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Rural
Stagnation and Social Mobilisation (1945-68)
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), a liberal and prominent international jurist, was
overwhelmingly elected president as a
candidate for the Frente Democratico Nacional, a moderate, left-of-center
party that aligned itself with the now legal APRA, controlling
18 out of 29 seats in the Senate and 53 out of 84 in the Chamber of
Deputies.
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 characterised
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 labour unrest that ultimately destabilised 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 organised by elements of APRA broke
out in 1948, the military, under pressure from the oligarchy, overthrew
the government and installed General Manuel A. Odría hero of the 1941
war with Ecuador, as president. José Luis Bustamante y Rivero (1894
- 1989) later became Member of the International Court of Justice (ICJ)
in The Hague from 1961 to 1970, and - being the first Latin American in
this position - acted as ICJ’s President between 1967 and 1970.
Odría’s
Personalistic Dictatorship
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 labour 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.
Not all Peruvians, however, benefited from this
period of sustained capitalist development, which tended to be regional
and confined mainly to the more modernised 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 modernising forces operative on the
coast ever since the 1920s. With income distribution steadily worsening,
the “Sierra” experienced a period of intense social mobilisation
during the 1950s and 1960s.
Intensification
of Rural-Urban Migration
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 labour market from a
state of chronic historical scarcity to one of abundant surplus. With
arable land constant and locked into the system of “latifundios” (large
“semi-feudalistic” estates), 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” (value
exchange ratio) 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” (shantytowns) of urban migrants, putting
pressure on the liberal state, long accustomed to ignoring the funding
of government services to the poor.
Peasant Mobilisation in the “sierra” and New Political Parties in
Lima
Those peasants who chose to remain in the
“Sierra” did not remain passive in the face of their declining
circumstances but became increasingly organised 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, mobilised
peasants in a militant confrontation with local “gamonales.”
While economic stagnation prodded peasant mobilisation in the Sierra,
economic growth along the coast produced other important social changes.
The post-war period of industrialisation, urbanisation, 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. Emphasising modernisation and development within a somewhat
more activist state framework, they posed a new
challenge to the old left, particularly APRA.
Haya
de la Torre – Triumph and Defeat
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, 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. Almost inevitably, the army took
control, annulled the elections, and denied Haya de la Torre and
Belaunde the opportunity of power for another year. 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.
Fernando
Belaúnde Terry – Developmentalist Optimism
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, colonisation
projects in the high jungle or “montaña,” and the construction of
the north-south Jungle Border Highway (the “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 1964, 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.
Growing
Social Unrest
In this context of increasing mobilisation and radicalisation, 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 Peruvian currency (Sol) against the USD 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 the La Brea y Pariñas oil fields in
northern Peru. With public discontent growing, the armed forces, led by General
Juan Velasco Alvarado, overthrew the Belaúnde government on 03
October 1968 and proceeded to undertake an unexpected and unprecedented
series of reforms.
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