History of 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. Sánchez Cerro and then General Benavides led another period of military rule during the turbulent 1930s.

In the presidential election of 1931, Sánchez Cerro (1931- 33), capitalizing on his popularity from having deposed the dictator Leguía, 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 Letícia region of the Amazon. Before it could be settled, Sánchez Cerro was assassinated in April 1933 by a militant Aprista, and Congress quickly elected former president Benavides to complete Sánchez Cerro's five-year term. Benavides managed to settle the thorny Letícia 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 Sánchez 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 Sánchez Cerro and Antonio Miró 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 Río Marañón, and thus without direct access to the Atlantic Ocean. In an effort to assert its territorial claims in a region near the Río Marañón in the Amazon Basin, Ecuador occupied militarily the town of Zarumilla along its southwestern border with Peru. However, the Peruvian Army (Ejército 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. José 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. Odría (1948-50, 1950-56), hero of the 1941 war with Ecuador, as president.

Rural Stagnation and Social Mobilization, 1948-68

Odría 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 Odría 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, Odría'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. 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 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 Convención 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 (Acción Popular--AP) and the Christian Democratic Party (Partido Demócrata 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 Belaúnde 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 Belaúnde by less than one percentage point in the 1962 elections. A surprisingly reform-minded junta of the armed forces headed by General Ricardo Pérez Godoy held power for a year (1962-63) and then convoked new elections. This time Belaúnde, in alliance with the Christian Democrats, defeated Haya de la Torre and became president.

Belaúnde'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. Belaúnde tried to diffuse the growing unrest in the highlands through a three- pronged approach: modest agrarian reform, colonization projects in the high jungle or montaña, 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 (Unión Nacional Odriísta--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, Belaúnde 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, Belaúnde, 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.

Belaúnde'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 Belaúnde 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 Pariñas oil fields in northern Peru. With public discontent growing, the armed forces, led by General Velasco Alvarado, overthrew the Belaúnde government in 1968 and proceeded to undertake an unexpected and unprecedented series of reforms.

Peru History Contents

SOURCE: Area Handbook of the US Library of Congress