Homework 9- NEED IN 3 HOURS!!

NEOCOLONIALISM, THE MILITARY, AND INDIGENOUS RESISTANCE 401

But the Peruvian experience was the culmi- nation of historical events that had long character- ized the entire Andean region. As elsewhere on the continent, Andean reformist movements fused the effort to modernize with the struggle for greater so- cial justice for the masses: economic sovereignty, industrialization, and land reform. But the pres- ence of large, compact indigenous groups, ranging from some 70 percent of the population of Bolivia to about 40 percent of the populations of Peru and Ecuador, gave a distinctive character to these na- tionalist movements. Still another common fea- ture of the Andean struggle was the leading role played by nationalist military offi cers, who, fear- ing autonomous indigenous rights and militant working-class movements, sought to contain them by advancing a moderate corporatist reform agenda rooted in the idea of a mestizo nation. Mili- tary cor poratism gave indigenous, peasant, and working-class communities representation in the affairs of state but simultaneously denied them power by requiring them to subordinate their re- spective racial and class interests to serve an ideal- ized nation-state that protected all sectors of society equally. The historical origins of military corporat- ism lay in early-twentieth-century struggles over land, indigenous rights, and international capital- ist development.

Neocolonialism, the Military, and Indigenous Resistance The War of the Pacifi c left a heritage of political and social turbulence as well as economic ruin. Military caudillos and civilian leaders in Peru dis- puted one another’s claims to power and mobilized montoneros (bands of guerrillas and outlaws) for their armed struggles. In some areas, the indig- enous peasantry, having acquired arms during the war with Chile, rose in revolt against oppressive hacendados and local offi cials. Banditry was rife in parts of the sierra; on the coast, factions armed by landowners or their agents fought among them- selves for control of irrigation canals or over prop- erty boundaries.

From the struggle for power the militarists once again emerged victorious: in 1884, Andrés Cáceres battled his way into Lima; seized the Na- tional Palace; and initiated a slow, painful process of economic recovery. His fi rst concern was the huge foreign debt. In 1886 his government ne- gotiated the so-called Grace Contract with British bondholders. This agreement created a Peruvian Corporation, controlled by the British bondhold- ers, that assumed the servicing of Peru’s foreign debt and received in exchange Peru’s railways for a period of sixty-six years. The agreement confi rmed British fi nancial domination of Peru but also ini- tiated a new fl ow of investments that hastened the country’s economic recovery. Particularly important was the resulting rehabilitation of the railways and their extension to important mining centers, especially into La Oroya, whose rich silver, zinc, and lead mines began to contribute to the eco- nomic revival.

Economic recovery strengthened the political hand of the planter aristocracy and the commercial bourgeoisie, who were increasingly impatient with the military caudillo’s unpredictability. In 1895 their leader was the fl amboyant Nicolás Piérola, who sought to bring the military under civilian control and led a successful revolt against Cáceres. Piérola presided over four years of rapid economic recovery. On the coast, he promoted an intensive “modernization” that expanded sugar plantations at the expense of small landholders and indigenous communities. In the Andes, the economic revival spurred a renewed drive by hacendados to acquire indigenous communal lands, a drive extended to regions hitherto free from land-grabbing. An 1893 law, which effectively reenacted Bolívar’s decree concerning the division and distribution of com- munal lands, facilitated the process of land acquisi- tion. In this period there also arose a new contract labor system, the enganche, designed to solve the labor problem of coastal landlords now that Chi- nese contract labor was no longer easily available. By this system, indígenas from the sierra were forc- ibly recruited for prolonged periods to labor on coastal haciendas, sometimes under conditions of virtual serfdom.

402 CHAPTER 16 STORM OVER THE ANDES

INDIGENOUS RESISTANCE

The War of the Pacifi c had a similarly catastrophic impact on Bolivia, which it left landlocked and deprived of revenues from rich deposits of ni- trates and copper. Bolivia’s national government remained discredited and weak, rendering local landlords still more powerful. Here also, however, indigenous struggles unfolded within the histori- cal context of racial, class, and gender confl icts unleashed by foreign investment, transatlantic market growth, and dependent capitalism. During the late nineteenth century, highland indigenous communities had agreed to pay tribute and provide

seasonal labor services to Hispanic hacendados in exchange for their recognition of indigenous com- munal land rights, but the lure of larger profi ts pro- duced by a growing market demand for exports led them to expand their haciendas at the expense of the indígenas.

As a result, in the early twentieth century, the caciques apoderados, an armed indigenous move- ment, spread throughout the Andean highlands. These indigenous rebels defended their community lands and cultural traditions in violent uprisings like the 1921 Aymara Rebellion and the Cha- yanta Rebellion of 1927, which together mobilized thousands of peasants. This rural ferment, further

The Rumi Maqui movement drew upon a long tradition of indigenous resistance to assert traditional communal values in the face of an aggressive expansion of the mining industry, large plantations, and commercial agriculture in Peru and Bolivia. [From “South of Panama” (New York: The Century Company, 1915), by Edward Alsworth Ross]

NEOCOLONIALISM, THE MILITARY, AND INDIGENOUS RESISTANCE 403

complicated by growing worker unrest in Bolivian mines, factories, and urban centers, where a na- scent women’s movement also became active, led to greater collaboration among the army, landed oligarchs, and their foreign allies.

The aftermath of the War of the Pacifi c also saw the birth of a new sensitivity to the social struggle of indigenous peoples in Peru. The rise of this indigenismo among intellectuals was closely connected with the crisis of conscience caused by this disastrous war. By exposing the incompetence and irresponsibility of a creole elite that had totally failed to prepare materially and morally, the war led many intellectuals to turn to the indigenous peasantry as a possible source of national regen- eration. At the University of San Marcos in Lima, there arose a generation of teachers who rejected the traditional positivist, racist tendency to brand Indians as inherently inferior. The alleged apa- thy, inertia, and alcoholism of indigenous peoples, these scholars claimed, resulted from the narrow, dwarfed world in which they were forced to live. But as a rule, these bourgeois reformers ignored the economic conditions of indigenous peoples and focused on a program of education and uplift that would teach them ways to enter the new capitalist society.

The great iconoclast Manuel González Prada (1848–1918) rejected this gradual, reformist ap- proach to the problem. “The Indian question is an economic and social question rather than one of pedagogy,” he wrote. Schools and well-intentioned laws could not change a feudal reality based on the economic and political power of the gamona- les (great landowners), lords of all they surveyed. Elimination of the hacienda system, therefore, was needed to rescue indigenous people. But, accord- ing to González Prada, that change would never come through the benevolence of the ruling class: “The Indian must achieve his redemption through his own efforts, not through the humanity of his oppressors.” He consequently advised them to spend on rifl es and cartridges the money they now wasted on drink and fi estas. His powerful indict- ment of the oppressors of indigenous peoples, his faith in their creative capacity, and his rebellious

spirit, expressed in prose that fl owed like molten lava, profoundly infl uenced the next generation of intellectuals.

For their part, indigenous highland commu- nities, whose passive resistance to the gamonales’ encroachment on their lands and autonomy the intellectuals had mistaken for laziness and apathy, now openly rebelled. Sparked by indigenous lead- ers like Teodomiro Gutiérrez Cuevas, the Rumi Maqui movement, a millenarian insurrection that swept like wildfi re through southern Peru and the central sierra between 1915 and 1930, proclaimed the restoration of Tawantinsuyu, the fabled empire of the great Inca kings.

THE LEGUÍA REGIME: NORTH AMERICAN INVESTMENT AND PERUVIAN DISILLUSIONMENT

Integration of indigenous peoples was Peru’s grav- est social problem, but the rapid economic advance that began under Piérola produced the emergence of a working class whose demands also threat- ened the peace and security of the ruling class. By 1904 an organized labor movement had arisen, and strikes broke out in Lima’s textile mills and other factories. In 1918, during World War I, min- ers, port workers, and textile workers, respond- ing to a catastrophic infl ation of food prices, went on strike. Armed clashes took place between the strikers and the troops sent out to disperse them, and many strikers were arrested. News of the suc- cess of the Russian Revolution contributed to the workers’ militancy. This movement culminated in a three-day general strike in January 1919; the workers demanded the implementation of cur- rently unenforced social legislation, the reduction of food prices, and the imposition of the eight-hour workday. Under pressure from the workers, the government granted some demands, including the eight-hour day for the manufacturing and extrac- tive industries. The labor struggles of that stormy year merged with the struggle of university stu- dents for the reform of an archaic system of higher education that made the university the preserve of a privileged few and denied students any voice in determining policies and faculty appointments.

404 CHAPTER 16 STORM OVER THE ANDES

But sections of the oligarchy were convinced that this new and unstable political and social at- mosphere required a different way of ruling. An astute businessman and politician, Augusto B. Leguía, offered a new Caesarist political model that combined unswerving fi delity to the domi- nant domestic and foreign interests with severe repression of dissidents and a demagogic nation- alist reform program designed to disarm workers and achieve class peace. In July 1919 he seized power and established a personal dictatorship that lasted eleven years (1919–1930).

Leguía encouraged by every means at his disposal the infl ux of foreign—especially North American—capital. This was the cornerstone of his economic policies. Oil and copper were major fi elds of North American investment in Peru in this period. The fruits of Leguía’s policy of opening the doors wide to foreign capital soon became evi- dent. In 1927 a vice president of the First National City Bank wrote that “Peru’s principal sources of wealth, the mines and oil-wells, are nearly all foreign-owned, and excepting for wages and taxes, no part of the value of their production remains in the country.” Perhaps the most scandalous example of Leguía’s policy of giving away Peru’s natural resources was his cession of the oil-rich La Brea–Pariñas fi elds to the International Petro- leum Company (IPC), a subsidiary of Standard Oil of New Jersey, in return for a minimal tax of about 71 cents a ton. This cession and a 1922 arbitral award confi rming the dubious claims of an English oil company, whose rights had passed to the IPC, became an abiding source of Peruvian nationalist resentment.

Peru under Leguía received a plentiful infu- sion of North American loans, amounting to about $130 million. The bankers were aware of the risks involved, but the prospects of extremely large prof- its made these transactions very attractive. A trail of corruption, involving Leguía’s own family, fol- lowed these deals; Leguía’s son Juan, acting as an agent for Peru, received more than half a million dollars in commissions.

Leguía used the proceeds of these loans and the taxes on foreign trade and foreign investment

operations for a massive public works program (in- cluding a large road-building program carried out with forced indigenous labor) that contributed to the boom of the 1920s. During those years, Lima was largely rebuilt, provided with modern drink- ing water and sanitation facilities, and embellished with new parks, avenues, bank buildings, a race- track, and a military casino. But these amenities did not improve the living conditions of Andean peoples or dwellers in the wretched barriadas (shantytowns) that began to ring Lima.

Convinced that the threat of communism re- quired some concessions to the masses, however, Leguía did make some gestures in the direction of reform. The constitution of 1920 had some strik- ing resemblances to the Mexican constitution of 1917. It declared the right of the state to limit property rights in the interest of the nation, vested ownership of natural resources in the state, and committed the state to the construction of hospi- tals, asylums, and clinics. It empowered the gov- ernment to set the hours of labor and to ensure adequate compensation and safe and sanitary con- ditions of work. It also offered corporate recogni- tion of indigenous communities, proclaimed their right to land, and promised primary education to their children. But these and other provisions of the constitution were, in the words of Fredrick Pike, a “model for the Peru that never was.”

That same contrast between promises and performance marked Leguía’s labor policy. Dur- ing his campaign for the presidency, he denounced “reactionaries” and made lavish promises to the workers. Indeed, on seizing power in July 1919, he immediately freed the labor leaders imprisoned under Pardo. He also permitted a congress of work- ers to meet in Lima in 1921 and form a Federa- tion of Workers of Lima and Callao. But when the labor movement began to display excessive inde- pendence, he intervened to crush it. Workers were forced to accept token reforms and a program of government- and church-sponsored paternalism, crumbs from the well-laden table of the wealthy.

Leguía’s performance was especially disillu- sioning to the university students. Impressed by his promises of educational reform, they had pro-

NEOCOLONIALISM, THE MILITARY, AND INDIGENOUS RESISTANCE 405

claimed him “Mentor of the Youth” and supported his presidential campaign in 1919. But once in power, he sought to drive a wedge between stu- dents and workers, jailing student leaders and out- lawing the Popular University of González Prada, organized by the students to provide workers with political education. Frequent jailings and deporta- tions of dissident journalists and professors brought Leguía into chronic confrontation with students and faculty, who often went on strike, while the University of San Marcos was repeatedly closed down by the government.

The fl edgling women’s rights movement also fragmented during the Leguía dictatorship. In 1914, María Jesús Alvarado Rivera had cre- ated Evolución Feminina, a journal devoted to the cultivation of cross-class, interracial alliances in pursuit of women’s liberation and social justice. But patrician women refused to join these mixed- race organizations. According to Carrie Chapman Catt, the U.S. feminist and president of the Pan- American Women’s Suffrage Alliance, “the pure Castillian woman would die before she moved equally herself with those of color.” As a result, an aristocratic Peruvian National Women’s Council supported Leguía, resisted broader social reforms, and largely favored enfranchisement of literate women because it would strengthen their elit- ist cause. Radicals like Alvarado and Magda Por- tal soon abandoned this feminism dominated by “damas patrióticas civilistas” and joined the class struggle against Leguía.

INDIGENISMO AND SOCIALISM

The traditional oligarchical parties’ surrender to the dictator and the weakness of the young Peru- vian working class meant that the leadership of the opposition to Leguía fell to middle- and lower- middle-class intellectuals who sought to mobilize the peasantry and the workers for the achieve- ment of their revolutionary aims. Socialism, anti- imperialism, and indigenismo provided the ideo- logical content of the movement that issued from the struggles of the turbulent year of 1919, but in- digenismo was the most important ingredient.

Infl uenced by the revered González Prada, these intellectuals believed that the revolution necessary to regenerate Peru must come from the sierra, from the Andean indigenous peoples, who would destroy age-old systems of oppression and unify Peru again, restoring the grandeur that had been the Inca Empire. Common to most of the in- digenistas was the belief that the Inca Empire had been a model of primitive socialist organization, a thesis rejected by modern scholars. Although al- most all land in Peru was individually owned and worked by the 1920s, they also believed that the indigenous community had been and still was the “indestructible backbone of Peruvian collectiv- ity.” The mission of intellectuals, in their view, was to blow life into the coals of indigenous rebellion and link it to the urban revolution of students and workers.

An infl uential indigenista of this period was Luis E. Valcarcel, author of the widely read Tem- pest in the Andes (1927). In ecstatic prose, Valcarcel hailed indigenous revolts of the sierra as portents of the coming purifying revolution. A more impor- tant and systematic thinker, José Carlos Mariátegui (1894–1930), attempted the task of wedding in- digenismo to the scientifi c socialism of Marx and Engels. His major work was the Seven Interpretive Essays on Peruvian Reality (1928). Basing his the- ory on indigenous communal practices and tra- ditions, on the revolutionary experience of other lands, and on his study of history and economics, Mariátegui concluded that socialism offered the only true solution for the indigenous problems.

Like other indigenistas of his time, Mariátegui idealized the Inca Empire, which he regarded as the “most advanced primitive communist organi- zation which history records.” But he opposed a “romantic and anti-historical tendency of recon- struction or re-creation of Inca socialism,” for only its habits of cooperation and corporate life should be retained by modern scientifi c socialism. More- over, he stressed that the urban proletariat must lead the coming revolution. Before his untimely death, Mariátegui founded the Peruvian Socialist Party in 1928 and sought affi liation with the Com- munist International.

406 CHAPTER 16 STORM OVER THE ANDES

Indigenismo was a major plank in the program of the Alianza Popular Revolucionaria Americana (APRA), a party founded in Mexico in May 1924 by Victor Raúl Haya de la Torre and Magda Por- tal, student leaders who had been exiled by Leguía. Haya de la Torre proclaimed that APRA’s mission was to lead the indigenous and proletarian masses of Peru and all “Indo-America” in the coming so- cialist, anti-imperialist revolution. Despite the high- sounding rhetoric of Aprista propaganda, the party’s fi rst concern was, and remained, Peru’s middle sec- tor: artisans, small landowners, professionals, and small capitalists. These groups’ opportunities for development diminished as a result of the growing concentration of economic power in Peru by for- eign fi rms and a dependent big bourgeoisie.

In a revealing statement in the mid-1920s, Haya de la Torre declared that the Peruvian work- ing class, whether rural or urban, lacked the class consciousness and maturity needed to qualify it for the leadership of the coming revolution. He as- signed that role to the middle class. To this opinion he joined a belief in the mission of the great man (himself) who “interprets, intuits, and directs the vague and imprecise aspirations of the multitude.” Portal’s view of Peruvian women was equally condescending: without APRA’s guidance, she insisted, they could not be entrusted with the vote because of their low “cultural level” and “unques- tioning dependence on masculine infl uence.”

Haya de la Torre early assumed an ambiguous position on imperialism. Refuting Lenin’s theory that imperialism was the last stage of capitalism, he argued that in weak, underdeveloped countries like Peru, imperialism was the fi rst stage. In effect, imperialism provided the capital needed to create industry, a powerful working class, and the middle class that ultimately would lead the nation in a socialist revolution. Switching from this position to the belief that imperialism must be encouraged and defended was an easy step for Haya de la Torre to take. Mariátegui, who was associated with Haya de la Torre in the student and labor struggles of the early 1920s, soon perceived the inconsistencies of his position and assailed APRA for its “bluff and lies” and its personalism. Despite, or precisely be-

cause of, its vague, opportunistic ideology, APRA managed to win over an important section of the Peruvian middle class, especially the students, during the three decades after 1920. It also gained great infl uence over some peasant groups and urban workers, whom it organized into unions that were its main political base.

APRA VERSUS THE MILITARY

The onset of a world economic crisis in 1929, which caused a serious decline of Peruvian exports and dried up the infl ux of loans, brought the collapse of the Leguía dictatorship. But neither the small Com- munist Party nor the stronger APRA movement was able to take political advantage of Leguía’s downfall. A cholo (i.e., indigenous) army offi cer, Luis Sánchez Cerro, seized power and became the dominant fi gure in a populist ruling military junta. Sánchez Cerro soon proclaimed the primacy of the indigenous problem, the need for agrarian reform through expropriation of uncultivated lands, and the aim of regulating foreign investments in the national interest. In effect, Sánchez Cerro had sto- len much of APRA’s thunder, to the annoyance of Haya de la Torre.

But the Apristas nonetheless launched an un- successful revolt in 1932 that led to mass execu- tions and the assassination of Sánchez Cerro. This created a vendetta between the army and APRA that helps explain the long, stubborn opposition of the Peruvian armed forces to APRA’s assump- tion of power, whether by force or peaceful means. More important, it enabled the fi nancial and landed oligarchy to consolidate its power. Thereafter, it courted foreign investors like the U.S.-based International Petroleum Company and promoted export production. But a stagnant economy en- sued due to low prices for the country’s chief ex- ports (copper, cotton, lead, and wool), a situation only temporarily relieved by growing demand and high prices during World War II (1939–1945) and the Korean war (1950–1953).

In the wars’ aftermath, however, Peru, de- spite modest development of its extractive mineral industry, remained a largely agricultural, export-

THE LIMITS OF POPULISM, 1952–1968 407

dependent country with a wealthy, powerful landed oligarchy, a weak and fragmented middle class, a marginalized indigenous peasant major- ity, and a largely unorganized and undeveloped urban working class. Nonetheless, APRA militants continued to agitate for policies designed to restore popular democracy, renew anti-imperialist strug- gle, and promote social justice. Largely infl uenced by the comandos femeninos, these policies included land reform; civil and political equality irrespective of race, class, or gender; and state regulation of for- eign investment. In 1955, Peruvian women fi nally won the right to vote, but little more. APRA’s male leadership, fearful of a growing lower-class power, increasingly abandoned women and their social justice issues to curry favor with landed elites.

Meanwhile the inequities of Peru’s income distribution continued to increase, as did collisions between large landowners and increasingly mili- tant, well-organized indigenous peasants. In some cases, peasants revolted against precapitalist labor systems (like the yanacona, which often required personal service); in others, violence arose because landowners tried to evict their indigenous tenants and sheep in favor of wage labor and cash rent sys- tems. These evictions increased landlessness and population pressure in indigenous communities, thereby accelerating the fl ow of highland emi- grants to the coast, where they swelled the popula- tion of city slums and shantytowns.

This fi rst generation of indigenous highland migrants, known as provincianos, now found themselves in a foreign environment, surrounded by hostile urban elites who ridiculed their rural lifestyles, scorned their racial origins, and limited their social, economic, and political opportunities. For hundreds of years, Peru’s criollo elite had pre- served its cultural authority and political power by institutionalizing a rigid race-based social hierar- chy that defi ned criollos as “white,” civilized, and superior; it likewise identifi ed indigenous peoples, mestizos, and blacks as inferior, barbaric, ignorant, and uncivilized. Not surprisingly, the new migrants sought to assimilate into their strange surround- ings by publicly emulating criollo culture even as they privately celebrated their various high-

land traditions. They settled together in barriadas (slums) or pueblos jóvenes (squatter communities) and often supported their families by opening small businesses in the informal sector, selling a broad range of commodities on street corners, or work- ing as domestic servants.

The Limits of Populism, 1952–1968

THE 1952 BOLIVIAN REVOLUTION

Against a similar background of indigenous con- fl icts with creole landlords and class warfare be- tween mineworkers and foreign mine owners, revolution was brewing in Bolivia during World War II. This was accelerated by the disastrous re- sults of the Chaco War (1932–1935), which dou- bled the size of Paraguay at the expense of Bolivia, whose army was disgraced. (See the map in Chap- ter 9, p. 210.) Even more problematic, however, was the Bolivian military’s desperate effort to force indigenous highland conscripts to fi ght in the hot, humid lowlands on behalf of a nation they did not recognize. This only exacerbated indigenous un- rest. In addition, the social turmoil unleashed by the global economic depression and the growing wartime domination of foreign mining companies, originally inspired by skyrocketing demand for Bo- livia’s strategic mineral raw materials, combined to alienate middle-class support for successive mili- tary dictatorships that had dominated the Bolivian State.

The last straw was the army’s 1942 Cataví massacre of unarmed striking miners and their families. Fearing greater social unrest, the mobi- lization of popular sectors, and its implications for their own power and property, middle-class activ- ists organized the National Revolutionary Move- ment (MNR) and led a massive protest that brought the reformist government of Gualberto Villaroel to power the following year. But Villaroel was assas- sinated three years later. Thereafter, during a six- year struggle, the MNR mobilized the countryside and urban centers. Women especially played a

408 CHAPTER 16 STORM OVER THE ANDES

signifi cant role: the Women Workers’ Federation (FOF) and the Barzolas, the MNR’s infamous fe- male “secret police” (named for María Barzola, a woman miner who died in the Cataví massacre), organized street demonstrations, hunger strikes, and other political protests.

By 1952 the MNR, led by Victor Paz Estens- soro, fi nally overthrew the rule of the great land- lords and tin barons with the support of armed miners and peasants. The Bolivian land reform, begun by the spontaneous rising of the peasantry and legitimized by the revolutionary government of President Paz Estenssoro, broke the back of the latifundio system in Bolivia. Like the Mexican land reform, however, the Bolivian reform created some new problems even as it solved some old ones. The former latifundia were usually parceled out into very small farms—true minifundia—and the new peasant proprietors received little aid from the gov- ernment in the form of credit and technical assis- tance. Yet, despite its shortcomings, the Bolivian land reform brought indisputable benefi ts: some expansion of the internal market; some rise in peas- ant living standards; and, in the words of Richard W. Patch, “the transformation of a dependent and passive population into an independent and active population.”

Women, workers, and indigenous communi- ties became politically energized. Women joined private charitable associations and international organizations like the Inter-American Women’s Commission (CIM) to agitate for the right to vote, civil equality, indigenous rights, and greater access to education. Lydia Gueiler Tejada, for example, ad- vocated “the free association of women in legitimate defense of her interests, without distinction of class, race, creed, or even political ideas.” Mineworkers, led by Juan Lechín, demanded nationalization of the tin mines and control obrero—workers’ control in the management of state-owned mines. Indige- nous communities called for immediate, wholesale land reform and greater cultural freedom.

In response, the new government nationalized the principal tin mines, most of which were con- trolled by three large companies, and recognized its debt to the armed miners by placing the mines

under joint labor-government management. It also abolished the literacy and gender restrictions on voting and thus enfranchised women and the indigenous masses. But the new regime inherited a costly, rundown tin industry, while the initial dis- ruptive effect of the agrarian reform on food pro- duction added to its economic problems.

Increasingly fearful of the lower classes’ revo- lutionary demands for equality and social justice, and under strong pressure from the United States, which made vitally needed economic aid to the revolutionary government conditional on the adoption of free-market policies, the MNR lead- ership gradually abandoned its populist agenda. The government of Paz Estenssoro offered gener- ous compensation to the former owners of expro- priated mines, invited new foreign investment on favorable terms, ended labor participation in the management of the government tin company, and reduced welfare benefi ts to miners.

Likewise, Paz abandoned any particular in- terest in women’s rights or their social agenda and, instead, cynically manipulated the party’s historic support for women’s enfranchisement to secure their votes. According to Domitila Bar- rios de Chungara, a militant activist in the mine- workers’ Committee of Housewives (CAC), Paz, who excluded women from leadership positions in the government, nonetheless used the Barzolas women to disrupt radical working-class protests: “The Barzolas would jump in front of them, bran- dishing razors, penknives, and whips, attacking the demonstrators.” But the largely middle-class male movement’s patriarchal prejudices clearly limited the political ascendancy of women revo- lutionaries like Gueiler Tejada, a militant feminist and one-time commander of MNR militias, whose political infl uence dissipated after she was assigned to a distant diplomatic post in Germany.

Paz also ignored the needs of Bolivia’s indig- enous peoples, which caused Laureano Machaka, an Aymara peasant leader opposed to the govern- ment’s policies, to organize a short-lived indepen- dent Aymara Republic in 1956. Equally important, Paz agreed to the restoration of a powerful U.S.- trained national army to offset the strength of

THE LIMITS OF POPULISM, 1952–1968 409

peasant and worker militias. These retreats broke up the worker–middle class alliance formed during the revolution, undermined populist reforms, and facilitated the military’s seizure of power in 1964.

In the violent ebb and fl ow of Bolivian poli- tics thereafter, a persistent theme was the confl ict among radical workers, women, and students on one side and a coalition of elite businessmen and politicians grown wealthy through U.S. aid on the other. The indigenous peasantry, neutralized by a populist agrarian reform that satisfi ed its land hunger, initially remained passive or even sided with the government in its struggles with labor, but later unrest began to grow as a result of dete- riorating economic conditions and a growing con- sciousness of their collective indigenous identity. Increasingly, the military intervened in Bolivian politics to resolve these confl icts and impose a so- cial stability through force of arms.

PERU’S BELAÚNDE: INDIGENISTA POPULISM AND BROKEN PROMISES

Following the lead of his populist neighbors to the east, Fernando Belaúnde Terry organized his presi- dential campaign in Peru with a decided indigeni- sta tinge. Visiting the remotest Andean villages, Belaúnde extolled the Inca grandeur, called on the natives to emulate the energy and hard work of their ancestors, and proclaimed the right of the landless peasantry to land. But his performance in the fi eld of agrarian reform did not match his promises. The agrarian law that issued from Con- gress the following year stressed technical im- provement rather than expropriation and division of latifundia, with the hope that hacendados would adopt modern methods to improve production. As amended in Congress by a coalition that included Apristas, the law exempted from expropriation the highly productive coastal estates, whose workers had been unionized by APRA, and reserved archaic hacienda lands in the sierra for redistribution. But the loopholes or exceptions were so numerous that the law produced very modest results.

Meanwhile, Belaúnde’s lavish promises had given great impetus to peasant land invasions. By

October 1963, invasions had multiplied in the cen- tral highlands and were spreading to the whole southern part of the sierra. The land-invasion move- ment also changed its character; whereas before the peasants had seized only uncultivated lands, they now occupied cultivated land, arguing that they had paid for it with their unpaid or poorly paid labor of several generations. Militant peasant unions under radical leadership appeared, and a guerrilla move- ment arose in parts of the sierra. Meanwhile, a wave of strikes broke out in the cities, and workers occu- pied a number of enterprises in Lima and Callao.

These outbreaks took the Belaúnde admin- istration by surprise. The hacendados, supported by APRA, demanded the use of the armed forces to repress the peasant movement. Indeed, APRA— once so “revolutionary”—called for the harshest treatment of the rebellious peasants. At the end of 1963, after some vacillation, the Belaúnde govern- ment decided to crush the peasant movement by force, a task the armed forces apparently assumed with reluctance, preferring “civic action” programs of a reformist type. According to one estimate, the repression left 8,000 peasants dead and 3,500 im- prisoned, 14,000 hectares of land burned with fi re and napalm, and 19,000 peasants forced to aban- don their homes.

Belaúnde had failed to solve the agrarian problem. He also failed to keep his promise to settle the old controversy with the International Petro- leum Company over the La Brea–Pariñas oil fi elds, which, Peru claimed, IPC had illegally exploited for some forty years. Finally, under strong pressure from U.S. interests, who delayed large planned in- vestments in Peru, Belaúnde’s government signed the Pact of Talara, which represented a massive surrender to the IPC. Peru regained the now al- most exhausted oil fi elds but in return agreed to the cancellation of claims for back taxes and illegal profi ts amounting to almost $700 million. IPC also received a new concession to exploit a vast area in the Amazon region and was allowed to retain the refi nery of Talara, to which the government agreed to sell all the oil produced from the wells it had re- gained at a fi xed price. A scandal rocked the coun- try when the government, forced to publish the

410 CHAPTER 16 STORM OVER THE ANDES

document, claimed to have “lost” the page setting the price that the IPC must pay the state oil com- pany for its crude oil. As public indignation grew, the armed forces, opposition parties, and even the Catholic Church denounced the agreement.

For Peru’s military leaders, this was the last straw. For some years, they had engaged in intense soul-searching over the past and future of their country; now they were convinced that Belaúnde’s government and the social forces that supported it had sold out the national interest and were inca- pable of solving Peru’s problems. In October 1968

the armed forces seized the presidential palace, sent Belaúnde into exile, and established a military governing junta that began a swift transformation of Peru’s economic and social structures.

Military Corporatism and Revolution, 1968–1975

THE PERUVIAN MILITARY ABOUT-FACE

Initially, the military seizure of power appeared to be another in the long series of military coups that punctuated the history of Peru and other Latin American countries—coups that changed the oc- cupant of the presidential palace but left the exist- ing order intact. However, under the leadership of General Juan Velasco Alvarado, the self-proclaimed “Revolutionary Government of the Armed Forces” quickly distinguished itself from this tradition. In- stead, it decreed laws that called for nationalization of oil, a sweeping agrarian reform, and workers’ participation in the ownership and management of industrial concerns.

Observers found these events as startling, in the words of Fidel Castro, “as if a fi re had started in the fi rehouse,” for the Latin American military had traditionally been regarded as loyal servants of the area’s oligarchies. But in Peru, a social and ideological gulf had been developing between the military and civilian elites for decades. Most army offi cers came from a military family or from the lower-middle class. These offi cers, fearing the rise of an autonomous, indigenous peasant and working- class radicalism, sought to protect and promote national capitalist development in Peru by shift- ing power from landed oligarchs, foreign investors, and their government representatives to a socially responsible state controlled by a nationalistic new bourgeoisie.

Within a week, the Velasco junta had nation- alized the IPC’s oil fi elds and its refi nery at Talara and soon after seized all its other assets. Having set- tled the IPC question, the junta went on to tackle the country’s most burning economic and social questions.

General Juan Velasco Alvarado led the Revolution- ary Government of the Armed Forces in 1968 and, invoking the immortal words of the revolutionary Inca Tupac Amaru, proclaimed to Peru’s impover- ished campesinos and indigenous communities that “the boss will now no longer eat from your poverty!” [AP Images]

MILITARY CORPORATISM AND REVOLUTION, 1968–1975 411

LAND REFORM AND NATIONALIZATION OF RESOURCES

Land reform was the key problem: Peru could not achieve economic independence, modernization, and greater social democracy without liquidat- ing the ineffi cient, semifeudal latifundio system, the gamonal political system that was its corollary, and the coastal enclaves of foreign oligarchical power. Major specifi c objectives were to expand agricultural production and to generate capital for investment in the industrial sector; thus, land- owners were to be compensated for expropriated lands with bonds that could be used as investment capital in industry or mining. On June 24, 1969, President Velasco announced an agrarian reform designed to end the “unjust social and economic structures” of the past. The program deviated from orthodox Latin American reform policies in two respects: fi rst, it did not retain the homestead or family-sized farm as its ideal, and second, it did not exempt large estates from expropriation on account of their effi ciency and productivity. Indeed, the fi rst lands to be expropriated were the big coastal sugar plantations, largely foreign-owned and constitut- ing highly mechanized agro-industrial complexes. These enterprises were transferred to cooperatives of farm laborers and refi nery workers.

Next came the turn of the haciendas in the sierra. The reform applied to most highland estates above 35 to 55 hectares and initially aimed to en- courage division of estates into small or medium- sized commercial farms, but this would have reduced the number of potential benefi ciaries. Under pressure from militant, unionized peasants, who were demanding employment and the forma- tion of cooperatives, the junta moved from parcel- lation toward cooperative forms of organization. Eventually, fully 76 percent of the expropriated lands were organized into cooperatives, with the remainder distributed in individual plots.

The agrarian reform produced some undeni- able immediate and long-range benefi ts. To begin with, it ended the various forms of serfdom that still survived in the sierra. Second, food production increased, though not substantially or to the level

required by Peru’s growing population. Third, ac- cording to a 1982 fi eld study of the agrarian reform, it “proved a major economic and political benefi t to a signifi cant sector of the peasantry,” at least in the case of cooperatives with an adequate capital en- dowment. “In such cooperatives, members’ wages and quality of life improved, often dramatically.”

But these gains were offset by the failure of the agrarian reform to improve the general material and political condition of the Peruvian peasantry— a failure stemming from incorrect planning and methods on the part of the well-meaning military reformers. First, the reform was neither as swift nor as thorough as the dimensions of the problem required. Delays in implementing the program and the ruses employed by landowners to evade it meant that a considerable amount of land escaped expropriation. As a result, the reform made only a slight impact on the problem of landlessness and rural unemployment and underemployment, es- pecially in the sierra.

Second, the military reformers lacked a coher- ent strategy for the general modernization of the agricultural sector within an overall plan of bal- anced, inwardly directed national development. Basically, they viewed the agricultural sector as a means of pumping out food and capital to promote development in the urban-industrial area. This was refl ected in the military government’s food- pricing policy, which aimed to keep food prices low to check infl ation and keep the urban working class and middle class content. In the absence of compensating subsidies for small farmers, this pol- icy “served to perpetuate the long-run unfavorable trend of the rural-urban terms of trade.” Within the agricultural sector, the allocation of resources and credit was skewed in favor of the already well endowed and effi cient coastal estates producing for export, with the bulk of agricultural investment going into large-scale irrigation projects. The mili- tary largely neglected the needs of highland small farmers for small-scale irrigation works, fertilizer, and technical assistance. As a result, the coastal sugar, cotton, and coffee cooperatives tended to be- come “islands of relative privilege in a sea of peas- ant poverty and unemployment.”

412 CHAPTER 16 STORM OVER THE ANDES

The same lack of a coherent strategy for the development of the agricultural sector as a whole was refl ected in the method of distributing haci- enda lands. The land was generally transferred to the workers who had been employed full time on the estates. They alone were eligible to be members of the new cooperatives. This left out the tempo- rary laborers and the neighboring peasant villag- ers who eked out subsistence livings from tiny plots and small herds of sheep. This often led to serious tension and confl ict, with the cooperatives defend- ing their privileges and land against invasions by the comuneros (peasant villagers). This pattern of distribution, and the failure to redistribute all the land subject to expropriation, contributed to the continuing fl ight of campesinos to the coastal cit- ies, where they swelled the ranks of a large unem- ployed or underemployed population.

Finally, a major fl aw of the agrarian reform was that it was a “revolution from above,” with little input from below. Despite lip service to par- ticipatory ideology, the military technocrats made the fi nal decisions with respect to work conditions, income policy, crop selection, and the like. Because the government’s economic policy tended to sub- ordinate peasant interests to the drive for rapid industrial growth, many peasants became disillu- sioned with the cooperative model. In some cases, particularly after 1975, when the nationalist re- formist Velasco wing of the military was ousted from power by a group stressing private enterprise and a free market, the disillusionment led to peas- ant demands for dismantling the cooperatives and parceling out the land.

After land reform, the nationalization of key foreign-owned natural resources was the most im- portant objective of the junta’s program. The junta also targeted domestic monopolies that the military regarded as obstacles to development. When the revolution began, foreign fi rms controlled the com- manding heights of the Peruvian economy. Eight years later, state enterprises had taken over most of these fi rms. The process began with the nation- alization of the IPC, whose assets passed into the control of Petroperu, the state-owned oil company. Later, the national telephone system, the railroads

(the Peruvian Corporation), and Peru’s interna- tional airline came under state ownership. The mil- itary government took over the cement, chemical, and paper industries and also nationalized the im- portant fi shmeal industry, in which foreigners had invested large amounts of capital. The sugar indus- try, in large part controlled by the Grace interests, and the cotton industry, dominated by a U.S. fi rm, Anderson-Clayton, were seized under the agrarian reform law. The 1974 nationalization of the giant U.S.-owned mining complex of Cerro de Pasco gave the state ownership of four thousand concessions and vested control of most copper, lead, and zinc mining and refi ning in two state companies, Mi- noperu and Centrominperu. Nationalization of Mar- cona Mining in 1975 gave the state control of iron ore and steel. In addition to the takeover of these primarily extractive and manufacturing fi rms, state companies obtained marketing monopolies of all major commodity exports and most food distri- bution. Through stock purchases, the government nationalized most of the banking and insurance industries. Thus, the state came to control decisive sectors of the Peruvian economy.

The original intent of the military reformers was not to substitute the state for local private capi- tal but to promote its formation. The military aimed to remove such impediments as the latifundio and foreign monopolistic fi rms even as it tried to create an industrial infrastructure fi nanced by mineral and agricultural exports. But the radical rhetoric of the nationalistic military only frightened the local bourgeoisie, who were generally satisfi ed with their technological and fi nancial dependence on foreign capital, and they failed to respond to the incentives for industrial investment. As a result, the govern- ment itself had to assume the role of the economy’s main investor and by 1972 accounted for more than half the total investment in the economy.

But the cost of this investment, added to the large sums expended for compensation for expro- priated estates and foreign enterprises, came very high. Tax reform offered one possibility of mobiliz- ing considerable amounts of previously untouched wealth. Such a move, however, would have an- tagonized the local bourgeoisie, whom the military

MILITARY CORPORATISM AND REVOLUTION, 1968–1975 413

was wooing, and the middle class, who formed its principal mass base. Because of disputes over ex- propriation, Peru could not apply for loans to the United States and the multinational agencies it controlled. Accordingly, Peru had to turn to for- eign private banks. Encouraged by the high price of copper and other Peruvian exports and by the prospect of rich oil strikes in the Amazon Basin, the banks willingly complied with Peru’s requests for loans. They lent $147 million in 1972 and $734 million in 1973, making Peru the largest borrower among Third World countries in the latter year.

Although women’s rights issues clearly were not a priority for the military regime, a new women’s movement, led by Virginia Vargas, founder of the Flora Tristán Peruvian Women’s Center, nonetheless emerged. These women were very active in grassroots neighborhood organiza- tions, unions, teachers’ associations, and social work agencies, which provided experience with collective action and heightened their conscious- ness of gender-based inequality. Under pressure from this women’s movement, the military adopted the eighteenth-century Inca revolutionary leaders, Micaela Bastidas and her husband, Tupac Amaru, as the symbols of their 1974 Plan Inca, which de- manded civil and political equality for women, laws against discrimination, affi rmative action in public employment, and rural education programs.

The military likewise had not intended to un- leash a cultural revolution, but its nationalist ide- ology mobilized popular political participation and reinforced artistic explorations of the country’s in- digenous and African roots. This led to a dramatic expansion of popular theater and folk music that challenged criollo cultural hegemony and deci- sively shaped a radically new multiracial Peruvian national identity. In the early 1970s, for example, Yuyachkani, a politically committed theater group that took its name from a Quechua word mean- ing “thoughts and memories,” sought to organize indigenous workers by touring highland mining communities and performing Fist of Copper. This was a play that drew on Spanish and European theatrical traditions to extol the virtues of popular resistance to violent police repression of a miners’

strike. During postperformance discussions, the young urban actors, who aimed to raise the con- sciousness of their indigenous audiences, instead learned about the long tradition of Andean indige- nous theater, which integrated dance, music, pup- pets, masks, and colorful costumes. These elements were later incorporated into plays that shared with highland peoples the “good news” about the 1969 land reform that gave them the legal authority to fi ght for their land against the landowners and their hired thugs. They also became very popu- lar in the universities, urban slums, and squatter settlements, where provincianos had migrated in search of jobs.

By early 1975, a new cyclical crisis had begun to ravage the capitalist world. Rising prices for oil and imported equipment and technology, com- bined with falling prices for Peru’s raw material ex- ports, undermined the fragile prosperity that had made President Velasco’s reforms possible. These circumstances created unmanageable balance- of-trade and debt service problems. The populist model of development based on export expansion and foreign borrowing had again revealed its in- herent contradictions.

The experience of the Peruvian Revolution shows the diffi culty of escaping from dependent development without radical structural changes in class and property relationships and income distribution. Like the Mexican Revolution, Peru’s experience suggests that the revolution that does not advance risks stagnation and loss of whatever gains have been made. Contemporaneous events in Ecuador reinforced this conclusion.

ECUADOR’S MILITARY REVOLUTION

The military also played a prominent role in Ecua- dor, the smallest of the Andean republics, which experienced the faint beginnings of a social revolu- tion in 1972. A group of nationalist military headed by General Guillermo Rodríguez Lara ousted the aging, demagogic President José María Velasco Ibarra, who had dominated Ecuadorian politics for the previous four decades. Velasco Ibarra had fa- vored a dependent industrialization, shaped by the

414 CHAPTER 16 STORM OVER THE ANDES

Alliance for Progress and based on massive impor- tation of foreign capital and goods. This program rested on the 1964 Agrarian Reform Act, which abolished the huasipungo, the country’s serfl ike labor system, and expropriated church lands and ineffi cient haciendas but also promoted coloniza- tion of so-called tierras baldías, untitled lands that were mostly occupied by self-suffi cient indigenous communities. The discovery of oil in lowland terri- tories in the late 1960s accelerated incursions into indigenous lands and cultural autonomy, even as petroleum production threatened the environment by contaminating surface and underground water supplies. By the early 1970s, foreign interests were as dominant in Ecuador as in Peru and Bolivia; they controlled some 35 percent of all industrial enter- prises, nearly 60 percent of all commercial enter- prises, and half of all banking assets in Ecuador.

Promising radical land and social reforms, the new nationalistic military junta offered a program of rapid economic development that stressed indus- trialization and the modernization of agriculture. It also promised to reverse previous offi cial policy that surrendered the country’s rich oil resources in the Amazonian lowlands to foreign companies. The new government counted on revenue from oil to fi nance the planned reforms and program of eco- nomic development.

Five years later, however, the Ecuadorian Rev- olution stalled. Opposition from the still-powerful hacendado class had almost completely paralyzed agrarian and tax reform. There was modest land distribution to peasants, but big landowners still controlled 80 percent of the cultivated area. The military government virtually abandoned land redistribution in favor of cooperation with hacen- dados to increase production and state revenues through mechanization, greater concentration of land ownership, and the ouster of peasants from the land. The result was growing peasant agitation for true land reform, accompanied by invasions of estates and clashes between peasants and security forces.

Finally, under pressure from foreign oil com- panies for lower taxes and wider profi t margins— a pressure exerted through a boycott on oil

exports—the military regime also retreated from its insistence on tight control over prices, profi ts, and the volume and rate of oil production. These concessions represented a defeat for nationalist elements in the military junta and sharpened the divisions within it.

In Ecuador, as in other Latin American coun- tries under military control, the late 1970s saw a growing popular movement for social justice and a return to civilian rule. But unlike other countries in the region, groups like the Indigenous People’s Organization of Pastaza (OPIP), founded in 1979, increasingly played an infl uential role in these movements, joining with women’s rights activ- ists and trade unionists. In addition to a return to democracy, indigenous leaders demanded that the government recognize their communal land titles, cultural identities, and political autonomy.

Ecuador’s military leaders were aware of their economic failures and especially their failure to relieve the dismal poverty and social inequality suffered by the Ecuadorian masses. According to offi cial fi gures, wage earners’ share of national in- come had declined from 53 percent in 1960 to less than 46 percent in 1973. However, 7 percent of the population received more than 50 percent of the national income. Consequently, the military ap- peared quite willing to abandon the burden of gov- erning the country. In July 1978, Jaime Roldós, a populist candidate, handily won the ensuing presi- dential election. During the campaign, the young, energetic Roldós promised to revive agrarian re- form and end foreign economic control.

Central to this program was the use of large amounts of Ecuador’s oil earnings to modernize ag- riculture, promote industrialization, and construct a network of roads to expand the internal mar- ket. Roldós’s fi ve-year plan called for investment of $800 million in rural development that would bring some 3 million acres of coastal, highland, and Amazonian farmland into new production. He also aimed to accelerate the pace of agrarian reform, targeting almost 2 million acres to be dis- tributed to landless peasants by 1984. Roldós’s foreign policy stressed greater independence from the United States, refl ected in his maintenance of

COLLAPSE OF MILITARY CORPORATISM, 1975–1990 415

friendly relations with Cuba, expansion of diplo- matic and commercial ties with socialist countries, and support for Central American revolutionary movements. But Roldós’s ambitious reform and development program had hardly begun when he was killed in a plane crash in May 1981.

His successor inherited deteriorating economic conditions as a result of a developing recession and declining prices for Ecuadorian oil. The economic slump sharpened the social problems created by ad- vances in industrialization and the modernization of agriculture. From 1970 to 1980, the propor- tion of peasants in the population had fallen from 68 percent to 52 percent. The agrarian reform, stressing mechanization and concentration of landownership rather than distribution of land to the landless, had ended semiservile relations in the countryside but aggravated the problem of land- lessness and rural unemployment. This swelled the number of rural people fl eeing to the cities in a fruitless search for work. By the early 1980s, the great port city of Guayaquil had a population of 1 million; an estimated two-thirds of its inhabitants were unemployed or underemployed and lacked adequate shelter, food, or medical care. Thus, in an atmosphere of economic and political crisis, social problems and tension accumulated with little pros- pect for solutions.

Collapse of Military Corporatism, 1975–1990

THE PERUVIAN REVOLUTION UNDER ATTACK, 1975–1983

The economic crisis that stalled Ecuador’s top- down military revolution also provoked a sharp struggle within Peru’s military establishment. Radical nationalists, who proposed to extend the 1968 revolution’s social and economic reforms, confronted moderates who called for measures that would win the confi dence of native and for- eign capitalists, thereby making possible a revival of private investments. In August 1975 a peaceful coup replaced President Velasco with Francisco

Morales Bermúdez, who gradually purged radical nationalists from the government and forced their resignations from the armed forces.

The so-called First Phase of the revolution had ended. To appease foreign and domestic capi- talists, the new government introduced a pack- age of severe austerity measures. These included sharp reductions in government investments in state enterprises, steep increases in consumer prices, and a 44 percent devaluation of the cur- rency, only partly offset by 10 to 14 percent wage increases. The government next announced the end of agrarian reform, although only about one- third of the land subject to expropriation had been distributed. In early 1978, after long negotiations, Morales Bermúdez capitulated to the IMF and ac- cepted its conditions for a new loan, including privatization of state enterprises, heavy cuts in budgets and subsidies, large price increases, and severe restraints on wage increases. These mea- sures provoked widespread strikes and rioting, which the government crushed with a full-scale military operation.

For the thoroughly discredited military junta, the prime concern was how to make a smooth transfer of power to a civilian regime that would continue its policies. A new constitution served this function. It established a bicameral Congress, both elected, like the president, for fi ve years. It contained language ensuring that private property and the free market would remain the foundations of the Peruvian economy. The constitution guar- anteed the right to strike and collective bargaining, but these were subject to parliamentary regula- tion. The biggest novelty was the grant of the right to vote to illiterates.

Predictably, Fernando Belaúnde Terry, a mas- ter of populist rhetoric who enjoyed an aura of martyrdom thanks to his ouster by the military in 1968, won the 1980 elections. It soon became clear that he intended to continue and extend the “counterreformation” begun by Morales Bermú- dez. Export expansion and debt repayment were the great priorities, to be achieved with the famil- iar arsenal of austerity measures and devaluation, combined with wage freezes.

416 CHAPTER 16 STORM OVER THE ANDES

The Belaúnde government also dismantled the major reforms of the Velasco era. A principal objective was to restore a free market in agricul- tural land by dissolving the cooperative system. A new agricultural promotion and development law gave the government the power to divide coopera- tive land into small, individual plots and turn them over to cooperative members, who could buy, sell, or mortgage them. This fostered the reconcentra- tion of land in a few hands.

Other legislation empowered the government to sell off state-owned companies and increase pri- vate participation in publicly owned fi rms through stock issues and other programs. The government proposed to ban general and sympathy strikes, drastically reduce public works spending, and phase out subsidies on basic foods and fuel. These proposals caused bitter wrangling in parliament between the government and the opposition par- ties, but they caused unprecedented popular pro- test; for the fi rst time in Peruvian history, all the major labor groups joined in a general strike.

Thus, fi fteen years after the military seized power in Peru, the nation again faced a crisis of unprecedented proportions. Its population had doubled between 1960 and 1980, from 10 to 20 million, and its distribution between town and country had changed dramatically. In 1960, 60 percent of the people were rural, but in 1980, 60 percent were urban. Unemployment climbed to new heights; strikes succeeded each other in in- dustry, the railroads, and the banks; and the rural exodus continued to swell the population of the barriadas that ringed Lima.

POPULAR CULTURE AND RESISTANCE

Second-generation provincianos had played a role in many of the urban protests that helped inaugu- rate the 1968 Peruvian revolution, and they like- wise joined this new popular movement to defend its achievements. Unlike their parents, however, they had become more economically independent of criollo society. They had created their own self- help migrant community associations, usually based on their region of origin (e.g., Punenos from

Puno and Ayacuchanos from Ayacucho), joined trade unions, and participated in other grassroots social movements that strengthened their public embrace of indigenous identities. This growing independence of thought and action was clearly refl ected in the birth of a new cultural form, a pop- ular urban musical style variously called cumbia andina or chicha for the corn beer that was the preferred beverage in highland Andean indigenous communities. No longer interested in assimilating criollo values, these sons and daughters of high- land migrants increasingly challenged established social hierarchies based on race, ethnicity, and class power.

Chicha music drew on three radically dif- ferent sources for its creative inspiration: Co- lombian cumbia rhythms, whose origins lay in Afro-Colombian cultural traditions; folk melodies indigenous to the Andean highlands; and the elec- tric instruments commonly associated with U.S. and British rock-and-roll. Chicha songs typically explored the everyday lives of poor, hard-work- ing urban provincianos. According to ethnomusi- cologist Thomas Tutino, one of the earliest chicha bands, Los demonios del Mantaro (Mantaro Dev- ils), sold 200,000 copies of “La Chichera,” a song that celebrated the life of a street peddler who sold Andean corn beer. Established criollo critics under- standably disparaged chicha as crude, amateurish, “mindless” music, and leftist intellectuals either dismissed its lyrical interest in unrequited love as politically disengaged or criticized it for “internaliz- ing criollo values” by promoting upward mobility.

But young provincianos, often feeling un- loved, socially marginalized, out of place, and lack- ing a clear sense of their own identity, thrilled to its “modern” beat and identifi ed with its lyrical la- ment about their real-life experiences. In one very popular song, “Ambulante Soy” (“I Am a Street Vendor”), the lead singer of Los Shapis, perhaps the most famous of the chicha bands, bemoaned, “How sad is life, how sad it is to dream” and then proudly announced, “I am a street vendor, I am a proletarian.” Similarly, Grupo Alegría’s “Pequeño Luchador” (“Little Fighter”) described the daily survival struggles of “a small child / Who runs

COLLAPSE OF MILITARY CORPORATISM, 1975–1990 417

through the city / Hawking advertisements that will sell” and then celebrated the heroism of this “Little boy with dirty face / Little fi ghter / Your hands now know / What it means to work.” Even songs like Los Shapis’s “Somos Estudiantes” (“We Are Students”), which some have criticized for its alleged identifi cation with criollo concerns about “occupational status” and social mobility, clearly stressed the value of professional positions as a means of promoting the development of their com- munities, not their own personal self-aggrandize- ment. “We are teachers / For our children,” Los Shapis sang. “Doctors we will be / For the orphans. We are lawyers / Of the poor.”

Chicha music soon outsold all its competitors in Peruvian markets, including internationally

renowned artists like Julio Iglesias and Michael Jackson. Initially performed on street corners and in vacant lots in the pueblos jóvenes, chicha artists later regularly played to large crowds in “chicha- dromes” and provided musical entertainment at community religious festivals, weddings, birthday parties, and other social events. Supported by the progressive indigenista policies of Velasco’s revolu- tionary nationalist regime, which had made Que- chua an offi cial national language and required radio stations to promote authentic local music, they soon dominated national radio broadcasts, claiming almost 40 percent of airtime by the early 1980s. Chicha music also expanded its popularity from the urban centers of its birth to rural highland communities. As the reformist Velasco government

During the 1980s, migrants from highland communities adapted indigenous musical instruments and folk rhythms to refl ect a new urban experience of modernity that they found simultaneously exciting and disturbing. [Alison Wright/Corbis]

418 CHAPTER 16 STORM OVER THE ANDES

crumbled, chicha artists and their concerts pro- vided young provincianos with useful meeting places to organize popular resistance and promote a return to democracy. Thereafter, they would lend their voice to support reformist state social programs proposed by Aprista and other populist politicians who sought to curry political favor with urban and rural provincianos alike.

APRA IN POWER, 1985–1990

The Aprista candidate who most benefi ted from Belaúnde’s failure was thirty-six-year-old Alán García Pérez, a disciple of the late Haya de la Torre. García campaigned on a populist, reformist pro- gram in 1985, promising to defend the agrarian and industrial reforms of the Velasco era and to reject Belaúnde’s free-market policies. In his inau- gural address, García proclaimed that henceforth Peru would not deal with the IMF but directly with the creditor banks. He also announced that he would limit interest payments on Peru’s foreign debt of about $14 billion to 10 percent of Peru’s export earnings—about $400 million. “Peru,” García declared, “has one overwhelming creditor, its own people.” Other parts of his economic pro- gram included measures to halt capital exports, freeze the price of necessities, and raise the mini- mum wage by 50 percent—all measures opposed by the IMF and the foreign fi nancial community.

García’s populist effort to restrict foreign debt payments, prohibit the fl ight of capital, prevent luxury imports, and raise wages formed part of a coherent program to revive the sluggish Peruvian economy. The long-term goal was promoting the development of an autonomous Peruvian capital- ism based on expanded import-substitution indus- trialization and reduced dependence on imported raw materials. The restriction on debt repayments and the controls on foreign trade were designed to make capital available for internal development; the substantial wage increases aimed to expand purchasing power and demand for Peruvian-made goods. But García distinguished his populist poli- cies from the state ownership that had character- ized Peru’s “military socialism” in the early 1970s.

In a speech marking the anniversary of his fi rst year in offi ce, he reassured private businessmen that, even as he rejected devaluation and new indebtedness as a regression to “the colonial reci- pes of the IMF,” so he rejected nationalization. His path, he said, led to “a strong state redirecting the structure of Peruvian industry toward less import- dependent options.”

But economic problems remained. Business resistance to the price freeze produced shortages of consumer items and forced the government to relax price controls, allowing some prices to rise. Moreover, there was a growing gap between the costs of the recovery program and government income from all sources, including export earn- ings and the savings obtained by limiting debt payments. García had few options. He could try through tax reform to tap the abundant wealth of Peruvian elites, left untouched by the military reformers, but this was an unacceptable solution given the moderate nature of his program. Print- ing money or a slowdown in economic growth was equally unacceptable. There remained the option of going to foreign banks for loans, but García had ruled out “new indebtedness” as a colonial recipe of the IMF, which had in any case declared him in- eligible for new credits.

A major obstacle to the sound, balanced economic growth envisaged by García was the continuing cleavage between the sierra and the coast—the contrast between the poverty of the highlands (largely populated by Quechua- and Aymara-speaking indigenous peasants) and the relative prosperity of the coast. Landlessness and unemployment or underemployment continued to be the burning problems of the sierra. The re- sult was that the highlands became the scene of a struggle between the landless peasantry and the giant cooperatives, often controlled by elite groups of managers, engineers, and bureaucrats.

Into this struggle over land, with all its poten- tial for violence, entered the Maoist Sendero Lumi- noso (Shining Path). This group was repudiated by other left-wing movements, which viewed it as terrorist and mistaken in its effort to polarize Pe- ruvian society into militarists and senderistas. For

COLLAPSE OF MILITARY CORPORATISM, 1975–1990 419

the most part led by radicalized students and other middle-class individuals, the Sendero Luminoso emerged in May 1980 with a program of terror- ist activity against all who supported the existing bourgeois order; it also encouraged peasants to invade, occupy, and loot cooperatives. The García government responded to this threat by continuing Belaúnde’s counterinsurgency campaign, which had placed nineteen of Peru’s twenty-three prov- inces under a state of emergency with the military in overall control and suspended most civil rights. García justifi ed this action, claiming that Sendero Luminoso had killed thousands of offi cials, police, members of other security forces, and uncoopera- tive peasants. However, church authorities and other independent observers asserted that the se- curity forces had themselves committed many re- pressive acts and that many killings of peasants ascribed to Sendero guerrillas were the work of these forces.

As his term of offi ce drew to an end, a balance sheet of García’s record in power pointed to some positive initiatives and accomplishments, includ- ing his decision to limit debt interest payments to a certain proportion of export proceeds, thereby making more funds available for development pur- poses. García’s debt strategy marked an advance over that of the military reformers, but it was not enough. Peru needed a program of structural eco- nomic and social change. It had to create a self- suffi cient industrial base that would lessen depen- dency on foreign imports and capital, but it also needed a more thoroughgoing agrarian reform that would attack the age-old problem of Andean poverty and backwardness. Finally, it required re- forms that would eliminate the need for food im- ports, expand the domestic market, and reduce the immense inequities in income distribution.

But these changes were not made. As a result, by 1987, García’s project for creating an autono- mous Peruvian capitalism ran out of steam; the country had a serious trade defi cit, its foreign re- serves were declining, and the business class, de- spite generous incentives from the government, refused to increase its investments. From 1988 to 1989 the per capita gross domestic product

declined by 20 percent, the biggest decline in the region. As if the economic crisis were not enough, the war with the Maoist Sendero Luminoso move- ment grew more intense. Moreover, the indigenous struggle to reclaim ancestral lands led to a wave of tomas de tierras (land invasions) that produced a new militancy among peasant leaders and fueled the rural rebellion.

Amid the economic gloom, Peru’s illicit coca trade ironically provided the only light and cheer. In Peru, as in Bolivia, the jobs and dollars gener- ated by the coca boom cushioned the impact of a devastating economic crisis. With opportunities for employment in the legal economy shrinking, thou- sands of migrants joined the “white gold rush” to the Upper Huallaga Valley, the heart of Peru’s coca empire. The coca, processed into a white paste, was sold to Colombian dealers, who pocketed most of the profi ts. But Peru’s share came to about $1.2 billion annually, roughly 30 percent of the value of all Peru’s legal exports. Without these illicit dol- lars, according to one Peruvian economist, the ex- change rate would have nearly doubled, making vitally needed imports much more expensive. Like Paz in Bolivia, García liberalized Central Bank rules to permit the purchase of coca dollars, no questions asked.

With APRA and the military disgraced by García’s economic fi asco and failure to end the civil war, the 1990 presidential elections became the site of a new contest between neoliberal free- market philosophy and the vague electoral popu- lism of an obscure agronomist, Alberto Fujimori. The son of poor Japanese immigrants, Fujimori insisted that the State’s primary obligation was to satisfy people’s basic needs before attempting any economic adjustment program. Surprising most political pundits, Fujimori’s populist crusade solidi- fi ed his base and attracted leftist support, thereby ensuring his electoral triumph.

Clearly, the historical record of Andean mili- tary corporatism in promoting authentic national development was ambiguous at best. However, even as the Andean republics had begun experi- menting with military corporatism to solve the postwar crisis of populism, another new strategy

420 CHAPTER 16 STORM OVER THE ANDES

of national development was unfolding in Chile. Eschewing the violence of the Cuban revolution and the hierarchical authority of Andean military corporatism, Chileans opted for a broad-based, popular, participatory, and democratic path to development.

Go online for additional resources:

! Primary sources

! ACE self-test quiz

! Chapter summary

! Flashcards

! Suggested readings