Catherine and the Baroness
The only character who actually dies in Disney’s Cruella is the sweet, good servant, Catherine, who consents to raise Cruella – condemned to death by her birth mother, the grotesquely unfeeling Baroness De Vil – as her own daughter. Cruella and the Baroness shall dance a burlesque that plays out to the morbid rhythm of an eternal melody. Similarly in Peru since even the time of Spanish dominion a macabre masquerade has been enacted between conservatives and liberals, parties born of the same mother, Empire, whose local nemesis, Pachamama, struggles vainly with these uninvited adoptees in the face of their mutual despoliation of the natural order. Pachamama and her birth children, the Indigenous, do not fare well in this movie.
Vargas Llosa Musings
Peru’s – and perhaps the world’s – greatest living and truly genius novelist, 2010 winner of the Nobel Prize in Literature, Mario Vargas Llosa, an unequalled expert on the psychology of Latin American caudillos, is himself the progeny of Peru’s deepest contradictions. In any other context it would be difficult to conceive how the celebrator of anarchy in Le Guerra del Fin del Mundo could possibly condemn Pedro Castillo, whom progressives must continue to hope will be inaugurated as president of Peru on July 28, as a presage of dictatorship and backwardness. To deepen his wound, Vargas Llosa, who campaigned for the presidency in 1990 against Alberto Fujimori, has expressed his preference for Cruella (or, perhaps, the Baroness) herself, Keiko Fujimori, Alberto’s eldest daughter. Her father dissolved the Peruvian Congress in 1992, setting himself up as dictator for the next eight years, and whose enforcer was intelligence chief, Vladimiro Montesinos, with the help of $10 million from the CIA with whom Montesinos had a long-standing relationship. The CIA financed an anti-narcotics unit organized by Montesinos in the National Intelligence Service (SIN), despite reports of the involvement by Fujimori’s eminence grise in corruption, drug trafficking and human rights violations. A powerful Peruvian drug lord of the 1990s, Demetrio Chávez, testified in court that he paid US$50,000 monthly in bribes to Montesinos and several army officers.
Aged 19 in 1994, Keiko, who appears to have specialized more than anything else in the fine art of losing three presidential elections, accepted the title of First Lady from her father. Alberto had booted out (and was eventually to divorce) his much-abused wife, Susana, after Susana had accused him both publicly and in court, of kidnapping, torture, and corruption, and sought to run against him in the 1995 elections (Alberto changed the law so that Susana could not qualify).
Comparable perhaps to the bestowal on Keiko of the title of First Lady, Vargas Llosa, who replaced his own wife of 50 years in 2016 in favor of the 64-year-old mother of Enrique Iglesias – dubbed the ‘Pearl of Manila’ by the Daily Mail – was willing recipient of the hereditary title of 1st Marquis in the peerage of Spain, granted him in 2011 by the King of Spain, Juan Carlos I, the monarch who was soon to abdicate in disgrace for financial and other improprieties.
Meditations on Andean Peasantry
In his novel Lituma en los Andes (1993) Vargas Llosa turned his attention to the Andean Indigenous at the peak of the Maoist-inspired, rural, terrorist movement Sendero Luminoso. He peered deep into a primeval blackness belied by the peasantry’s colorful alpaca hats, facemasks, and ponchos. His niece, the film director Claudia Llosa, achieves much the same effect in her anthropological dissection of Andean village culture in Madeinusa (2006) and La Teta Asustada (2009). In his more recent Tiempos Recios (2019) Vargas Llosa constructs an allegory of the Fujimori and Montesinos years – a sort of lament, perhaps, for his own failure to out beat Fujimori electorally in 1990, and in which politically naïve, fearful members of Lima’s wealthy technocracy are represented as vain and foolish. Nor should we forget that in his novel El Sueño del Celta (2010) Vargas Llosa had already painted as horrific a picture of the abuse and slaughter of Amazonian Indigenous by European rubber interests around the turn of the twentieth century as has ever been accomplished.
Which leads us, then, to wonder at Vargas Llosa’s monumental failure of political judgment when confronted with a choice between Keiko Fujimori and Pedro Castillo. For it is not the Indigenous to whom we should first look for evidence of primeval blackness, but to the Conquistadores, their armies, priests, and traders whose swirling, mendacious blackness of racism, violence, and greed, conjoined with equally toxic liquids from the north, saturates beyond repair the entire continent of Latin America to this day. Vargas Llosa projects his attention outwards when he should be looking inwards: he has reversed cause and effect, abuser and victim. It is not the Indigenous who are dark and mysterious. More likely they are tired, and they are angry. They are tired of providing pretty pictures for frivolous tourists whose travel to Peru from countries far wealthier than theirs contributes to planetary destruction, and whose corporations seize 70% of the profits earned by exploitation of the country’s mineral resources on Indigenous land. Peru has the world’s biggest reserves of silver, as well as Latin America’s largest reserves of gold, lead and zinc. The Peruvian coast is renowned for its marine resources. The Amazon basin possesses large reserves of oil and natural gas, as well as abundant forestry resources.
Winner of the 2021 presidential election Pedro Castillo, explained:
Peru is such a wealthy country but so much of the wealth, such as copper, gold, and silver, goes to foreigners. At the ports, you see an endless stream of trucks taking away the resources of the country and just two hundred meters away, you see a barefoot child, a child with tuberculosis, a child full of parasites. That is why we must renegotiate the contracts with big companies so that more of the profits remain in Peru and benefit the people. We must reexamine the free trade agreements we have signed with other countries so that we can promote local businesses.
But what are the prospects for real change? In what follows I shall look at how Peru’s natural wealth and indigenous people interact with Cruella’s Hispanic Dance of the Macabre, starting with its latest episode (Pedro vs. Keiko) then retreating to the Spanish conquest, before moving to mid-19th century reinterpretations of Cruella’s dance that sought to integrate the Indigenous, on more harmonious grounds, and finally pausing at Peru’s nearest shot at authentic revolution, the Velasco regime, and its morbid neoliberal Fujimori aftermath.
The Policies and Politics of Pedro Castillo
Presidential candidate Pedro Castillo won the 2021 presidential election by a margin of 44,000 votes on the second round, with 50.14% of the votes counted as against Keiko Fujimori who garnered 49,86%. If the election is validated, then President Castillo will command 42 out of the 130 seats in Congress, whilst Fujimori’s Fuerza Popular and the other right wing electoral coalitions will have a combined parliamentary strength of at least 80 seats. If the election is not validated and no president is inaugurated on July 28, then under the constitution there must be new elections.
The 2021 presidential election in Peru should have ended several weeks ago, at the time of this writing, but validation of Castillo as president has been delayed by Fujimori´s denunciations sin evidencia, and in the style of Trump – yet afforded legitimacy by representations of some military and conservative figures through their own media (more than 70% of Peru’s news is owned and controlled by El Comercio Group which among other things propagates Fujimori’s ridiculous assertion that Castillo is a Sendero Luminoso communist). This might seem less outrageous in the capital, Lima, where Fujimori support is concentrated and where major corporations have threatened their employees with the loss of their jobs if they failed to vote for Fujimori. A highly suspicious massacre of 16 people in San Miguel del Ene on May 23rd, attributed by police to an unlikely, mysteriously reborn Sendero movement, was more likely to have been a ghastly pro-Fujimori terror campaign.
Those who supported Keiko Fujimori’s claim that the election had been stolen and that 200,000 votes should be thrown out were concentrated in the upper classes of the capital, Lima, and included former military leaders and members of influential families. Some openly called for a new election, or even a military coup if Mr. Castillo was sworn in. Hundreds of retired military officers sent a letter to top military chiefs urging them to not recognize “an illegitimate president.” A former Supreme Court justice filed a lawsuit requesting that the entire election be annulled. The Defense Ministry has confirmed that Alberto Fujimori’s henchman, Vladimiro Montesinos, in jail on a naval facility, was somehow able to use a landline number to make 17 phone calls to Pedro Rejas, a retired military officer and formerly loyal Fujimori cohort who later revealed the recordings. In one conversation Montesinos appeared to suggest that bribes be paid through an intermediary to three of the four members of an electoral tribunal to favor Fujimori in a recount.
On July 3, Peru’s government rejected Fujimori’s request to seek an international audit of its June 6 election. Even the U.S. State Department had described the election as a model of democracy. International observers, including the Organization of American States (OAS), found no evidence of major irregularities. Both the USA and EU praised the electoral process. Michelle Bachelet, the former Chilean president, the United Nations high commissioner for human rights, urged Peruvians to accept the election results. The National Elections Jury charged with reviewing contested ballots should have completed its task by mid-July so that a new president can be sworn in on July 28th. Its work was held up by a week after one of the judges resigned (he has been replaced).
A writer for the Financial Times has described Pedro Castillo, 51 years old, as a rural primary school teacher, a son of peasant farmers, and trade union activist. Castillo recently elaborated:
This year we are celebrating the bicentennial of Peru as a republic, yet after two hundred years, we still have a high level of illiteracy, and the homes of my parents and neighbors don’t have electricity, lights, or running water. There’s a totally abandoned health center where once in a while a nurse comes by and maybe you can find a bandage or a few pills for all the families. As I traveled in rural areas across the country, I found conditions similar to my hometown. Further into the Amazon, conditions are even worse. People there have nothing; they are totally abandoned by the state.
From 2005 to 2017 Castillo was affiliated with Perú Posible, a centrist party led by former president Alejandro Toledo. In 2017, the year he attained prominence as a leading figure in the 2017 teacher strike in Peru, Castillo joined his current party, Partido Nacional PERÚ LIBRE (PNPL) or Perú Libre, which claims a Marxist-Leninist heritage and proposes a left-wing program centered around increased spending on education and health services, nationalization of key extractive sectors, anti-corruption, and salary limits for congressional members.
Castillo was born to two illiterate peasants in one of the poorest regions in Peru. He is the third child of nine in his parents’ family. 60% of Peruvians do not have access to internet, and Castillo did not have a Twitter account. His campaign relied on community radios, personal visits to small towns, and cultural events. He built his presidential election campaign around resource nationalism and Indigenous rights. A central tenet of his PERÚ LIBRE party is to restructure Peru as a plurinational state along the basic lines of Ecuador and Bolivia. Peru has 4 major indigenous languages in the Andes (Quechua, Aymara, Cauqui and Jaqaru) and 43 more in the Amazon region.
Castillo has plans to rewrite the Constitution to give the state a greater role in the economy and keep a larger share of profits from mineral resources. Amid uncertainty over the final electoral outcome, he appointed more moderate economic advisers and sought to retain central bank head Julio Velarde – seen by many as a symbol of stability. The PERÚ LIBRE program addresses land reform, nationalization of natural resources to ensure that most of this wealth remains in Peru and available for the eradication of poverty, increases in state expenditure on social services (health and education), income redistribution, decriminalization of abortion. Other targets include human trafficking, especially of women; elimination of patriarchy and machismo in state and society; respect and promotion of women’s reproductive rights; and promotion of the self-organization of women at every level. Castillo himself, it should be noted, has reportedly opposed the legalization of abortion, same-sex marriage, and policies promoting gender equality. Additionally, PERÚ LIBRE aims to abandon the OAS (unofficial US regime-change machine) and return to UNASUR. The party strongly supports Cuba and Venezuela.
Although Castillo won only 18% of the vote for PERÚ LIBRE in the first round this was still something of a surprise, since the main contender for the left was thought to have been Veronika Mendoza, candidate of the Juntos por el Peru coalition, who obtained slightly less than 8%. Castillo was one of the least known among eighteen contenders in the first round. 70% of voters did not choose either Pedro Castillo or Keiko Fujimori. Many voters had been convinced by opposition propaganda that Vladimir Cerrón, the Marxist leader of Castillo’s party, Perú Libre, was the real power behind Castillo. It did not help that PERÚ LIBRE, although constituted in part by school union organizers like Castillo, also maintains loose ties to MOVADEF, a political movement that seeks amnesty for convicted terrorists, and advocates political participation and reconciliation between fully rehabilitated former terrorists and the citizenry at large. Castillo is anything but a terrorist. On the contrary, he was a rondero who helped lead peasant civilian militias that were officially recognized by the Peruvian government to defend small towns in the Andes against Sendero Luminoso terrorist cells during the 1980s and early ’90s. But no matter how progressive Castillo’s policies may seem they are also worryingly flexible in the face of potential setbacks and different audiences, and in Peru there is a bad history of the better promises of progressives or of progressive elements of neoliberals heading south (think Alan Garcia or Ollanta Humala) as quickly as champagne bottles at campaign victory fiestas. The show of humble, even Indigenous, origins, offers insufficient protect against such a turn of events.
The Politics and Policies of Keiko Fujimori
Fujimori is clearly a member of the Peruvian elite, albeit one whose father is still doing jail time – as is his former intelligence chief (the two are estimated to have stolen a combined $600 million during their decade in power). In a pre-Trumpian and therefore more rational world she would have stood nowhere near a position of power since prudence dictates even to social elites that they should keep the progeny of corrupt and murderous dictators hidden in the nursery or cellar, figuratively speaking, of course. In opinion polls, Fujimori has been among the least popular politicians in Peru. She has candidly supported her father’s dictatorial legacy and defended his record of state-sponsored extra-judicial killings. She has been hailed by the New York Times as a “towering symbol of the Peruvian elite and the heir to a right-wing populist movement started three decades ago by her father, the former President Alberto Fujimori.”
She became First Lady at the age of 19. She attended Stony Brook University in New York and earned a business degree from Boston University in 1997. She obtained her MBA from Columbia University in 2008. Her party, Fuerza Popular, promotes “fujimorism,” advocating for free trade and strong security. In 2016, Keiko Fujimori campaigned for tax breaks, incentives for small businesses to encourage registration of informal companies and allowing (Indigenous) communities to become shareholders in mining projects. She vowed to expand electricity and internet coverage into rural areas. In 2021 she has vowed to protect the interests of small and medium-sized businesses over large multinationals. She has advocated for state participation in strategic industries such as energy. She has also insisted that large mining projects must have the support of local communities to proceed. In short, she has cleverly hybridized the neoliberal policies of social elites with reassuring noises of concern for the middle classes and Indigenous.
What is there more macabre than the vision of Hernando de Soto, future explorer of the Mississippi and a founding father, of sorts, of the USA, teaching Spanish to the last Inca emperor, Atahualpa – following one of history’s most notorious, bloodiest, and deceitful massacre of thousands – in Cajamarca – by Francisco Pizarro’s small band of plunderers? As De Soto and Atahualpa conversed day by day in the early 1530s, the Incas amassed a roomful of gold as ransom for Atahualpa’s freedom, a day that never came because Pizarro ordered Atahualpa’s execution.
Peru has not been short of revolutions to redress this inaugural evil of modern imperialism. Each has fallen considerably short of real independence from imperialism and shorter still of freedom from racism and poverty. Advances in mass prosperity across the past century and a half have typically involved short-term excesses of generosity resulting from the State’s sale of the land, mining rights and enterprise of others, usually the Indigenous, to European traders and multinational companies. Neoliberalism is not so much about the generation of wealth that would not otherwise be created, as about the forcible transfer of that wealth from the State – and/or the people whom the State supposedly represents – to the accounts of business, finance and trade.
The liberation of Peru from Spain was undertaken in 1821, following nearly three hundred years of Spanish conquest and occupation, by José de San Martin – El Libertador de Argentina, Chile and Peru – with the assistance of Simón Bolívar. San Martin occupied Lima and declared Peruvian independence on 28 July. Upper Peru – Bolivia – remained as a Spanish stronghold until the army of Simón Bolívar liberated it three years later. Bolivarian projects for a Latin American Confederation floundered and a union with Bolivia proved ephemeral.
Thus was initiated the long reign of governance by a largely white Hispanic ruling class of traders, farmers, soldiers, priests, and educators. One of the liberators, Ramón Castilla y Marquesado, was later president of Peru for the period 1844-1863 and inaugurated a period of great national prosperity on account of trade in guano (bird excrement from conveniently uninhabited offshore islands, and used for fertilizer and gunpowder), which was initially monopolized by the State but whose profits were later enjoyed principally by foreign (mainly British) enterprises and eventually declined by the final quarter of the century. As the century wore on, politics became more formalized around an elected President and Congress, a party system that principally represented the interests of different sections of the ruling class (especially the military), based on a system of enfranchisement that favored propertied, educated, white men but did not necessarily exclude the indigenous. Women did not get the vote until 1956 and gender inequality has persisted as one of the outstanding features of Peru. Slavery was abolished in 1854, and the ranks of slaves in mines and plantations were increasingly occupied by impoverished Chinese and some Japanese immigrants as well as by the more favored but more demanding Europeans.
Velasco, or Fiasco?
If we set to one side the inevitable incremental changes achieved by liberal regimes (occasionally presided over by leaders from poor or even Indigenous background), often reversed by conservative successors or simply abandoned in periods of economic malaise, Peru’s second major revolution was the curious Conservative-Liberal-Military hybrid of the military regime and dictatorship of Juan Velasco Alvarado (1968-1975).
We can say of this period that a military junta, seemingly coming out of nowhere in response to a period of considerable political instability because Velasco’s predecessor (also to be his successor, 1980-85), Belaúnde, had no majority in Congress, handed Peru a revolution-on-a-plate. This might otherwise have taken centuries to achieve and had it happened anywhere else or at any other time, would have been instantly (and was eventually) squashed by the regime-change shenanigans of Washington and its Latin American allies. Yet it was scorned by Peruvians of both upper and lower caste (or at least so we are told, although following his death in 1977, Velasco’s casket was carried on the shoulders of farmers for six hours around Lima) and casually tossed into the trash can in favor of a return to the more familiar pace of Peru’s macabre, Cruella dance. That it happened at all was because it was a revolution previously unannounced, coming from the top, imposed top-down. Plus, it was a revolution in the deceptive spirit of Kennedy’s Alianza Para El Progreso, launched in 1961 through the Agency for International Development and the Alliance for Progress and designed as an answer to the regional threat posed by Fidel Castro’s Cuban revolution of 1959.
It is the Velasco revolution, not Fujimori’s torture-drenched dictatorship that most occasions dread for Vargas Llosa. The Velasco story is recounted in Peru’s 2019 greatest-ever movie hit, La Revolución y La Tierra by director Gonzalo Benavente which, predictably, is all but invisible and unattainable anywhere in the vast universe of US movie (anti-) abundance.
In 1968, Velasco (whose early life he described as one of “dignified poverty” working as shoeshine boy) launched a coup against the right-wing government of Fernando Belaúnde Terry. In suppressing Cuban-inspired revolutionary movements in impoverished regions of Peru, some of the regime’s army leaders became radicalized. The new regime introduced significant land reform which dissolved the horrendously cruel Spanish-era hacendado system that had concentrated land ownership (and, in effect, ownership of Indigenous) among 40 families whose lineage traced back to the days of imperial Spain. Within a decade, the regime expropriated 15,000 properties (totaling nine million hectares) and benefited some 300,000 families. Most properties were converted into cooperatives owned by prior workers on the estates. The purpose was to override existing property interests in favor of cooperative ownership, as opposed either to individual private farming or to state farms. But the government also created a system of price controls and monopoly food buying by state firms that was designed to hold down prices to urban consumers, no matter what the cost to rural producers. Following Velasco, most of these cooperatives were later converted into individual private holdings during the 1980s, after majority votes of the cooperative members in each case. The conversions left Peru with a far less unequal pattern of landownership than it had prior to the reform and with a much greater role for family farming than ever before in its history. But by creating many small holdings it reduced the economic efficiency and competitiveness of Peruvian agriculture. Agricultural reform may have contributed to centralization and urbanization as people moved into Lima and other coastal cities, tendencies that would almost certainly have occurred regardless.
The former landlords predictably claimed that they did not receive adequate compensation. They had been paid in agrarian reform bonds, a sovereign debt obligation of which the government defaulted payment due to the hyperinflationary period that affected Peru’s economy in the late 1980s. As the government ran deeper into debt, it was forced to devalue the currency and pursue inflationary policies. This was in part due to the 1970s Energy Crisis which made it impossible for the administration to fund some of its most ambitious reforms. Economic growth under the administration was steady if unremarkable – real per capita GDP (constant 2000 US$) increased 3.2% per year from 1968 to 1975, compared to 3.9% per year over the same period for Latin America and the Caribbean as a whole.
Other measures included expropriations of foreign businesses, few as significant as the International Petroleum Company, owned by (US) Standard Oil. There had previously been a dispute with the International Petroleum Company over licenses to the La Brea y Pariñas oil fields. On October 8, 1968, these were taken over by the Army. From this point on the USA set itself to overthrow Velasco. US–Peru disagreements extended over a broad range of issues including Peru’s claim to a 200-mile fishing limit, that resulted in the seizure of several US commercial fishing boats, and the expropriation of the American copper mining company Cerro de Pasco Corporation. Velasco’s government also instituted tax reforms, rewrote the constitution, and established diplomatic relations with the major communist countries. Under Velasco Peru advocated the removal of OAS sanctions against Cuba and advocated for Latin American unity against US power and influence.
Velasco’s regime advocated nationalization through a program it described as Peruanismo, a philosophy that inspired future Venezuelan revolutionary leader Hugo Chavez on his visit to Peru in 1974. The idea was to find a “third way” between capitalism and socialism, with a corporatist society much more inclusionary than that possible under capitalism but without rejecting private ownership or adopting any of the compulsory methods identified with communism. Peruanismo aimed to serve policies of inclusive social justice, development, and national independence. The regime expropriated companies across all major sectors, including fisheries, mining, telecommunications, and power generation, and consolidated these into single, monopolistic, industry-centric government-run enterprises and disincentivized private activity in those sectors. The new State companies proved expensive to the public treasury in part because of government attempts to hold down their prices with a view to easing inflation or to subsidize consumers. Their deficits were aggravated by spending tendencies of military officers appointed to management positions, and inadequate attention to costs of production. State enterprises were not able to finance more than a quarter of their investment spending and, when allowed to borrow abroad for imported equipment and supplies, external debt rose dramatically. By 1975 external creditors had lost confidence in Peru’s ability to repay its debts.
Curbing Foreign Influence
Foreign influences were reduced through tight restrictions on foreign investment and nationalization of some of the largest foreign firms. Peru’s action in this respect contributed to the formation of the regional Andean Pact, that featured some of the most extensive controls on foreign investment ever attempted in the developing world. The Industrial Community Law of 1970 gave any industrialist on the register of manufacturers the right to demand prohibition of any imports competing with his products with little regard for concerns about high costs of production, poor product quality, or monopolistic positions fostered by excluding import competition. Velasco promoted industrial investment by granting major tax exemptions, as well as tariff exemptions on imports used by manufacturers in production. The fiscal benefits equaled 92 percent of total internal financing of industrial investment in the years 1971 through 1975. Investment rose strongly but tax exemptions contributed to a rising public-sector deficit and inflationary pressure. Exemptions from tariffs on imports of equipment and supplies led to a strong rise in the ratio of imports to production for the industrial sector.
Industrial and Education Reform
Promoting worker participation in ownership and management was intended to reshape labor relations. A system of “industrial communities” required firms to distribute part of their profits to workers in the form of dividends constituting ownership shares. But firms typically avoided reporting profits in an effort to postpone sharing ownership, instead channeling profits to companies outside the system or adjusting the books. A few workers gained shares, but most were focused on immediate working conditions and earnings. Unions were distrustful of the seeming abrogation of their power. A reform of labor relations included severe restrictions on rights to discharge workers once they had passed a brief trial period of employment. Businesses responded by hiring more workers on a temporary basis.
The education reform of 1972 provided for bilingual education for the Indigenous people of the Andes and the Amazon, which comprised nearly half of the population. But there was little tolerance for dissent and media were frequently harassed and censored. Velasco pursued a partnership with the Soviet bloc, tightening relations with Cuba and Fidel Castro and undertaking major purchases of Soviet military hardware.
A Final Assessment
If ultimately the Velasco regime was undermined by inflation, unemployment, food shortages, increased political and military opposition, one may argue that it is fitting, if disappointing that a revolution that starts with the military should end at the hands of the military, as when military commanders declared that Velasco had not achieved most of what the “Peruvian Revolution” had stood for and was unable to continue in his functions. Which regimes, then, picked up that challenge of what the revolution “stood for,” and which, if any, made any further progress towards that goal?
Velasco’s successor, his prime minister, Francisco Morales Bermúdez, began a second phase of the Peruvian armed revolution, promising to transition to civilian government even as he paralyzed implementation of Velasco’s reforms, illustrating how an ideology of parliamentary democracy can be weaponized for counter-revolutionary purposes. To hammer the point home, Bermúdez turned into an extreme right-wing military dictator, pursuing a policy of leftist cleansing. But he did return Peru to democratic elections in 1980, when Fernando Belaúnde Terry (whom Velasco had deposed in 1968) was re-elected.
This period inaugurated or coincided with the rise of gruesome US-backed military dictatorships across Latin America: General Jorge Rafael Videla in Argentina (1976-1981); General Augusto Pinochet in Chile (1973 to 1981); Alfredo Stroessner of Paraguay (1954–1989); General Juan María Bordaberry of Uruguay (1973–1985); the Brazilian military dictatorship of various successive military leaders (1964–1985) and successive military dictatorships in Bolivia (1964–1982). It was this tendency more than any other that most inspired and sustained Sendero Luminoso in the 1970s and 1980s, in turn creating the terror pretext that secured Fujimori’s victory against Vargas Llosa in the 1990 elections. The ensuing neoliberal dictatorship and militarization of the 1990s enabled Fujimori, like Chile’s Pinochet, to exploit principles of neoliberalism for illegal self-enrichment. But also, it has to be said that neither Velasco nor Sendero Luminoso enjoyed sufficient popular consent or support – least of all by those whose interests they most claimed to serve, those of the Indigenous peasantry.
Return to the Cruella Dance
It is remarkable that since Velasco all but one former president (Belaúnde) has been tried and convicted of corruption charges. At least four (Martin Vizcarra, Pedro Pablo Kuczynski, Ollanta Humala and Alejandro Toledo) have been caught up in the long-running Odebrecht scandal in which the Brazilian engineering and contracting giant has been implicated in charges of bribery. Using a complex network of shell companies, off-book transactions and offshore bank accounts, and a dedicated bribery division, Odebrecht paid more than $780 million in bribes to government officials, their representatives, and political parties in countries across Latin America and the Caribbean. This conduct helped it win contracts and other benefits totaling $3.34 billion.
Governance over the ten to fifteen year period separating the dictatorships of Velasco and Fujimori was shared principally between the second presidency of Belaúnde (1980-1985), for Acción Popular – the party he had founded in 1956 as a reformist alternative to conservative forces and to the populist APRA party, appealing primarily to the middle class, professionals and white-collar workers – and the first presidency of Alan Garcia (1985-1990) for Alianza Popular Revolucionaria Americana (APRA), the political party founded by Víctor Raúl Haya de la Torre in 1924, and supported by workers and middle-class liberals. APRA dominated Peruvian politics for decades and stood for Latin American unity, nationalization of foreign-owned enterprises, and an end to the exploitation of the Indigenous.
Liberal pretensions notwithstanding this period constituted one of economic and political disaster on account of unmanageable debt and hyper-inflation, such that inflation stood at 7,649% in 1990, and 2,200,200% over the period 1985-1990 alone. Belaunde’s lifting of tariffs shortly after coming to power threw Peru into a highly competitive international economy for which it was ill-prepared, a challenge exacerbated by the economic impact of a severe earthquake in 1983. Garcia’s reluctant embrace of the IMF in 1988 (though he tried to limit payments to 10% of GNP) had severe consequences for expenditure on social welfare and further contributed to the rural popularity of Sendero Luminoso, which had been established in the Andean highlands in 1969 by philosophy professor Abimael Guzmán, and provided Garcia’s successor with pretexts of national emergency for ruthless army suppression that barely distinguished between guerrillas and peasants.
Fujimori’s dictatorial regime lasted a full decade (1990-2000), beginning shortly after the country had taken on the IMF loan in 1988 in a bid to evade national bankruptcy and amidst a period of extraordinarily rampant inflation. He is best known for his neoliberalism and ruthless suppression of terrorism and of the Left more generally. He is currently serving a prison sentence for his role in killings and kidnappings by death squads. In April 1992, he dissolved Congress, dismantled the judiciary, and assumed full executive and legislative powers. He decreed stringent and repressive labor laws to create a ‘paradise’ of labor flexibility, giving management the right to fire, casualize labor contracts, and to oppose unions and collective bargaining. He increased the number of provinces subjected to a military state of emergency from 52 to 66 so that nearly half of the population was encased in these emergency areas where all sectors of the left were ruthlessly suppressed at a total final cost of 69,000 lives, according to Peru’s Truth and Reconciliation Commission (2001-2003). The Left was barely present in the elections of 1995, 2000, 2006, and 2011 and began to recover only in 2016.
Following the same Chicago School neoliberal script as others before him including Margaret Thatcher in the UK, Ronald Reagan in the USA, and Augusto Pinochet in Chile, Fujimori eliminated price controls, totally deregulated markets, privatized state-owned companies and introduced a tight monetary policy. This attracted foreign (in particular, US) investment in natural resources, finances, and consumer markets, and expanded the power of foreign capital in Peru. Fujimori’s eugenic plan led to the forcible sterilization of about 350,000 mainly peasant and indigenous women as a “solution” to the nation’s ‘Indian problem’ (i.e. higher birth rates among Indigenous people than Peruvians of European descent).
Fujimori’s successor, president Alejandro Toledo (2001-2006) who founded his own party, Pais Posible, and led the anti-Fujimori opposition, did not resort to the underhand and brutal methods of his predecessor. His administration marked the beginning of the country’s macroeconomic boom, and promoted foreign investment, free trade, and investment in infrastructure and human development. But it also suffered from a governance crisis, scandals in Toledo’s personal life, and allegations of corruption against his inner circle. In July 2019, Toledo was arrested in the USA for an extradition order to Peru. He requested release on bail, but the request was ruled inadmissible. He was later released on bail, but placed under house arrest in San Francisco, awaiting extradition on charges of receiving multimillionaire bribes.
Toledo was succeeded by the return to the presidency of Alan Garcia, leader of APRA, for the period 2006-2011. Garcia committed suicide in 2020 as the police came to arrest him for personal graft and corruption during his administration. For most of the 20th century, APRA had dominated Peruvian politics, appealing to the masses with its anti-imperialist rhetoric. Yet Garcia’s government embraced an agenda oriented towards attracting foreign investors and fighting drug trafficking. Within his first month in power, Garcia repudiated his election promise of seeking changes to the Free Trade Agreement with Washington, and made its signing his first priority. His enthusiastic adoption of neoliberal measures and welcome of foreign transnationals to exploit communal lands for oil exploration, logging, mining, and large-scale farming involved a massacre by heavily armed Peruvian security forces against protesting Amazon Indigenous. This occurred in the Peruvian city of Bagua, located 1,400 kilometers north of Lima, when some 600 militarized police attacked 1,000 demonstrators who were blocking the main road. European, American, and Brazilian companies had bid tens of billions of dollars for rights to drill oil, construct a hydroelectric plant and exploit the vast mineral and timber resources of the Amazon jungle. Garcia mocked the Indigenous whom he claimed hated investment and did not like capitalists, on the grounds that it was not just about US corporations who were looking to plunder their lands, but also Korean, Arab, and Japanese.
Ollanta Humala, once described as a left-leaning former army officer, assumed office for the Gana Peru party (2011-2016) largely on the strength of support from poor voters. He was briefly depicted as a sort of hero for defeating Keiko Fujimori. He is brother of the “ethnocacerist,” Antauro Humala. Ethnocacerism is an ethnic nationalist movement seeking the establishment of a proletarian dictatorship led by the country’s Indigenous communities and their descendants. It draws on the history of Indigenous and anticolonial movements. It was developed by Ollanta and Antauro Humala in 1987, beginning as a military doctrine in the war against Sendero Luminoso, and as an organizing strategy in opposition to the military doctrine and strategic errors of the Peruvian armed forces, which viewed the Indigenous countryside as a foreign territory and colony. Antauro Humala was later handed a 25-year prison sentence for kidnapping 17 police officers for 3 days and killing 4 of them.
In the week following his victory Humala made it his priority to reassure capitalist investors, foreign and national, that they had nothing to fear from his campaign rhetoric about changing the country’s economic model and effecting a more just distribution of wealth. He issued a conciliatory message to the USA that he considered it a ‘strategic partner’ and that he was looking to establish a close cooperation with Washington in the fight against drugs. He handed the armed forces in Peru, already active in fighting drug trafficking, greater responsibility for maintaining public order. The armed forces would now also be expected to crack down on illegal mining, and to intervene in social protests. Under Humala’s watch it was revealed that the government was creating a gas concession, bordering on or including the Manú national park, that would favor Pluspetrol, one of the world’s largest oil and gas companies, which already operated an existing gas concession in the region known as the Camisea project.
Digging in his heels later against opponents of the huge US$4.8 billion Conga gold and copper mining project in the region of Cajamarca in northern Peru, Humala declared a 60-day state of emergency and called on residents to maintain serenity and calm. The project was operated by (US) Newmont Mining, the world’s largest gold mining company, which already operated the giant Yanachocha open-pit gold mine in the vicinity. Humala’s administration expected Peru to earn an estimated $800 million in royalties and taxes. Many residents feared that the project, approved the year before by Alan Garcia, would ruin their water supply. Humala mobilized army troops in a region where constitutional rights had already been suspended under emergency decree, claiming that the authorities had exhausted the possibility of dialog with protesters and blaming the intransigence of local leaders.
In 2017 Humala and his wife were arrested on charges of corruption and money laundering. Both were banned from leaving Peru and were awaiting trial in 2018. The 2017 election was won by Pedro Pablo Kuczynski (of Peruans por el Kambio), one of the wealthiest and oldest of Peruvian presidential candidates. His presidency should have run to 2021, but he was forced to resign in 2018 to avoid impeachment procedures initiated in 2017 for lying to Congress and receiving bribes in exchange for government contracts. While Peru’s Congress was debating whether to oust him over these charges of corruption, he made a Faustian bargain to win over supporters of Alberto Fujimori who wanted him to pardon Fujimori. The pact does not seem to have worked very well for Kuczynski and obtained only a very short reprieve for Fujimori.
Kuczynski had to be replaced by his vice-president, Martin Vizcarra (Independent), who launched an offensive against corruption but was impeached by Congress in November 2020 for taking bribes on several occasions in 2014 in exchange for awarding public work contracts. It is widely believed his impeachment was prompted by his decision to dissolve Congress for obstructing the investigations against corruption.
Without admitting guilt, Vizcarra accepted the Congress decision and was replaced by the Congress’s President, Manuel Merino, as caretaker leader with a cabinet dominated by the business elite. The country exploded in huge mass demonstrations that were met by brutal police repression with two dead, dozens injured and many more arrested. Merino was forced to resign on 15 November 2020 and Congress then appointed Francisco Sagasti (who had voted against Vizcarra’s impeachment) as interim president. Sagasti was entrusted with the task of organizing the presidential elections in April 2021.
Peru had a total population of 32m in 2019, with a per capita GDP of approximately $7,000 and an overall GDP of over $230 billion. Peru is the seventh largest economy in Latin America. Its services sector accounts for 60% of GDP, within which telecommunications and financial services alone account for nearly 40% of GDP. Industry represents 35% of GDP. Peru’s ores and minerals exports make up over 50% of total exports, food accounts for 21% and mineral fuels account for 12%, a trade that is very vulnerable to shifts in terms of trade. In a financially dollarized economy, consumers and firms might borrow in USD but buy and sell products in local currency, so any fluctuation of the foreign exchange can lead to distortions in both production and consumption decisions.
For two decades in the twenty-first century, Peru’s economy appeared robust, among the best-performing Latin American economies, with annual real GDP growth averaging 5.4 percent 2005-2020. But economic inequality had been intensifying since 2014, when a 12-year run of sustained growth in the national GDP, driven by a mining boom, came to an end.
Poverty had been the fate of 50% of the population in 1970, even increasing slightly to 54.1% in 2000. It then declined a little, to 49.1%, in 2006, but went down a whole lot further to 20% in 2019. But the 2020 pandemic pushed it back up to 30%. In 2019 the top 1% and 10% of income earners got 29.6% and 56.6% of GDP, respectively; 40% of middle-income earners got 35.8% of GDP, whilst 50% of low-income earners only received 9.4% of GDP. About 45% of Peru’s total population is indigenous and 52% of those who live below the extreme poverty line are indigenous.
According to the Instituto Nacional de Estadistica y Informatica (INEI), people who earn less than 338 soles, or US$150 dollars, per month are in poverty and those who earn less than 183 soles or US$80 a month are in extreme poverty. The minimum living wage has been established at 930 soles, or 415 dollars, per month. In 2017, poverty in urban areas impacted 15% of the population, but poverty in rural areas was 44%. 70% of the rural poor did not have titles to their property, 42% lived in adobe houses, and 58% lived on dirt floors. 73% of the rural poor had no access to a public water source, and 50% had only reached a primary school level of education. More than 80% did not have health insurance, and 53% worked in agriculture. Decades of neoliberal meanness in the matter of social and welfare benefits have cast millions into precariousness and hardship, enhancing their vulnerability to pandemics such as Covid-19. Peru has experienced one of the highest Covid-related mortality rates.
By 2021 a total of US$ 17 billion had been transferred abroad in fear of Pedro Castillo’s presidency. Consumer prices jumped 3.2 percent 2020-2021, a rise concentrated in products of the “basic food basket” impacting mainly the poor. Peru produces only 9.5 percent of the wheat it consumes—the rest is imported from Canada, the US, Argentina, and Russia. By 2020 the number of families declared poor (earning US$2,520 or less annually) in Peru had risen from 20 percent to 30 percent of the population, wiping out the poverty reduction achieved over the past decade. More than 10,000 families have been evicted from informal settlements. Yet foreign investment in Peru’s mining sector was expected to total US$34 billion over the next decade. Although the international price of copper rose by 94 percent from May 2020 to May 2021, mining employed fewer personnel due to increasing automation.
In many ways Peru continues to suffer from a 500-year-old Latin American malaise of Hispanic dominance, exercised through military, religious and economic institutions, coupled with the problems of proximity to the global hegemon, the USA, and the attraction of Peru’s mineral wealth to a global capitalist class. Its politics evince a perpetual struggle – Cruella’s macabre dance – between a stubborn conservative self-interest, and a more liberal, less privileged middle class that claims to speak for the Indigenous but has achieved too little to advance their status. The world views of both parties are shaped predominantly through a westernized lens. Their campaign wars of words provide a very insecure basis on which to predict their actual behavior in power, which is governed as much by fear and venality than a concept of the public good. Problems that cannot be resolved within this narrow compass frequently invite military intervention and/or dictatorship that is given to brutality.
The post Cruella Moments in Peru
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