Peru’s Cleavages, Conflict, and Precarious Democracy
Summary and Keywords
Since Peru’s independence in 1824, politics in the country have been turbulent. Repeatedly, democracy was attempted but not sustained. Between 1919 and 2000, no Peruvian political regime—either democratic or authoritarian—endured more than 12 years. Scholars agree that the primary reason for Peru’s history of political turbulence was the severity of its overlapping ethnic, class, and geographical cleavages. Peru’s renowned novelist Mario Vargas Llosa wrote that the country was “an artificial gathering of men from different languages, customs, and traditions whose only common denominator was having been condemned by history to live together without knowing or loving one another.”
However, in the 21st century, cleavages have attenuated and the possibility of a cohesive nation emerged. Peru has been democratic for more than 18 years—longer than ever before. With one-person, one-vote elections, political violence has been rare and economic growth rapid. However, Peru’s economic growth has been based heavily on mining and other extractive industries, and it is not clear that cleavages have attenuated sufficiently for democracy to be consolidated. In addition, democracy is challenged by bitter legacies from the 1980s–1990s conflict with the Shining Path guerrillas and the 1990–2000 authoritarian government of Alberto Fujimori. Further, in 2017–2018, it was all too apparent that Peru’s political and economic elites remain complicit in corrupt global financial networks.
Peru is a country of 1,285,000 square kilometers, located near the center of the west coast of South America. From its north to its south, Peru is split into three distinct geographies: the narrow coastal strip, where about half of the population lives; the Andean mountains, higher in Peru than in any of its neighbors; and the jungle, the largest of the three areas but sparsely populated.
Interaction among the three areas is impeded by vast differences in climate and altitude: a temperate, arid coast; more than a thousand Andean snow peaks higher than 5,000 meters; and a hot rain forest. Prior to the 21st century, transportation networks among the areas were poor; even in the 2010s the main highway between the capital, Lima, and Peru’s interior can be blocked for days by mudslides. Significantly, in contrast to other Andean countries, Peru’s capital is on the coast—for centuries, far from where most Peruvians lived in the mountains.
The population of Peru is about 33 million people—the fifth largest in Latin America after Brazil, Mexico, Colombia, and Argentina. Across the centuries, the size of Peru’s population has varied a great deal. At the time of the Spanish conquest, it is estimated to have been roughly 9 million. But, amid diseases introduced by the Spaniards and their abuse, by 1620 it was only approximately 600,000. As of 1950, it had reached 7.5 million. As in other Latin American countries, since the 1970s migration from Peru’s countryside to its cities has been rapid, and in 2019 Peru’s population is more than two-thirds urban—almost one-third in Lima alone.
Today, most of Peru’s people are of mixed indigenous and European ethnic heritage (mestizos). Many Peruvians are also cholos—people of exclusively indigenous descent who have adopted European attire and customs. Perhaps 25% of the population is exclusively indigenous, 10% exclusively European, and smaller percentages exclusively of African or Asian descent. However, these percentages vary by geographical area: almost all the indigenous population resides in the Andean mountains, whereas almost all the European population resides in Lima. Traditionally, almost 100% of Peruvians professed Roman Catholicism, and, today, a slightly larger proportion than in other Latin American countries (about 75%) profess the religion. Peru’s indigenous peoples continue to speak Quechua or Aymara languages and often practice traditional religions.
Patterns of economic growth and development in Peru have varied considerably over time. In general, however, Peru’s GDP per capita has been in Latin America’s middle ranges; as of 2016, its GDP per capita was about $12,500 in purchasing power parity terms—much less than its neighbor Chile, very similar to its neighbors Colombia and Ecuador, and considerably more than its neighbor Bolivia (World Bank, 2018). Economic growth has usually been based on the export of natural resources; in the 21st century, about 50% of its exports were oil or minerals, roughly similar to percentages in Chile and Colombia. In recent years, Peru has stood out for economic growth rates well above the Latin American average.
Until very recently, the disparity in living standards between Lima and the hinterlands was egregious (McClintock, 1998, pp. 167–173). In the phrase of Peru’s noted historian Jorge Basadre (Arce, 2014, p. 71), there were “two Perus”: “official Peru,” located in Lima and ncluding the roughly 10% of the population that was European, Catholic, Spanish-speaking, and prosperous; and, “deep Peru,” located in Peru’s highlands and including most of Peru’s indigenous population that was only nominally Catholic, Quechua-speaking, and impoverished. A British traveler to Lima once reported that “if three of [Lima’s] better-off inhabitants knew Cuzco first-hand, another thirty had graced the streets of London” (Klarén, 2000, p. 214).
Patterns of social mistrust, corruption, and crime that began during the Spanish conquest endure. In polls by Latinobarometer and the Latin America Public Opinion Project, Peru is almost invariably among the countries with the lowest levels of social trust (the percentage of people who say they can “trust other people”). Across centuries, graft has been “unbound” in Peru (Quiroga, 2008). In recent decades, corruption has been abetted by the drug trade; Peru is a major producer of coca, and large amounts of coca and cocaine are smuggled out of the country.
Peru’s History: The Conquest, Colonial Era, and Independence
Peru was the home of South America’s largest and most sophisticated indigenous civilization and, after the Spanish conquest, home to one of Spain’s two viceroyalties in the hemisphere. Accordingly, the Spanish conquest and colonial rule were especially traumatic.
At the time of the conquest, the Inca Empire extended from present-day Chile to Ecuador and boasted vast irrigation networks and excellent food storage and distribution facilities. Hunger was rare. However, when Francisco Pizarro arrived in 1532, the Incans had been weakened by a bitter struggle over the Incan throne between Atahualpa, who had emerged victorious, and his half-brother Huascar. The Spaniards had horses, gunpowder, and swords; in the event, fewer than 200 Spaniards brutally overwhelmed more than 10,000 Incan warriors. Pizarro’s forces captured Atahualpa and held him for a huge ransom, but, after its payment, they betrayed their promise and executed him.
Exceptionally endowed with gold, silver, and mercury, Peru became a source of tremendous treasure for Spain. Peru’s indigenous peoples were forced to work in the mines—by 1620 the indigenous population had been decimated. The Spaniards also occupied much of Peru’s best agricultural land.
Indigenous rebellions were frequent. The largest was in 1780, led by Túpac Amaru II, a descendant of the Inca royal family. Despite the killing of thousands of people by the Spaniards, the rebellion gathered substantial support and lasted almost two years. Ultimately, however, the rebellion was defeated, and Túpac Amaru II was drawn and quartered in the main square of its epicenter, Cusco.
In the early 19th century, a movement for independence erupted throughout Latin America. However, Spain’s viceroyalty was based in Lima and the Crown provided major benefits to Lima’s elites; Lima became the center of the Spanish counterattack against the independence movement. In 1824, it was largely foreign forces—led by Venezuela’s Simón Bolívar and Argentina’s José de San Martín—that brought independence to Peru.
Peru’s History: Independence to 1968 and the Consolidation of Peru’s Oligarchy
For the first 20 years after independence, military leaders from different regions competed for power and fought over national boundaries. Then, in the early 1840s, guano (bird excrement, found in huge quantities on Peru’s coast) was in demand as an excellent fertilizer in Europe and the United States, and Peru’s first natural resource–based export boom began. With the new wealth came a new merchant class as well as the beginnings of a nation-state. Elections were marred by violence, fraud, and restricted suffrage, but they were held. President Ramón Castilla (1845–1851 and 1855–1862) abolished slavery and promoted public works but failed to try to “sow the oil”—to introduce a program for inclusive and sustainable development. In the 1870s, amid resource exhaustion, global recession, and the discovery of alternative fertilizers, the boom turned to bust.
In the War of the Pacific (1879–1883), Peru and Bolivia fought Chile over nitrate deposits discovered along the Pacific coast. Peru’s elites did not fully mobilize peasants against the Chileans; elites feared that the peasants would turn against them. Chile succeeded even in occupying Lima. In 1883, Peru ceded its nitrate-rich southern province to Chile and made other concessions; peace was achieved. But the defeat took a huge toll on Peru’s economy and its national pride.
In the 1890s, economic growth returned—but was again based on the export of natural resources. Large estates owned by Peruvians (haciendas) expanded, usually at the expense of smallholders and peasant communities; on the coast, they produced sugar and cotton and, in the mountains, wool (from sheep). On the haciendas, wages were low, hours long, and abuses common. The wealth from the agricultural exports was deemed to be controlled by Peru’s “forty families,” constituting Peru’s “oligarchy”—terms used by Peruvians and scholars alike (Gilbert, 1977).
With economic growth came a measure of political stability. During what was called the “Aristocratic Republic” (1895–1919), suffrage was severely restricted and electoral manipulation common, but the constitutional order was maintained (with the exception of a brief coup in 1914). The Aristocratic Republic was dominated by the Civilista Party, which was led by Peru’s “forty families” and promoted free markets.
In 1919, at the end of World War I, Augusto Leguía was elected and then, with military support, began dictatorial rule. At first, Leguía funded public works and implemented socioeconomic reforms and was not unpopular, but gradually he became more corrupt and repressive. Courting U.S. capital, he doubled down on Peru’s export-led market policies. While Europe remained Peru’s top economic partner, U.S. companies dominated the increasingly important oil, silver, and copper sectors. These companies often brought scant benefit to Peru; for example, from 1916 to 1934 only 16% of the value of the total sales of the U.S.-owned International Petroleum Company stayed in Peru in the form of wages, taxes, or other payments (Reid, 2008, p. 39).
Amid both Peru’s political and economic trajectory and the Russian Revolution, leftist ideologies emerged. The two most prominent intellectuals were José Carlos Mariátegui and Víctor Raúl Haya de la Torre, who shared provincial origins but advanced rival political projects. Raised on Peru’s south coast, Mariátegui was a socialist who proposed that workers and peasants, rooted in Peru’s indigenous culture, carry out Peru’s transformation, and he worked to build a national labor confederation. Raised in the north coast city of Trujillo, Haya de la Torre proposed a cross-class alliance, including intellectuals and the middle class, and worked to build a political party, the American Popular Revolutionary Alliance (APRA). Proclaiming that “Only APRA will save Peru,” Haya was like a preacher, promising the redemption of his followers against both Peru’s oligarchs and U.S. imperialists.
Peru’s History: The Post-1930 Challenges to the Oligarchy and Its Eclipse During the 1968–1980 Military Regime
In 1930, amid the Great Depression, Leguía was overthrown by a lieutenant colonel, Luis Sánchez Cerro. In 1931, an election was held, pitting Sánchez Cerro against Haya. Although mestizo, Sánchez Cerro enjoyed the support of the oligarchy; at the same time, his modest background and darker skin appealed to popular groups. By contrast, Haya’s appearance was European; his political base, the hacienda workers on Peru’s north coast, was a small percentage of the population. Denouncing APRA as anti-Catholic, anti-military, and closet-Communist, Sánchez Cerro won.
The electoral result was repudiated by APRA, and the party quickly became obstructionist in the legislature. In retaliation, Sánchez Cerro deported APRA’s entire congressional representation. In 1932 in Trujillo, Apristas rebelled, executing 60-odd members of the army; in reprisal, the military killed at least 1,000 Apristas. In 1933, Sánchez Cerro was assassinated by an Aprista. Under Sánchez Cerro’s successor, repression of APRA intensified and Aprista militants continued to resort to violence.
The tragic events of the early 1930s were the start of a vicious circle in Peruvian politics, a vicious circle that was not uncommon at this time in Latin America. First, Peru’s elites were loath to tolerate a government that threatened their interests; second, angry Aprista militants resorted to violence; and, completing the vicious circle, Aprista militants’ resort to violence deeply alienated Peruvian elites. Between 1936 and 1968, when elections were held, APRA was proscribed to one degree or another, and at various times Apristas were imprisoned and Haya exiled.
As of the early 1960s, no seriously reformist government had been in power for any length of time, and inequality remained exceptionally severe (Thorp & Bertram, 1978, pp. 145–300). In 1961 the wealthiest l% of the economically active population received a staggering 30% of the national income (Webb, 1977, pp. 6–7). Peru’s Gini index of land distribution was the most skewed among 54 nations for which data were reported (Taylor & Hudson, 1972, p. 267); a mere 280 families—less than 0.1% of all farm families—owned approximately 30% of the land and more than 50% of the best land (Martínez & Tealdo, 1982, pp. 15–16).
In the early 1960s, in the wake of the Cuban Revolution and the Alliance for Progress, reformist tides were sweeping Latin America. In Peru, elections were held in 1962 and won by APRA, but without the one-third of the vote legally required for the presidency. The military intervened and a new election was won by Fernando Belaúnde Terry of the Popular Action party. An architect and democrat in the liberal tradition, Belaúnde promised social reform without aprismo, but was unable to deliver. Belaúnde was aristocratic and non-confrontational, and his reform initiatives were blocked by APRA and by the U.S. government of President Lyndon Johnson. In 1968, Belaúnde was ousted by the military.
The new government under General Juan Velasco Alvarado was a leftist military government—a rare type of government in Latin America. Scholarly debates about the nature and goals of the Velasco government are fierce (Aguirre & Drinot, 2017; Cotler, 1983). The government described itself as “revolutionary,” promoting a “fully participatory social democracy.” Skeptical scholars often deemed it “corporatist” or “populist,” arguing that the key goal of this “revolution from above” was class conciliation.
Ultimately, the structure of power and wealth changed considerably (Lowenthal, 1983). The Velasco government eclipsed Peru’s oligarchy. Agrarian reform was the most sweeping in Latin America save the Cuban; almost all landholdings over 50 hectares were expropriated and transformed into various kinds of cooperatives, benefiting to various degrees approximately 25% of Peru’s farm families (McClintock, 1984, pp. 64–67). The government also expropriated fishing, mining, banking, newspaper, and other businesses owned by oligarchic families as well as the notorious International Petroleum Company and other U.S. companies. For the first time, Peru’s government was intervening in the economy to try to shift Peru away from dependence on natural resources.
Unfortunately, the reforms did little to alleviate the lot of Peru’s poorest—its highlands peasants. There was not enough quality land in these areas to make a major improvement in peasants’ living standards, and public expenditure was not shifted toward highlands agriculture. The government did, however, expand educational opportunities in these areas and encouraged respect for the culture of indigenous peoples.
The Velasco government did not have a coherent political project. Political parties were deemed co-opted by Peru’s elites and unable to undertake reforms; they were proscribed. Instead, the government created the National System for the Support of Social Mobilization (SINAMOS, an acronym that means “Without Masters”), but its goals were unclear. Ultimately, workers’ and peasants’ organizations expanded dramatically, largely under the banner of the Marxist left.
In 1973, Velasco fell ill. As his behavior became more erratic and repressive actions increased, factionalism within Peru’s military intensified. At the same time, the country’s economy weakened. In 1975, Velasco was overthrown in a palace coup by his premier and finance minister, the more conservative General Francisco Morales Bermúdez; less than two years later, Morales Bermúdez announced a return to democracy.
Peru’s History: The Besieged 1980–1990 Democratic Governments and the 1990–2000 Fujimori Government
In 1980, the prospects for democracy in Peru appeared more favorable than ever before. The oligarchy had fallen; APRA was not proscribed. As in other Latin American countries, illiterates were enfranchised for the first time and the political left was participating in electoral politics. The U.S. government was proclaiming its commitment to democracy, and Peru’s neighbors were transitioning to democracy. However, like most Latin American countries, Peru was severely challenged by what is called the “debt crisis.” Concomitantly, for the first time in Peru, the state was confronted by a violent insurgency, the Shining Path (Sendero Luminoso).
The death toll from political violence in Peru between 1980 and 2000 is estimated at more than 60,000 people; in contrast to other Latin American insurgencies, the Shining Path—not the state—was responsible for the majority of deaths. Also in contrast to other Latin American insurgencies, the Shining Path targeted civilian leaders on the political left. The Shining Path emerged in Peru’s southern highlands, in particular Ayacucho; it expanded into Peru’s coca-growing regions on the eastern Andean slopes and finally into cities. Even Lima was wracked by terrorist attacks. In 1989, the Shining Path had approximately 10,000 combatants, controlled about 28% of the country’s municipalities, and had the support of roughly 15% of Peruvians (McClintock, 1998, p. 73).
Scholars have provided a variety of explanations for the rise of the Shining Path. Gustavo Gorriti (1990) highlighted the charisma, capability, and Maoist ideology of the insurgency’s leader, Abimael Guzmán. Carlos Iván Degregori (1986) stressed the frustration of young people raised in impoverished Andean communities but moving to highlands cities for their education and ultimately furious at Peru’s continuing inequalities and ethnic discrimination. Shining Path’s savage but shrewd strategies, its organizational discipline, its access to revenues from the drug trade, and the state’s ineffective responses were also emphasized (Palmer, 1992).
In addition, Cynthia McClintock (1984, 1998) underlined Peru’s economic plummet amid the debt crisis. Peru’s decline in per capita GDP during the 1970s and 1980s was the most severe in Latin America save Nicaragua (Inter-American Development Bank, 1992, p. 286). In 1989, Peru’s real minimum wage was a mere 23% of its 1980 level, the worst drop among the 19 countries for which data were reported (Inter-American Development Bank, 1990, p. 28). In rural areas, hunger was rampant; in a 1984 study, chronic malnutrition was evident in more than 70% of children under six in the homes of subsistence peasants and day agricultural laborers (Mitchell, 1991, p. 128).
The governments elected in 1980 and 1985 failed to cope with the insurgency. In 1980, the 1963–1968 president, Fernando Belaúnde, was re-elected. At first, Belaúnde belittled the threat from the Shining Path, but he then endorsed wholesale repressive military action, which resulted in thousands of civilian deaths and more support for the insurgency.
In 1985, for the first time, an APRA candidate was elected president—Alan García. Haya’s protégé, García was young and charismatic; he staked out center-left positions and won in a landslide. García acknowledged that the Shining Path was in part the result of destitution and, at first, sought to provide economic aid to the southern highlands. However, García outraged the international financial community by introducing expansionary fiscal policies and proclaiming that Peru would pay no more than 10% of its export earnings to service its debt. At the end of 1987, Peru’s international reserves ran out and the economy was in dire straits.
At first, Peru’s 1990 elections were expected to be won by the renowned novelist Mario Vargas Llosa. But many Peruvians were worried by his alliance with discredited rightist parties and by his call for a neoliberal economic “shock.” Only a month before the election, Peruvians warmed to an outsider, Alberto Fujimori, who campaigned against Vargas Llosa’s “shock.” Fujimori was a former mathematics professor and university head with no political experience; he led a personal vehicle, Change 90 (1990). The son of lower-middle-class Japanese immigrants, Fujimori exploited Peruvians’ positive perceptions of Asians; he invoked the slogan “Work, honesty, and technology.” Fujimori won the runoff against Vargas Llosa with a resounding 62%.
Immediately after Fujimori’s election, he reversed his campaign promises and implemented economic policies dubbed the “Fujishock.” State expenditure was slashed, foreign investment laws were eased, tariffs were reduced, and privatization was initiated. Peru renegotiated its foreign debt and returned to the good graces of the international financial community.
Then, suddenly, in April 1992, Fujimori executed an autogolpe (coup by the president himself). With the support of the armed forces, Fujimori suspended the constitution, closed the congress, dismantled the judiciary, and detained more than 20 journalists as well as numerous APRA leaders.
Why did Fujimori execute the autogolpe? The blame was placed primarily on Fujimori’s legislative minority by various scholars, including Kenney (2004, pp. 246–260) and Tanaka (1998, pp. 208–218). Fujimori’s Change 90 had only about 20% of the seats in the two houses of the legislature. Fujimori was pursuing draconian security measures opposed by the legislature, possibly, he could be impeached.
However, the blame was placed primarily on Fujimori’s authoritarianism and corruption by most scholars, including Cameron (1994), Conaghan (2005), Cotler (1995), and Stokes (1996). These scholars believed that Fujimori could have fashioned a legislative majority with APRA and leftist parties or with Vargas Llosa’s group but did not want to negotiate or undergo congressional or judicial oversight. In the words of Cotler (1995, p. 350): “Fujimori ceaselessly incited [friction] as he set a collision course, certain that he would ultimately win the confrontation between the already discredited parties.” In addition, the Fujimori government was exceptionally corrupt (Quiroz, 2008). In March 1992, Fujimori’s wife accused members of the president’s family of corruption; these charges would have been investigated by a congressional commission.
After the autogolpe, the Fujimori government enjoyed important successes. In September 1992, a small, elite squad within Peru’s police (established under García) captured the leader of the Shining Path, Guzmán. Within the next few weeks, using information found in Guzmán’s hideout, anti-terrorist police arrested more than 1,000 suspected guerrillas. The Shining Path’s image of invincibility was punctured, and, by 1995, the insurgency decimated.
In part due to the recovery of political peace and in part due to Fujimori’s policies, Peru’s economy grew robustly. The revenue from the government’s privatization program was immense; some of the funds were channeled to social programs and infrastructure for disadvantaged, remote communities. Dressed in a poncho and Andean-style hat, Fujimori visited these communities and inaugurated public works. Not surprisingly, Fujimori was popular and won the 1995 election easily.
However, concerns about Fujimori’s authoritarian proclivities mounted. In 1996, Fujimori contorted Peru’s re-election rule so that he could run for a third consecutive term. Fujimori governed more closely with Peru’s military and intelligence services, in particular Vladimiro Montesinos. Montesinos, a former army captain who had been an asset of the Central Intelligence Agency, was Fujimori’s “fixer.”
As the 2000 elections neared, the Fujimori government resorted to steeply tilting the electoral playing field. Yet an opposition candidate, Alejandro Toledo, rose in the polls. Dark-skinned and born in the mountains of Peru, Toledo had won scholarships to Stanford University and, ultimately, a position at the World Bank. In the first round, Toledo tallied more than 40%, forcing a runoff. Suddenly, the government introduced new computer software and declined to give the Organization of American States (OAS) election-monitoring team time to review it; the team suspected fraud. Toledo boycotted the runoff; Fujimori claimed that he won. Although the OAS team called the election “not free and fair,” Fujimori was inaugurated. The inauguration was tolerated by the U.S. government; powerful U.S. actors had worked with Fujimori in various capacities.
However, almost immediately, the regime collapsed. In September, a videotape of Montesinos bribing an opposition congressman was leaked to Peru’s media; Peruvians exploded in disgust. Montesinos fled Peru, and in November, from safe haven in Japan, Fujimori faxed his resignation.
The experiences of the 1980s and 1990s were to weigh heavily on 20th-century Peru. The Shining Path weakened the country’s left; it had provoked divisions and assassinated leaders, and for decades it discredited leftist ideologies. Controlling the media for many years, Alberto Fujimori established an image as Peru’s savior, both from hyperinflation and the Shining Path—an image that became the foundation for what was to be called the Fujimorista political party.
21st-Century Peru: Constitutional Framework and Government Structures
In 1993, in the aftermath of the autogolpe, a new constitution was approved; it remains in force to date, despite strong criticism from Peru’s left. In contrast to the previous 1979 constitution, the 1993 charter minimized the economic role of the state and increased the power of the executive. Several features of the 1993 constitution, in particular the presidential re-election rule, were modified subsequently, and several features were put to a referendum in December 2018.
The president and two vice-presidents are directly elected every five years. If no candidate wins 50% plus one vote in the first round, a runoff is held among the top two candidates. The president is eligible for re-election after one intervening term. The president may be impeached by a two-thirds vote of the legislature. Somewhat unusually, the president may dissolve the legislature, prompting a new legislative election, if the legislature denies a vote of confidence to two successive cabinets. The legislative powers of Peru’s president (including decree powers, budget powers, veto powers, and plebiscite powers) were rated fifth greatest in Latin America by Sebastian M. Saiegh (2010, p. 56).
Within Peru’s government, the ministry of economy and finance has enjoyed particular power. Peru’s 2011–2014 minister of economy and finance, Luis Miguel Castilla, was considered to be a “super-minister,” able to place his allies at the head of eight other ministries (Bedoya, 2016, p. 52). Alberto Vergara (2012) and Eduardo Dargent (2015) argue that the ministry of economy and finance has been autonomous even from Peru’s president and business elites. They point to the dramatic increase in the political independence and technical expertise of economic ministers. Of the 10 ministers between 2000 and 2013, none was a member of the incumbent’s political party and all 10 had engaged in graduate studies in the United States or Europe (Dargent, 2015, p. 101). As Peruvians’ memories of Peru’s 1980s to early 1990s economic traumas remained strong, the ministers’ expertise was a major source of power. Other scholars, however, in particular John Crabtree and Francisco Durand (2017), argue that the ministry remained beholden to Peru’s business elites.
Peru’s legislature is unicameral. Its 130 members are elected through proportional representation. Although each party ranks its legislative candidates on the ballot, voters may eschew the party’s list and vote for their own two preferred candidates—their two “preference votes.” The formula for the transformation of votes into seats is the most common in Latin America, the D’Hondt, which overrepresents the two largest parties in a district. There are no midterm legislative elections.
Peru’s judiciary is independent of both the executive and the legislature. The highest court, the supreme court of justice, has the power to rule on the constitutionality of laws. Until 2018, all justices were appointed by the National Council of the Magistrature, which incorporates members chosen by the supreme court itself, the heads of lower courts, bar associations, and university presidents; with a goal of greater openness and transparency, a new National Board of Justice with revised procedures was developed.
Until 2002, Peru was highly centralized. At times in the 20th century direct elections for municipal offices were held, but in general decentralization was scant. The 2002 decentralization law set up 25 “regions” based on already existing “departments”—very similar to states in the United States. A regional governor and a regional council, as well as mayors and municipal councils, are directly elected for four-year terms. Considerable powers over infrastructure, health, and education devolved to the regional and municipal bodies. The decentralization reform incorporated provisions for popular participation, including participatory budgeting (McNulty, 2011).
In principle, Peru is highly committed to the integrity of its electoral processes. The vote is compulsory, and this rule is enforced. The National Electoral Commission is responsible for the registration of political parties, the overall electoral process, and the proclamation of the results. It is headed by its member, selected by the vote of Peru’s supreme court; other members are selected by sets of judges, Lima’s bar association, and the deans of Peru’s law schools. The National Office of Electoral Processes has various responsibilities, including the design and distribution of the ballot and the vote count.
21st-Century Peru: Market Economics, Extractive Industry, and a Degree of Social Inclusion
In contrast to Peru’s Andean neighbors Bolivia and Ecuador, but similarly to Colombia and Chile, Peru has maintained market economic policies from the 1990s through the present. For example, on the World Bank’s 2018 rankings of “Doing Business,” Peru was second in Latin America after Mexico, closely followed by Colombia and Costa Rica (World Bank, 2018b, p. 4). The particular surprise was that President Ollanta Humala (2011–2016), elected on a leftist platform, shifted rightward and maintained market policies. While there is no question that market policies brought rapid economic growth, there is considerable question about the concomitant degree of social inclusion.
Peru welcomed international trade. In 2018, Peru’s weighted average tariff was only 3.2%—among the lowest in Latin America (Index Mundi, 2018). Between 2000 and 2014, Peru concluded 14 free-trade agreements—more than any other Latin American country except Chile (OAS, 2015). Among Peru’s free-trade partners are the United States, China, the European Union, and Japan. Peru was one of the Latin American countries (along with Chile and Mexico) that negotiated the ill-fated Trans-Pacific Partnership. Between 2000 and 2015, the value of Peru’s trade more than tripled in real terms and, at its apex to date in 2011, reached $46 billion (Webb & Fernández Baca, 2007, p. 1152, 2016, p. 887).
Peru also welcomed foreign investment. The inflow of foreign direct investment to Peru during 2010 to 2015 more than quadrupled in real terms the inflow during 1995 to 2000 (Bedoya, 2016, p. 12). Between 2005 and 2017, foreign direct investment in Peru approximated $6.5 billion per year—many times more than in Bolivia or Ecuador but only about two-thirds the figure for Colombia and one-half that for Chile (ECLAC, 2018, Table 1.3). Although figures were imprecise, it was likely that, in the 2010s, China was investing more than any other country (McClintock, 2016, p. 192). China’s investments were almost exclusively in mining and energy and included approximately $20 billion in the Las Bambas copper mine, the largest single investment in Peru’s history (ConsultAndes, 2018, p. 5).
Between 2001 and 2015, GDP growth averaged 5.3% per year (World Bank Group, 2018a, p. 35). Between 2002 and 2012, Peru’s GDP growth was the best in Latin America save Panama; between 2013 and 2017, Peru’s GDP growth easily surpassed the Latin American average but fell behind a number of countries (ECLAC, 2011, Table A-2, 2018, Table A-3). For the first decade of the 20th century, the increase in Peru’s GDP per capita was much greater than in any other decade since 1920 (Hunt, 2014, p. 15).
As in the past, Peru’s growth was based heavily on the extraction of natural resources and remained dependent on international forces beyond its control. At the turn of the 21st century, minerals (especially copper and gold but also silver and zinc) comprised about 45% of Peru’s exports; for some periods between 2000 and 2012, prices for these minerals quadrupled (Webb & Fernández Baca, 2013, p. 899). The jump in minerals prices was due in large part to surging demand from China; China was displacing the United States as Peru’s top trade partner. At the end of this period, minerals prices slumped—and so, as just noted, did Peru’s economic growth.
Peru tried to diversify its economy, but in the second decade of the 21st century minerals continued to comprise almost 50% of Peru’s exports (Webb & Fernández Baca, 2016, p. 887). The value of non-traditional exports, such as asparagus and other vegetables, tropical fruits, and metal products, did increase considerably, from about $2 billion per year in the early 2000s to more than $4 billion in 2014 and 2015, but they were still less than one-third of Peru’s exports (Webb & Fernández Baca, 2007, p. 1152, 2016, p. 888).
One dramatic economic change was a boom in tourism, which had important cultural and political ramifications. Between 2000 and 2015, the number of international tourist arrivals was increasing less than 50% in the Americas overall but almost quintupled in Peru, to more than 4 million (Webb & Fernández Baca, 2013, p. 737, 2016, p. 725; World Tourism Organization, 2018, p. 4). By some estimates, tourism became Peru’s third-largest source of income, after mining and agriculture/fishing (LARR, 2018b, p. 2).
Peru’s tourism boom was concomitant with the country’s increased international prestige, which rebounded within the country, helping to build “one Peru.” During this period, Machu Picchu was selected as one of the “new seven wonders of the world,” renowned novelist Mario Vargas Llosa won the Nobel Prize, and Peru became the first Latin American country with two restaurants among the World’s 20 Best Restaurants. Peru’s top chef, Gastón Acurio, won the Global Gastronomy Award in 2013 and established restaurants around the world; he has said that his mission “isn’t just making restaurants. What we are doing, really, is selling a country” (García, 2014, p. 49). Acurio applauds Peru’s gastronomy because it integrates diverse ethnic culinary traditions—from the indigenous Quechuan to the colonial Spanish to the immigrant Asian and African. In a 2014 opinion poll, 55% of respondents said that Peru gave them a feeling of “pride”; Machu Picchu and gastronomy competed as the two top reasons for pride (El Comercio, 2014, p. 12).
Many experts believe that Peru’s growth was inclusive. Huber and Lamas (2017) reported that Peru’s traditional socioeconomic structure of a triangle, with a wealthy elite at the tiny pinnacle and the immense majority at the impoverished base, had become a trapezoid, including a significant middle class. As in much of Latin America, enrollment in tertiary education, especially for-profit universities, skyrocketed throughout the country, enabling a path to the middle class even in remote areas (Huber & Lamas, 2017). Malls boasting cinemas and restaurants emerged in most provincial cities. By one estimate, in 2011, 49% of Peru’s population was in the middle class; in 2014, 90% of urban households had a cell phone (Carrión & Palmer, 2018, p. 205).
Poverty declined dramatically. The percentage of the population in poverty fell from 59% in 2004 to 21% in 2016; Peru’s 48-point improvement was among Latin America’s very best (World Bank, 2018). Richard Webb (2013) found that, in rural districts that were traditionally among Peru’s poorest, incomes were rising significantly, in good part due to new roads. The infant mortality rate improved from 30 deaths per live births in 2000, about 30% higher than in Colombia or Ecuador, to 12 in 2016, almost identical to Colombia and Ecuador (World Bank, 2018). Similarly, undernourishment declined considerably, by about as much as in Colombia and Ecuador (LARR, 2018a, p. 8).
Inequality declined as well. The World Bank Group (2018) indicated that, during 2004 to 2016, income growth for the bottom 40% of Peru’s population was considerably greater than for the population as a whole. Peru’s GINI index fell from 56 in 1999 to 44 in 2016; Peru’s 12-point improvement was similar to that in Bolivia and Ecuador, but roughly double that in Brazil, Colombia, Chile, and Uruguay (World Bank, 2018).
However, for other experts, Peru’s growth was not sufficiently inclusive. John Crabtree and Francisco Durand (2017, p. 183) argue that Peru’s socioeconomic structure remained a triangle. As of 2015, approximately 45% of Peru’s rural population was still classified as “poor”—better than the 77% in 2004, but still a large percentage (Webb and Fernández Baca, 2007, p. 559, 2016, p. 413). In the same year, almost 20% of the population of the northern highlands province of Cajamarca—home to several of Peru’s most lucrative mines—remained in “extreme poverty” (Webb & Fernández Baca, 2016, p. 413).
In addition, although the number of Peruvians in poverty declined, many were barely getting by. Peru’s minimum wage (a commonly earned wage) was consistently below Latin American averages (similar to Colombia’s but below Ecuador’s) and was only about $270 per month in 2018 (La República, 2018). Salaries for teachers hovered in the range of $400 a month, among the lowest in Latin America (Crabtree & Durand, 2017, p. 96).
International mining companies were gaining large swathes of Peru’s land; by 2013, approximately 20% of Peru’s territory was in mining concessions, affecting more than half of Peru’s peasant communities (Li, 2015, pp. 16–17). Peasant communities perceived damage to their land, their water, and their culture; conflicts escalated, reaching levels unparalleled elsewhere in Latin America (Li, 2015, p. 3). In 2017, the number of formally registered conflicts between companies and localities reached 171 (Ruiz Leotaud, 2018). At the Las Bambas mine mentioned above, violent protests against the contamination and noise vibrations resulting from the daily use of an unpaved road by more than 200 trucks have been ongoing for several years. In the bloodiest conflict, in June 2009 in the Amazon town of Bagua, indigenous groups blocked roads and waterways for 55 days; when the police retook the area, at least 34 people were killed.
Peru’s governments have sought to ameliorate conflict between extractive companies and nearby communities, but without great success. In 2004, what was called the “canon” began: 50% of the taxes paid by mining companies are paid to the governments of the regions and municipalities where the extractive operations take place. Unfortunately, however, many regional and local authorities proved corrupt or incompetent, and numerous communities did not benefit. Further, in 2016, a law of “prior consultation” was approved, requiring that extractive companies submit their plans to communities for review; the law was “widely regarded as the most advanced in Latin America” (Viscidi & Fargo, 2015, p. 4). However, prior consultation was adamantly opposed by mining companies, and the government backtracked; to date, prior consultation has been applied only in the Amazon area, not the highlands, and in “only a few instances” (Crabtree & Durand, 2017, p. 163).
21st-Century Peru: Civil Society, Parties, and Elections
Since 2001, Peru’s democracy has been more robust than ever before; as Julio Carrión and David Scott Palmer (2018) have posited, it is very possible that Peru’s authoritarian legacy has been overcome. Peru’s 2001, 2006, and 2011 elections were models of freedom and fairness; between 2001 and 2016, voter turnout in presidential elections averaged above 80%, one of the highest rates in Latin America (McClintock, 2018, p. 156).
Yet during the 21st century, satisfaction with democracy in Peru was usually among the three lowest of the 18 Latin American countries; in 2018, less than 15% of Peruvians were satisfied with democracy (The Economist, 2013, p. 42, 2018, p. 36). A vicious circle was evident. First, amid continuing popular demand for greater social inclusion, presidents promised more inclusion than they delivered and became unpopular. Second, amid presidents’ unpopularity, their political parties broke down. By definition, amid weak parties, the links between presidents and civil society were also weak. And, completing the vicious circle, without institutionalized support from civil society presidents had no political base that could help guide them and tide them over periods of low popularity.
In the 21st century, three of the four political parties that won the presidency—Alejandro Toledo’s Peru Possible, Ollanta Humala’s Win Peru Alliance, and Pedro Pablo Kucznyski’s Peruvians for Change—were mere electoral vehicles that broke down when their leaders became unpopular. Although APRA returned to the presidency in 2006, it was increasingly dominated by Alan García and became a phantom of its former self.
Peru’s only strong party was usually called the Fujimorista party; it was led by Keiko Fujimori, the former president’s daughter. It was supported by Peruvians who attributed the defeat of the Shining Path and Peru’s economic recovery to Alberto Fujimori and favorably remembered his government’s social programs and public works. Especially amid the surge in crime in Peru (described in subsequent paragraphs of this section), the promise of an “iron fist” resonated. Keiko was the runner-up in the 2011 and 2016 elections and, between the two elections, worked vigorously to build the party at local levels, leading to impressive results in the 2016 legislative election. At the same time, Keiko was feared by Peruvians who remembered her father’s authoritarianism and corruption.
Peru’s strongest interest groups were its business confederations. The most powerful was the Confederation of Private Entrepreneurial Institutions (Confiep). Founded in 1984, in the 2010s Confiep comprised more than 20 business organizations, including the especially influential associations representing extractive industries and financial services. Confiep enjoyed powerful support networks in public relations firms, the media, and think tanks and influenced key government appointments.
By contrast, grassroots organizations were atomized; they were often strong at the local level but were rarely able to collaborate and develop national-level organizations (Vergara, 2015). One exception was the Indigenous Association for the Development of the Peruvian Amazon (AIDESEP), representing the Amazonian indigenous people. Yet, even AIDESEP remained unconnected to any political party (Gustafsson, 2018, p. 53). The challenges to national-level popular organizations in Peru included the withdrawal of collective rights in Peru’s 1993 constitution and the Shining Path’s assassination of leftist leaders and its discredit of leftist ideologies.
Another important force was illegal: the drug trade. Since the 1980s, Peru and Colombia have vied as the world’s largest cultivators of coca. In Peru, most coca is grown on the eastern slopes of the Andean mountains; in the 2010s, the area of greatest cultivation has been the Valley of the Apurímac, Ene, and Mantaro Rivers (VRAEM), on the eastern slopes of Peru’s central and southern highlands. In United Nations estimates, the area under cultivation between 2010 and 2015 was between 40,000 and 60,000 hectares (UNODC, 2016). Peru’s coca and cocaine are shipped out of Peru through its ports, headed north to the United States, or by air or land east to Bolivia, Brazil, and Europe. Revenues were immense. For example, in 2012, just one of many money launderers active in the VRAEM was charged with laundering more than $100 million (Bajak & Salazar, 2012).
It was in the VRAEM that, in the 2010s, remnants of the Shining Path endured; about 300 armed Shining Path fighters remained active there (Soberón, 2014, p. 29). Although the Shining Path continued to proclaim ideological goals, it was deeply enmeshed in the narcotics trade. Peru’s security forces regularly launched raids into the VRAEM and achieved drug busts, but the challenge often seemed Sisyphean.
As in many Latin American countries, the drug trade led to an explosion of other kinds of organized crime, such as extortion and cell phone theft rings. Although homicide rates were lower in Peru than in most Latin American countries, crime rates were considerably higher; in 2014, 31% of Peruvians reported that they had been the victim of a crime in the past year (Gurney, 2014). All too often, organized crime contaminated soldiers, police, and judges.
And, all too often, organized crime contaminated politicians. Drug traffickers sought influence among local and national authorities in order to secure the safe transit of drugs, to launder money, and to gain favorable judicial rulings; politicians wanted drug traffickers’ money for their campaigns. Of the 25 regional governors elected in 2006, eight years later 11 had either been jailed for corruption or had fled, often on drug-related charges (Crabtree & Durand, 2017, p. 145).
Within this context—strong business groups and weak social movements amid continuing demands for greater social justice but also fears of a return to the traumas of the 1980s and 1990s—Peru’s presidents campaigned at the center-left but governed at the center-right. In part as a result, their approval ratings were usually below 30%.
The 2001 election was won by Toledo, who had become popular for standing up to Fujimori. He became Peru’s first president of indigenous descent since 1931. Toledo took important steps to support Peru’s return to democracy. As mentioned above, Peru’s decentralization was achieved. The Commission for Truth and Reconciliation was appointed; it produced a detailed and rigorous report on the political violence of the 1980s and 1990s. More than 1,000 Fujimori-era officials were investigated for corruption and human-rights violations; Montesinos was convicted on several charges and imprisoned, and Fujimori’s extradition was requested. However, throughout Toledo’s government, personal scandals took a toll.
In the 2006 election, winning the runoff by five points, Alan García staged a surprising comeback. Despite García’s past record of statist economic policies and his 2006 campaign slogan of “responsible change,” implying some center-left reforms, García’s government was exceptionally business-friendly. Peru’s economic growth was strong, but social conflicts, such as the tragic events in Bagua, were intense. An important success of the government was a ruling by the International Court of Justice at The Hague that gave Peru a broad swath of ocean that had belonged to Chile.
The 2011 elections were won by a candidate whose campaign positions were to the left of his predecessors’: Ollanta Humala. A retired mestizo army officer, Humala had come to Peruvians’ attention through political rebellions in the early 2000s. Never having held political office, in the 2006 election he campaigned as an outsider, aggressively confronting Peru’s traditional elites and enjoying the backing of Hugo Chávez, and finished second. For the 2011 election, Humala moderated dramatically (Levitsky, 2011), emphasizing that his political model was Brazil’s Lula and that his priority would be stronger social programs.
As president, Humala fulfilled some of his promises; as indicated above, social inclusion improved considerably. Pensions for needy seniors, university scholarships for deserving students, and day-care programs for pre-school children were all established. Also, the minimum wage was increased and Peru’s conditional cash transfer program was expanded. However, Humala did not fulfill other promises. As noted above, for example, he backtracked on the effort to require dialogue between extractive companies and nearby communities. He failed to reduce organized crime and corruption. Like Toledo, Humala suffered strident personal criticism, probably in part because he was not among Lima’s traditional European elites.
The Rise and Fall of Pedro Pablo Kuczynski, 2016–2018
In 2018, Pedro Pablo Kuczynski, usually called PPK, became Peru’s first post-2000 president to not finish his term. Yet, despite the interruption of the presidential term and a set of explosive scandals, Peru’s democracy appears intact.
Kuczynski’s electoral victory was extremely narrow. Whereas at the time of the election of Peru’s other post-2000 presidents, they were perceived as center-leftists, PPK was perceived as a center-rightist; he was a 77-year-old international investment banker and former U.S. citizen who had served as Toledo’s prime minister. In the first round, PPK tallied only 21%; in the runoff, he defeated Keiko by a mere 0.24%. He owed his victory to a strong endorsement from the leftist Broad Front, which had tallied 19% in the first round and feared Fujimori’s authoritarianism.
Exacerbating the weakness of PPK’s mandate was that his second-place victory in the first round was enabled by the disqualification of a candidate, Julio Guzmán, just after he had surged past PPK in the polls. Guzmán hailed from Peru’s interior and had won scholarships for graduate degrees at U.S. universities; he was perceived to be at the center-left. Guzmán’s disqualification was strongly criticized by the OAS secretary general, Luis Almagro, and many others, but it stood.
The legislative election was also problematic. PPK’s Peruvians for Change gained only 14% of the seats. By contrast, the Fujimorista party, re-named Popular Force, won 36% of the legislative vote and, due primarily to the effects of the D’Hondt proportional representation formula, 56% of the seats (Dargent & Muñoz, 2016, p. 151). Keiko was angry at her second presidential loss, and Popular Force obstructed PPK at every turn.
In late 2017, PPK was engulfed in the Odebrecht corruption scandal. In a plea bargain, Odebrecht’s representative in Peru provided evidence of his company’s illegal campaign financing for all the major 2006 and 2011 candidates; the scandal culminated in criminal investigations of all four presidents elected since 2001 (Toledo, García, Humala, and PPK), as well as Keiko.
PPK denied dealings with Odebrecht, but evidence of Odebrecht’s payments to one of PPK’s companies emerged. In December, PPK barely survived an impeachment vote. Soon after the vote, he pardoned Alberto Fujimori, and it was immediately suspected that PPK had promised the pardon to Fujimori’s son, Kenji, in return for votes against impeachment. In March 2018, as another impeachment vote loomed, a videotape showed Kenji and PPK allies trying to bribe a legislator for his vote against impeachment. Amid this videotape, PPK had no chance to survive, and he resigned.
In an orderly and constitutional succession, PPK’s first vice-president, Martín Vizcarra, became president. The 2011–2014 Governor of Moquegua, Vizcarra was attentive to the development of Peru’s regions. In August, yet another corruption scandal exploded. Audiotapes showed that members of Peru’s National Council of the Magistrature, which appoints Peru’s judges, prosecutors, and electoral authorities, were guilty of influence-peddling; Keiko was implicated. In response, Vizcarra advanced political reform proposals; in a referendum, they enjoyed broad support.
Vizcarra was perceived to be steadfast against corruption, and his approval rating soared over 50%—in the stratosphere for a Peruvian president after six months. At the same time, as the Fujimorista party opposed Vizcarra’s popular reforms, it was perceived as obstructionist; amid declining support for the party, defections mounted. Vizcarra’s position strengthened further—but his own party remained tiny and his success dependent upon perceptions of his integrity and commitment.
In the 21st century, Peru has come a long way. In the 20th century, in large part due to Peru’s geography and colonial history, socioeconomic divides were deep; economic growth was disappointing, violent conflict was intermittent, and stable democracy elusive. But in the 21st century, despite immense ongoing challenges—in particular economic dependency and the drug trade, with its very negative effects on organized crime and corruption—Peru has maintained solid levels of economic growth, peace at home and with its neighbors, and democracy. In 2018, Peru appeared to weather a tsunami of corruption scandals.
However, Peru’s advance toward socioeconomic inclusion was modest. For the first time, perhaps, Peruvians saw the possibility of a cohesive nation—but this outcome was far from certain. Further, in recent years, the international context has changed dramatically. Peru’s achievements are fragile.
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