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Peru The García Government, 1985-90
By 1985 García and APRA were well-positioned to win the
presidential elections. García 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 Perú,"
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, García
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. García defeated
Alfonso
Barrantes of the IU, taking 47.8 percent of the vote
versus 22.2
percent for the IU (see
table 19, Appendix). 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. García enjoyed unprecedented popularity ratings
of over
75 percent, owing in part to his populist personality and
oratorical talents, and in part to the concertación
strategy the government pursued
(see The Search for New Directions
, ch. 3). 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
García and his concertación strategy cautious
support.
By mid-1987 it was clear that concertación had
run its
course, and a change of emphasis was necessary. At the
same time,
García 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. García 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, García 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 Sánchez, learned of the measure
just
prior to García's announcement, and he was told by none
other
than former president Belaúnde. 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 García 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 García 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 García'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
García's
cause. The private sector withdrew its plans for
investment as
economic policy-making fell prey to political infighting
in APRA
and to García's own erratic behavior. In September 1988,
the time
when an austerity package was announced, García 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
(see Changing Threats to National Security
, ch. 5). In the
context of political violence and economic disorder,
criminal
violence also surged
(see Crime and Punishment
, ch. 5).
Data as of September 1992
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