After his devastating 1985-1990 presidential term, García was narrowly elected in 2006 to succeed Alejandro Toledo. Since then, García has worked tirelessly with mixed results to redeem his own reputation and to create a legacy of economic prosperity in Peru. Unfortunately for the nation, economic growth under García has not often translated into social development as large portions of Peru’s population, particularly the indigenous, have not shared in the country’s prosperity. García maintains a highly strained relationship with Peruvian indigenous groups, who have protested the exploitation of the country’s natural resources. Anti-poverty programs have required major overhaul and have not successfully addressed the bulk of the poor and lower middle class’ needs. García will leave office in 2011 having brought some economic stability, but always at the cost of socioeconomic harmony in Peru.
Corruption and economic disaster: Alan García and APRA before 2006
In 1985, Alan García was the first candidate from the Alianza Popular Revolucionaria Americana (APRA), to win the nation’s presidency. Peru’s oldest political party, APRA was founded by Victor Raúl Haya de la Torre in 1924. The movement originally espoused anti-imperialism and the pursuit of a uniquely Latin American solution for the region’s problems but over time, the party moved toward the center. García spent much of his first term taunting the international financial community and imposing a heterodox economic program. Upon taking office, he irked financial powers by pledging to only commit the equivalent of ten percent of Peru’s export earnings to service its foreign debt.
García’s well-intentioned but poorly implemented defiance of hegemonic international financial institutions damaged the Peruvian economy and people. Inflation soared between 1985 and 1990 and by the last year of García’s term, real wages had fallen to half of their 1980 level. Also, upon losing investor confidence, the Peruvian government struggled to further service its towering foreign debt, which stood at over US$19 billion by 1989. García’s economic policies left the country devastated and his hurried departure from Peru paved the way for the neoliberal “Fujishock,” which Alberto Fujimori initiated in 1990.
García’s first term as president also saw a sharp escalation of violence in Peru, committed mainly by two guerrilla organizations: the Maoist Sendero Luminoso (Shining Path) and the Marxist-Leninist Movimiento Revolucionario Túpac Amaru (MRTA). Peru’s internal conflict would leave almost 70,000 dead by the time it ended in 2000. Under García, increased poverty and social turmoil combined with the fluctuating economy caused the president to fall out of favor with much of the population. Further, accusations of corruption surrounding García and his APRA compromised the party’s credibility.
García spent most of Fujimori’s decade-long presidency living in exile. He returned to Peru in 2001, when he lost the presidential election to Alejandro Toledo. While in office, Toledo initiated a sweeping anti-poverty campaign and negotiated a free trade agreement with the United States. Colombia and Panama, two other Latin American countries that were simultaneously seeking free trade relationships with the U.S., have not yet seen their agreements ratified. The accelerated implementation of Peru’s agreement demonstrated President Toledo’s positive relationship with President George W. Bush.
In the first round of the 2006 election, Alan García came in second, right behind the left-leaning Ollanta Humala, of the Partido Nacionalista Peruano (PNP). García then managed to surge in the second round to capture some of the disqualified candidates’ votes and win the election. Aware of the need to reshape his legacy and contradict his dubious ties to Alberto Fujimori, García tried to repair his reputation at home and abroad. According to Cynthia McClintock, Director of the Latin American and Hemispheric Studies Program at the George Washington University, García was petrified over repeating the mistakes of his first presidency and “calculated that he had to move further right” to redeem his standing in the international financial community.
Peru and the United States: a cozy relationship?
When García took office in July of 2006, he affirmed his commitment to anti-poverty campaigns and stabilizing the economy. He pushed for the approval of the free trade agreement with the United States that Toledo had negotiated. Thanks to policies including cuts in government spending and privatization, García has presided over an economic boom. The Peruvian economy will grow by 6.1 percent this year and by 5.8 percent in 2011, according to a report by Bank of America. Statistics released by the World Bank show that in 2009, 290,000 Peruvians escaped poverty and 279,000 more rose from indigence. In addition to being a rising star in the eyes of international financial institutions, Peru is enjoying a newly strengthened relationship with Washington. President García’s vocal critiques of Hugo Chávez and his South American allies keep Peru firmly separated from two of its closest Latin American neighbors: Ecuador and Bolivia.
When Deputy Secretary of State James Steinberg visited Peru earlier this year, he conveyed President Obama’s desire to meet with President García and the United States’ appreciation of its partnership with Peru regarding mutual concerns ranging from free trade to the stemming of drug trafficking. The U.S. government already funds aggressive eradication and alternative development programs to reduce coca production and stimulate infrastructure projects in Peru.
Despite García’s economic achievements and his professed shared vision with Washington, United States programs in other parts of Latin America have routinely taken precedence. Peru may be the second largest cocaine producer in the world, but Mexico and Colombia currently demand the most pressing anti-drug action. For 2010, U.S. funding for antinarcotics programs in Peru amounts to $34,730,000, over $7 million less than the aid figure provided in 2009. García remains eager to remind Obama of Peru’s relevance to United States policy, thereby cementing the governments’ joint interest in suppressing the drug trade and expanding Peru’s privileged trade relationship with the United States. Professor McClintock of the George Washington University suggests that García would value more financial support from the U.S. for anti-drugs programs but that he does not particularly want to take on such a challenge. In fact, there is reason to believe that García would prefer to wrap up his term having promoted Peru’s profile as an economic leader in the hemisphere rather than reinforcing its reputation as a chaotic thoroughfare for illegal drugs.
Another question that persists is García’s chronic poor standing with his own countrymen. Peruvians don’t seem to like him; in fact, a good deal of polling and anecdotal information spotlights a García who is not only begrudgingly appreciated, but is seen as a person without convincing principles.
Persistent corruption accusations have undermined García and APRA’s international standing both during this term and during García’s first stint as president from 1985 to 1990. In October of 2008, Prime Minister Jorge del Castillo and the entire cabinet resigned amid the exposure of a bribery scandal in which a Norwegian oil exploration firm enjoyed preferential treatment and received prized oil contracts from the Peruvian government. In February of this year, Jorge del Castillo and Omar Quezada were appointed to be APRA’s joint secretaries. Soon after, in May, Del Castillo found himself once again embroiled in an oil-related scandal. APRA’s executive committee refused García’s attempt to remove Del Castillo and Quezada from office. On May 25th, several APRA members were among the fourteen people arrested for questionable land deals related to the state Agency of Formalization of Informal Property (COFOPRI). The tumult within APRA and suspect practices among the party’s most powerful leaders have damaged García’s reputation, showing the president to be incapable of corralling his party.
Further, García’s administration has been under constant assault from opponents like Ollanta Humala on the left. In April of this year, Humala’s Partido Nacionalista Peruano (PNP) initiated a motion to impeach Alan García. To explain what drove his motion, Humala highlighted the under-publicized social conflicts that have cost numerous lives since 2006. García jokingly welcomed the challenge, saying that his forced resignation would allow him to run again in 2011. As Peru has gained credibility among international banks and governments, García and APRA have succeeded in losing the confidence of many Peruvians.
Economic growth, but disappointing social progress
At home, the García administration has been dogged by controversy surrounding its marginalization of indigenous communities throughout the country. This month marks the one-year anniversary of turbulent protests by indigenous groups in Bagua, Amazonas, which left over thirty people dead. At the crux of the conflict was García’s exclusion of indigenous groups from negotiations to open parts of the Amazon to logging, oil drilling, and other activities by multinational corporations. Although the government eventually revoked the decrees as a result of the heated protests and President García acknowledged the mistake of barring indigenous representatives from the negotiations, tensions between indigenous groups and the government persist.
Indigenous organizations continue to pursue legislation requiring the consultation of indigenous peoples regarding decisions related to their land. Alberto Pizango, leader of the Asociación Interétnica de Desarrollo de la Selva Peruana (AIDESEP), is accused of organizing the protests in Bagua last June and returned to Peru last week from his year-long exile in Nicaragua. Upon arriving in his country, law enforcement officials detained Pizango for almost a day before he posted bail. García has little time to repair his severely damaged relationship with the indigenous leadership and it seems unlikely that the two sides will reach any new accord before the president leaves office in July of 2011.
As in many Latin American countries, social stratification continues to separate Peru’s population. There remains an alarming divide between the range of services available to residents of urban areas like Lima, and the lack of essential services in many rural parts of the country. A study by the United Nations Development Program found that 7.4 percent of homes in Lima do not have running water. Meanwhile in Huancavelica, a city located southeast of Lima in the Andes, 80 percent of homes lack running water. Often, such differences in resources further isolate urban populations from the impact of deeply disturbing events taking place in remote parts of Peru. For instance, last year some García supporters bemoaned the barriers erected by indigenous groups to effectively cut off access to Peru’s natural resources in Bagua. These critics perhaps did not recognize or comprehend the extent of the indigenous groups’ alienation from the decisions that affect access to their own land.
The García administration has a mixed human rights record. According to the State Department’s 2010 Human Rights Report, the government “generally respected the human rights of its citizens.” However, the report recorded evidence of:
“Abuse of detainees and inmates by police and prison security forces; harsh prison conditions; lengthy pretrial detention and inordinate trial delays; pressure on the media by local authorities; corruption; harassment of some civil society groups; violence and discrimination against women; violence against children, including sexual abuse; trafficking in persons; discrimination against indigenous communities, ethnic minorities, and gay and lesbian persons; [and] failure to apply or enforce labor laws.”
Further, the government has not sufficiently cracked down on child labor in the informal sector of the economy. The World Bank’s 2010 World Development Indicators show that in 2007, 42.2 percent of children between the ages of seven and fourteen were employed. This percentage is the highest among the Latin American countries for which data was available.
Dr. Virgilio Roel Pinedea, dean of the Colegio de Economistas del Peru, noted that underemployment is a more urgent crisis than unemployment. The job growth of recent years has not mitigated the expansion of the informal sector.
What can García do?
Even though Peru’s business sector is enjoying renewed foreign investment and the worldwide profile of a relatively small but rising power, García has not done enough to mend longstanding societal divisions in Peru. Far from reaching out to his country’s large indigenous community, President García has stood alongside business interests and only belatedly recognized the need to involve all parties in the decision-making process about the use of indigenous terrain. The president seems most concerned with reinforcing the benefits of the free market and globalization in Peru in order to rescue his own legacy, which has been tainted by corruption. Yesterday in Washington, President García asserted that Peru “chose correctly” by opening its economy and defying last year’s global economic stagnation. Economic indicators are indeed positive, but until the administration eradicates corruption and includes more segments of Peruvian society as part of the national financial and political conversation, Peru’s prosperity will remain a weak shell surrounding an imbalanced country.