The masses of Peru suffered during the course
of the twentieth century from a kaleidoscopic
variety of more or less oligarchic governments,
none of which succeeded in bringing about the
fundamental economic and social reforms the
country needed. Despite opportunistic political
parties proclaiming high ideas of reform, periods
of government by Congress and presidency with
a semblance of democracy were punctuated by
spells of authoritarian rule. Peru was unable to
develop its industries, oil extraction or mining
from its own capital resources. Loans and foreign
investment were encouraged in one decade, only
to arouse a nationalist reaction against foreign
dependency in another. The economy swung
from expansion to bust, depending on world
prices for the commodities Peru exported, and
later in the century the crushing foreign debt
added to its burden. But the pattern of Peru’s
economic development did not fundamentally
differ from that of its neighbours.
The effect of bad times on the poor was all the
more catastrophic as the disparity in wealth
between the top 7 per cent and the bottom 40
per cent was extreme, even in the 1990s. Almost
all the Indian population, comprising about a
third of the total, was wretchedly poor, the chil-
dren malnourished. Alcoholism and ill health
flourished and in the early 1990s cholera from
polluted water supplies reappeared.
The splendid buildings in Lima dating from the
Spanish colonial period present a bitter contrast to
contemporary misery. A society deeply divided is
bound to be a society in conflict. Those who ruled
Peru variously tried reform and repression, some-
times both at the same time. The landless Indians
in the highlands hungered after land reform,
migration of Indians to Lima created unsanitary
shanty suburbs, and local industries produced an
urban working class. It was fertile territory for
communism in the 1920s. One of Peru’s best-
known political leaders, Victor Raúl Haya de la
Torre, responded with a socialist programme of
anti-imperialism, state control, nationalisation and
the protection of freedom and human rights. He
founded in 1924 the Alianza Popular Revolu-
cionaria Americana, APRA for short. APRA was
still a political party in the 1990s and still had a
strong following. It soon shed its Marxist inten-
tions when it came to practical politics, since it
could attain power and the presidency only with
the support of the middle class. It never effectively
tackled the Indian problem, which could not be
solved without radical land reform.
In the 1960s Belaúnde, of the Popular Action
Party, was elected as a reforming president. But
when the 300,000 Indian peasants rose in revolt
in 1965, the army was sent in to crush them. The
history of Peru does not always follow what is
regarded as a Latin American pattern. The army
staged a coup in October 1968 at the height of
another economic slump. The junta was headed
by General Juan Velasco Alvarado, a man with
sympathy for the oppressed Indians and the poor
(the Peruvian military has not always been a reac-
tionary force). Alvarado declared that the junta
would reform the ‘unjust social and economic
order’ and end subordination to foreign eco-
nomic interests. A revolution was attempted from
above. The large coastal sugar estates were expro-
priated and turned into cooperatives. The
landowners on the coast and in the highlands
were destroyed as an elite with political power.
About 40 per cent of land had been transferred
by 1975. The three-quarters of a million squat-
ters in the shanty towns were given rights to the
land and a sense of community was encouraged.
Worker co-ownership in factories and manage-
ment was designed to establish ‘industrial com-
munities’ in parallel to the rural communities.
Foreign-owned companies, mainly American,
were nationalised. General Velasco’s aim was to
establish a distinctive Peruvian socialism.
The economic flaws soon made themselves
felt. While some workers and Indians were
helped, overall the reforms did not bring the full
benefit that had been expected. Artificially low
food prices, designed to help the urban poor, hit
the peasantry. The world economic recession of
the mid-1970s led to a fall in copper prices and
those of other commodities at a time of heavy
Peruvian indebtedness to foreign investors. The
discredited military junta handed the country
back to the civilian politicians.
In 1980 Belaúnde was elected president again.
He dismantled the kind of corporate state the
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