History Of Peru IV

The election of 1985 was historic in two ways: it was the first peaceful transfer of power in 40 years, and it brought the first president from APRA since the party’s founding in 1928. Alán García Pérez, secretary-general of APRA, won with 53% of the vote, and brought with him an APRA majority in both houses. The new president pursued populist economic policies, aimed at controlling inflation, stimulating the economy, and limiting external debt repayments. To get inflation under control, García established a strict set of price controls, dropping inflation precipitously. Salaries were then allowed to increase, which led to a dramatic surge in the production of industrial and consumer goods. García also announced that external debt service would be set at 10% of export earnings, when several times that amount would have been required to keep up with interest payments alone.

While initially successful, these programs eventually ran aground. The IMF, a constant target of García, declared Peru ineligible for any further borrowing because of the size of Peru’s external debt. After its initial boom, industrial production began to sag. Food shortages became common as suppliers refused to produce with artificially low prices. By 1990, inflation had climbed to four-digit levels.

García had some success in dealing with Peru’s democratic left, but the militant left was another story. By increasing the stridency of his rhetoric, especially against the United States, García was able to capture leftist votes, seriously damaging the power of the United Left (Izquierda Unida—IU). However, Sendero escalated its attacks, coming down out of the mountains and striking at urban and suburban targets around Lima and Callao. In addition, the Tupac Amaru Revolutionary Movement (MRTA) merged with the Movement of the Revolutionary Left (MIR), and struck with increasing intensity. Although García had promised to get the military under control, it was soon clear that he could not function without them, and authorized a set of brutal counter-insurgent campaigns.

By 1990, Peruvians began to cast about for someone to deliver the country from its economic and social woes. Neither APRA nor the AP had any credibility. In a surprise, Alberto Fujimori, the son of Japanese immigrants, defeated conservative novelist Mario Vargas Llosa by 57% to 34%. Other candidates totaled a little over 9%. Fujimori immediately imposed a draconian set of austerity measures designed to curb inflation. These measures caused a great deal of economic dislocation, but did reduce inflation to pre-1988 levels.

Fujimori moved aggressively to combat Sendero and the MRTA-MIR. He organized and armed rural peasants to counter the increased guerrilla presence, and gave the military a broad mandate to crack down on the insurgents. The capture of Abimaél Guzmán, leader of Sendero Luminoso, was hailed as a major blow against the movement, but the violence continued. Human rights continued to deteriorate, and the military became stronger.

Domestic opposition increased as Fujimori became increasingly isolated politically. Then, in April 1992, Fujimori shut down Congress and refused to recognize any judicial decisions. The autogolpe (”self-coup”) received widespread popular approval and, most significantly, the military supported Fujimori’s moves. In 1992, elections were held to create a Constituent Assembly charged with making constitutional reforms, including allowing Fujimori to run for a second five-year term in 1995. Both APRA and AP refused to participate, and Fujimori’s New Majority/Change 90 group took a majority of seats. With full executive powers and a legislature full of supporters, Fujimori was able to enact whatever reforms he deemed necessary to improve Peru’s economic and social situations.

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