: Harvard University
     Press, 1977.

Preeg, Ernest H. The Evolution of a Revolution: Peru and Its
     Relations with the United States, 1968-1980. Washington:
     NPA Committee on Changing International Realities, 1981.

Prescott, William H. History of the Conquest of Peru. New
     York: Modern Library, 1936.

Quiroz, Alfonso W. La deuda defraudada: Consolidaci�n de 1850
     y dominio econ�mico en el Per�. Lima: Instituto Nacional
     de Cultura/Editorial y Productora Gr�fica "Nuevo Mundo," 1987.

------. Banqueros en conflicto: Estructura financiera y
     econom�a peruana, 1884-1930. Lima: Centro de
     Investigaci�n/Universidad del Pac�fico, 1989.

Ramirez-Horton, Susan E. Land Tenure and the Economics of Power
     in Colonial Peru. Madison: University of Wisconsin Press,
     1977.

------. Provincial Patriarchs: Land Tenure and the Economics of
     Power in Colonial Peru. Albuquerque: University of New
     Mexico Press, 1986.

Reid, Michael. Peru: Paths to Poverty. London: Latin
     America Bureau/Third World Publications, 1985.

R�nique C., Jos� Luis. Los sue�os de la sierra: Cusco en el
     siglo XX. Lima: CEPES, 1991.

Rodr�guez Pastor, Humberto. Hijos del celeste imperio en el
     Per� (1850-1900): Migraci�n, agricultura, mentalidad, y
     explotaci�n. Lima: Instituto de Apoyo Agrario, 1989.

Rostworowski de Diez Canseco, Mar�a. Do�a Francesca Pizarro:
     una ilustre mestiza, 1534-1598. Lima: Instituto de
     Estudios Peruanos, 1989.

S�nchez Albornoz, Nicol�s. Indios y tributos en el Alto
     Per�. Lima: Instituto de Estudios Peruanos, 1978.

Scheetz, Thomas. Peru and the International Monetary Fund.
     Pittsburgh: University of Pittsburgh Press, 1986.

Sempat Assadourian, Carlos. El sistema de la econom�a colonial:
     Mercado interno, regiones y espacio econ�mico. Lima:
     Instituto de Estudios Peruanos, 1982.

Silverblatt, Irene M. Moon, Sun, and Witches: Gender Ideologies
     and Class in Inca and Colonial Peru. Princeton: Princeton
     University Press, 1987.

Soto, Hernando de. The Other Path: The Invisible Revolution in
     the Third World. New York: Harper and Row, 1990.

Spalding, Karen. Huarochir�: An Andean Society under Inca and
     Spanish Rule. Stanford: Stanford University Press, 1984.

Stein, Steve. Lima obrera 1900-1930. (2 vols.) Lima:
     Ediciones El Virrey, 1986-87.

------. Populism in Peru: The Emergence of the Masses and the
     Politics of Social Control. Madison: University of
     Wisconsin Press, 1980.

Stein, Steve, and Carlos Monge. La cr�sis del estado
     patrimonial en el Per�. Lima: Instituto de Estudios
     Peruanos, 1988.

Stein, William W. El levantamiento de Atuspar�a. Lima:
     Mosca Azul, 1988.

Stepan, Alfred. The State and Society: Peru in Comparative
     Perspective. Princeton: Princeton University Press, 1978.

Stern, Steve J. Peru's Indian Peoples and the Challenge of
     Spanish Conquest: Huamanga to 1640. Madison: University
     of Wisconsin Press, 1982.

Stern, Steve J. (ed.). Resistance, Rebellion and Consciousness
     in the Andean Peasant World, 18th to 20th Centuries.
     Madison: University of Wisconsin Press, 1987.

Sulmont, Denis. El movimiento obrero peruano, 1890-1979.
     Lima: Tarea, 1985.

Tamayo Herrera, Jos�. Historia social del Cuzco
     republicano. (2d ed.) Lima: Editorial Universo, 1981.

Tarazona-Sevillano, Gabriela. Sendero Luminoso and the Threat
     of Narcoterrorism. New York: Praeger, 1990.

Taylor, Lewis. Bandits and Politics in Peru: Landlord and
     Peasant Violence in Hualgayoc, 1900-30. Cambridge: Center
     of Latin American Studies, Cambridge University, 1987.

Thorp, Rosemary, and Geoffrey Bertram. Peru 1890-1977: Growth
     and Policy in an Open Economy. New York: Columbia
     University Press, 1978.

Uriarte, F. Manual. Transnational Banks and the Dynamics of
     Peruvian Foreign Debt and Inflation. New York: Praeger,
     1985.

Vega, Garcilaso de la. Royal Commentaries of the Incas and
     General History of Peru. Austin: University of Texas
     Press, 1987.

Villanueva, V�ctor. Ej�rcito Peruano: Del caudillaje an�rquico
     al militarismo reformista. Lima: Juan Mej�a Baca, 1973.

------. "Military Professionalization in Peru." Pages 79-85 in
     Brian Loveman and Thomas M. Davies, Jr. (eds.), The
     Politics of Antipolitics. Lincoln: University of Nebraska
     Press, 1978.

Wachtel, Nathan. The Vision of the Vanquished: The Spanish
     Conquest of Peru Through Indian Eyes. New York: Barnes
     and Noble, 1977.

------. "The Indian and Spanish Conquest." Pages 207-48 in Leslie
     Bethell (ed.), Cambridge History of Latin America, 1.
     Cambridge: Cambridge University Press, 1984.

Webb, Richard C., and Graciela Fern�ndez Baca de Valdez (eds.).
     Per� en n�meros, 1990: Almanaque estad�stico. Lima:
     Cu�nto, 1990.

Webb, Richard, and Adolfo Figueroa. Distribuci�n del ingreso en
     el Per�. Lima: Instituto de Estudios Peruanos, 1975.

Weeks, John. Limits to Capitalist Development: The
     Industrialization of Peru, 1950-1980. Boulder, Colorado:
     Westview Press, 1985.

Werlich, David P. Peru: A Short Hisotry. Carbondale:
     Southern Illinois University Press, 1978.

Wightman, Ann M. Indigenous Migration and Social Change: The
     Forasteros of Cuzco, 1570-1720. Durham: Duke University
     Press, 1990.

Wilgus, Alva Curtis. Historical Atlas of Latin America:
     Political, Geographic, Economic, Cultural. New York:
     Cooper Square, 1967.

Yepes del Castillo, Ernesto. Per� 1820-1920: Un siglo de
     desarollo capitalista? Lima: Ediciones SIGNO
     Universitario, 1981.

Zook, David H., Jr. Zarumilla-Mara��n: The Ecuador-Peruvian
     Border Dispute. New York: Bookman, 1964.

Zuidema, R. Tom. Inca Civilization in Cuzco. Austin:
     University of Texas Press, 1990.

Peru

	Web mongabay.com travel.mongabay.com wildmadagascar.org