Peru from Fujimori to Toledo

— Al Twiss

SINCE JULY 28th PERU has had a new president, Alejandro Toledo, the first Indian ever to be elected chief of state. Although the second round of the election was very close -- with former president Alan Garcia trailing Toledo by only a few percentage points -- the general feeling is one of optimism.

The major problems facing the new government are reactivating the economy -- particularly agricultural production -- settling accounts with the mafia that ran the country during the Fujimori dictatorship, and prosecuting those responsible for the human rights violations between 1980 and 2000.

The caretaker government of Valentin Paniagua, which governed Peru for the nine months between Fujimori's fall and Toledo's inauguration, focused most of its attention on finding those guilty of corruption.

Alejandro Toledo is a 55-year old Andean Indian. Born in a small village in the mountains of Ancash, he herded sheep as a child, and, after his family moved to the coast, shined shoes and sold newspapers as many of Peru's poor children do today. A couple of Peace Corps workers who rented a room from the Toledo family helped him get admitted to San Francisco State University, where he studied with the aid of a soccer scholarship.

Toledo did his post-graduate work at Stanford and earned a doctorate in economics. While at Stanford Toledo met his wife, Belgian anthopologist Elaine Karp. (During recent election rallies she addressed Indian audiences in Quechua, Peru's predominant Indian language.) After working in international financial and academic institutions, he ran for the presidency of Peru in 1995 and was defeated.

Toledo ran again in 2000, coming in second to Fujimori officially and probably winning outright. After the first round he took the stance that the process was fraudulent and -- although he did not withdraw -- made it clear that if Fujimori “won” it was by fraud. After the expected Fujimori victory Toledo took a leading role organizing the opposition in the streets. These demonstrations eventually led to Fujimori's fleeing the country.

The massive protest in the streets at the time of Fujimori's 2000 inauguration was called by the opposition forces the March of the Four Suyos -- in reference to the four corners of the Inca Empire. Toledo has played up his Indian lineage and, in his public meetings in the predominately Indian mountains, used the image of the Inca Empire -- saying that after 500 years the Indians were finally taking back the government.

The day following Toledo's inauguration in Lima, he participated in a traditional Andean ceremony of offerings to the Pachamama (Mother Earth) as part of the official ceremonies.

Racial Tension

Toledo's obvious Indian characteristics and use of the imagery and symbols of the pre-conquest period explain why the election results were so close.

Even though Alan Garcia headed one of the most corrupt governments in Peru's history -- only overshadowed in this respect by the Fujimori-Montesinos Dictatorship -- almost 50% voted for Garcia in the second round.

Racism against Indians in Peru is very strong and unlike Mexico, where the Spanish conquest is generally viewed as a setback to the Mexican people, the conquerors are viewed by the white minority and many in the urban middle classes as bringing civilization to Peru.

Of the country's 26 million people, 45% are Amerindian, 40% Mestizo (mixed Amerindian and other), and 13% European. The mostly European-dominated right-wing parties attacked Toledo as being racist. Much of the urban support for Garcia in the second round was from those sectors that couldn't support seeing an Indian president. Others believed accusations, which originated in the Fujimori government, that Toledo is a cocaine user and has a daughter he refuses to recognize.

Toledo's main success in office has been the investigation and indictment of hundreds who participated in the corruption of the Fujimori regime.

The Fujimori dictatorship has to rank as one of the most corrupt in the world. According to the best estimate, the Fujimori-Montesinos team was able to take out of the country $870 million stolen from public funds or received through drug trafficking and illegal commissions.

In addition, public funds were used to pay off judges, military officers, election officials and members of congress, TV stations and newspapers. Only in recent months has the extent of the corruption become known, with revelations on how money was obtained and de<->posited in banks around the world. At present over 800 persons have been implicated.

And since his capture in Venezuela, Vladimir Montesinos, the former unofficial head of the of Peruvian national intelligence agency (SIN), is beginning to point the investigation to his accomplices.

Economic Disaster and Drug Wars

Upon taking office in 1990 Fijimori dealt with the extraordinarily high inflation of the Garcia government by creating a new currency, the New Sol (Nuevo Sol), dropping six digits of the old Inti. It's true inflation was no longer a problem, once prices became fixed at extremely high dollar levels.

Fujimori also implemented neoliberal economic policies to pay Peru's massive debt, driving the economy to the edge of collapse. Claiming his policies were successful, he pointed to official government figures that put GNP growth at 3.9% annually. But the reality was half that. In fact all financial indicators from the Fujimori period, including agricultural and industrial production, were falsified.

Fujimori and Montesinos also claimed as one of their great successes the war against coca production and cocaine exportation. Since their fall the facts reveal that they were major participants in drug trafficking and used the Peruvian military to protect and transport cocaine.

Why did the U.S. government accept the claims? Perhaps the answer lies in the fact that Montesinos was on the CIA payroll. There was a real drop in the production of coca leaf, mostly in the Huallaga Valley, but this had more to do with the appearance of a fungus which destroyed the plantations than with any police or substitution program.

Clearly Washington stood by Fujimori until it became clear that the opposition to Fujimori -- in the face of his insistence on remaining in office -- could create more instability than any regime that might replace him.

The neoliberal program promoted by the international financial institutions and accepted by the Fujimori government called for opening Peru to imports, eliminating public employees and creating a “free market” in jobs.

The implementation of these programs resulted in Peruvian industries closing because they could not compete with Asian manufacturers -- who also paid high commissions to government officials. Public workers who were organized into some of the most militant unions were given bonuses to resign or else be fired. Many institutions, such as government-owned banks, were shut down.

After Fujimori's 1982 presidentialist “auto-coup,” the Constitution was altered to permit the government to legally eliminate job stability. These unemployed workers were only able to find new jobs under short-term contracts with no benefits. All of these blows against nationally owned enterprises and the working class helped to weaken the previously strong labor movement.

The attack on labor was based on fear and bribery. Under Fujimori's government those protesting government policy were accused of terrorism and sometimes even murdered by the official death squad, Grupo Colina. Such was the fate of Pedro Huilca, Secretary General of Peru's labor federation the CGTP.

The attack on the peasantry was even more devastating. The Agricultural Bank, which granted loans to peasants and farmers, was eliminated. Under the previous system, peasants and farmers could pressure the government for price increases to ease the blow of inflation. But since the government agencies that bought the products such as corn, rice and potatoes were eliminated, they were forced to compete with foreign food imports, often priced below costs of production in Peru. As a result, in the countryside there has been a drastic increase in poverty and diseases such as tuberculosis.

One of the important demands of the peasant unions now is the re-establishment of an Agricultural Bank. But the Toledo government has only supported the establishment of a private Agricultural Bank, which would not solve the problems of the poor peasants who need access to soft loans and guaranteed markets and prices.

Since the fall of Fujimori there has been some movement to revive and form parties of the once-strong Peruvian left. Their presence was important in the organization of the March of the Four Suyos but no left parties were able to qualify for the ballot under the existing rules established by the Fujimori regime. Because he was invited to join one of the lists Javier Diez Canseco, one traditional leader of the left, was elected to the present congress.

In the first round of the presidential election there were five candidates. Most of the recognized leaders of the legal left supported either Toledo -- for his leadership in the mass movement to topple Fujimori -- or Alan Garcia, for his mild social democratic program. The labor and peasant movements have begun to rebuild in recent months but due to the extreme economic depression it will take time to rebuild the organizations and cadres lost during the past decade.

Need for A Radical Change

As of yet the new regime has made no dramatic initiatives to reactivate the economy and, except for announcing programs of emergency aid for areas where the economy is most depressed, it has not indicated a real break with Fujimori's economics.

Toledo's cabinet is a mixture of neoliberals and former leftists. Toledo himself worked for the World Bank and his Minister of Economics, Pablo Pedro Kuczynski, is a neoliberal banker who comes with the support of the international banking establishment.

Coming into office after having been criticized by some international bankers, Toledo used a post-election tour of the United States and Europe to reassure the bankers and governments that he will not carry out a radical economic change.

His problem is that radical changes are needed to reactivate the economy. And although Toledo campaigned as a defender of the “third way” -- as proposed by the British Labour Party and other social democrats –- he and his economic team have shown no sign of deviating from the previous policies.

The government has taken steps to reduce bureaucratic centralization by calling elections for the regions (the Peruvian equivalent of states) and returning some of the independence to municipalities. In recent weeks mass protests have broken out in the regions, especially in the south, around questions of local control and the lack of progress in implementing election promises.

In some cases these demonstrations have been organized and financed by municipalities with Fujimorista administrations. There are signs that they are working with pro-Shining Path forces.

The indictment of practically all the important ministers, agency heads and congresspeople that participated in corruption has become one of the major sideshows in Peruvian life. Videos showing these former high officials receiving their bribes directly from Montesinos compete with TV novels for the public attention.

The population hopes to see these people pay for the crimes they committed and first on the list is Alberto Fujimori, who by claiming to be a Japanese citizen is, for the time being, safe from extradition in Tokyo.

One of the most serious of the charges against Fujimori and his accomplices is the use of political murder by regular military and police forces and death squads as a normal procedure in fighting the two organizations that took up arms against the government in the 1980s, the Maoist Sendero Luminoso (Shining Path) and the Movimiento Revolucionario Tupac Amaru.

A Commission of Truth was created shortly before Toledo took office. He has changed its composition, adding a retired army general, and altered its name to a Commission of Truth and Reconciliation.

But it remains to be seen if the commission will investigate not only the human rights violations committed during Fujimori's presidency (1990-2000) but also those committed during the governments of Belaunde (1980-85) and Alan Garcia (1985-90). Many believe that the human rights violations com<->mitted by the previous regimes will be overlooked and that the commission will mainly investigate the two armed opposition groups and those military officers closely linked to the Fujimori regime.

from ATC 96 (January/February 2002)

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