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Currency unit

Nuevo Sol


















Peru is the result of two strands of history: the pre-Colombian civilizations of the Andes and the culture founded by the Spaniards who conquered the area. The Inca Empire was centered on Cuzco, still an important provincial center. It was captured by the invading Spaniards in 1536.

The Incas appear to have run a socialist state in which every economic activity was controlled by the state. They were conquered by the Spaniards (few in number) because the incomers had horses and gunpowder. The Incas had no wheels or writing but built roads for the imperial foot post. It is possible that at that time the Inca empire was passing through a period of weakness or was past its peak and ready to fall. The Spaniards had the assistance of traditional enemies of the Incas who saw the opportunity to revolt. Final defeat of the Inca king in 1572.

The Spaniards built an important city at Lima on the coast and became the ruling group throughout the country. They formed a colonial state of the kind found throughout Spanish America.

The modern state was formed when the colonists revolted against Spain. Independence was declared in 1824 but there was a war with Spain from 1864 until 1869 when Spain finally recognized the independence. In 1879-84 there was a war with Chile. Another with Ecuador over Amazonia.

The Spanish colonial population and the mixed population continued to rule the new state.

In the modern state there are two populations. The politically and economically active population is still the Hispanic, but the indigenous cultures persist and are increasing in their cultural influence.

There has been a serious guerrilla war which owes some of its origins to the desire of the indigenous people to reassert their culture and political rights.

In the long run it seems unlikely that there can be peace until the two cultures are both represented equally, or a synthesis occurs between the legacies of the Incas and the Spanish conquerors. A recent president was a second generation Japanese immigrant, Alberto Fujimori. However, he declared a state of emergency and presided over what was essentially a military regime. The army typically is used to fighting the people and probably could not resist an invasion (except for border skirmishes as in early 1995 with Ecuador). The latest president is of partly Indian descent.



Amerindian langs. including Quechua, the language of the Incas







There is a constitution but it was recently suspended. There would be an elected president and congress. However, the real government was the military. When the civilian system has functioned in the past it has represented only the descendants of the colonizers and the mixed race people. The majority have experienced it much as black South Africans experienced the Apartheid regime.

The main problem has been the Pol Potist guerrilla movement called Sendero Luminoso (Shining Path to Communism) which operated mainly in the Andean provinces once occupied by the Inca Empire and in the rural areas in general. This war may have come to an end, though some of the causes are still present.

Sendero was founded in Ayacucho by a university professor of philosophy, Abimiel Guzman, (Presidente Gonzalo) as a breakaway from the orthodox communist party. He admired Mao Zedong but like Pol Pot his followers destroy the modern economy. He regards all subsequent Communist leaders (including Enver Hoxha!) as revisionist moderates. If this movement gained power it could be expected to institute a dictatorship as horrific as that of Pol Pot. Like several other groups of its kind(including Al Qaeda) it can best be regarded as a Cult. It may have grown out of a legitimate self-defense against police brutality.

Guzman was captured in September 1992 and sentenced to life in jail.

The root of the problem is the division between the descendants of the Spanish conquerors, a minority, and the majority descendants of the indigenes. This is expressed as racism and fuels the Sendero guerrillas. This has something common with apartheid. Extremes of wealth and poverty are also a factor. (click Poverty).

Lima is a typical third world city sucking in population from the country without offering advantages of industry to raise their standard of living. The mainly Quechua speaking people of the Andes were neglected and left in poverty. However Sendero also owes something to the philosophy professor who started it and the methods of terror used in the villages. It is impossible for anyone not in the field to know how much the Quechua speakers are supporters of Sendero and how much they are victims.

It is hard to say how much voluntary support Sendero had but it would be wise not to believe uncritically that they ruled only by fear. Possibly the truth is they had some popularity before the killings (by both sides) began and later ruled by fear in those areas where they controlled the villages, at least at night.

The military, forces of the official government, have reacted with the use of indiscriminate killing. This has been shown in many other countries to encourage people to support guerrillas. It may be having the same result in Peru. The military and police may well be seen by the peasants as representatives of the European population and therefore alien.

There is also another guerrilla movement called Tupac Amaru named after an ancient Inca ruler. It operates mainly in the Amazon region. A right wing guerrilla movement exists, probably police and army personnel death squads, who kill people they believe to be connected with the "left wing" movements.

Elections have been held, but mainly in the European dominated area as the villages tended to be controlled by Sendero and people were afraid to vote, or candidates were afraid to stand, for example for village mayors, many of whom have been killed. When there is an elected government it has to take into account the views of the military who have run the country at various times. The military have a reputation for brutality both to their own men and to those they consider enemies. If the guerrilla war had gone on getting more violent there was a strong possibility that the military would take over again and institute a regime similar to El Salvador or Argentina during the Dirty War. (Under the State of Emergency this was already going on).

The 1991 elections brought to office the descendant of Japanese immigrants, Alberto Fujimori, ostensibly with a technocrat policy of ending inflation. However, he began a policy of complete privatization and ending of all social welfare which has been summed up (by an opponent) as "Let the poor die" . Some wonder whether this will aid the Sendero to recruit the poor, who might prefer to kill rather than die.

Some believe that the elected structure is only a facade for the real power which is the oligarchy of families who own the land and businesses. In any case this structure only functioned in the city of Lima and a few other urban centers. In the rural areas only the army or the Sendero are important.

In April 1992 Fujimori suspended the constitution with the assistance of the army, converting his regime into a military dictatorship (autogolpe). His excuse was that the constitutional authorities were paralyzing decision making. This is true as they represent those interests which have most to lose if genuine reform of taxation occurs. However, Fujimori then became reliant on the military and on his "legal adviser" a former military man and drug baron.

The outlook looked grim. At one time it seemed possible that Sendero might win the war. However, the arrest of Guzman may make possible a less psychopathic revolution.

Some commentators suggest that the main backers for the Fujimoro government may have been the drug interests.

Alberto Fujimori was reelected 1995 but was overthrown by a combination of popular protest and a loss of support from the military.

Fujimori fled to Japan (Nov. 2000) the country of his parents and is resisting extradition as a Japanese citizen.

A new president Alejandro Toledo was elected, so that there may now be a functioning civilian regime again. New presidential elections are to be held in April 2006. Alain Garcia , a president of the past was re-elected, despite his past record of incompetence.







Throughout its existence as an independent state the ownership and control of the economy has been concentrated in the hands of a small number of family run banks and companies - sometimes estimated as being 12 families. This limits the amount of investment that can take place, especially as the owners export capital to the United States and other countries rather than invest it at home.

The main economic question is how to deal with the large foreign debt. However, the illegal drugs (Cocaine) industry is estimated to be at least as large as the official economy and has produced a large income in dollars held in clandestine accounts, mostly abroad. Peru is an important source (two thirds of the total) of the Coca leaves which are native to the high Andes. The actual growers however receive little. Most of the money goes to the army; some to the Shining Path.

The official economy was crippled by the guerrilla war and the drain on public resources to pay for the military. Moreover, the guerrillas specialized in damaging electricity pylons and other economic targets.

A recent president, Alberto Fujimori, imposed severely anti inflationary policies which had the result of greatly increasing unemployment by crippling the official economy. Inflation dropped from 400% a month to zero but economic activity did not revive and there is a very large percentage of unemployment and actual starvation. The gap between the rich and poor widened. The owners of capital refuse to invest it in the country.







8 million people in the capital. But no work for many of them.

A result of population pressure and lack of development in the villages.

There was a rapid spread of cholera during 1991 into towns and villages which have no modern sanitation. From Peru it spread to the whole continent.






Human Rights

For the poor there are no rights, whatever the constitution says (and the constitution was suspended by the military government). Death squad activity has been reported in many areas and massacres by the army were reported to be routine. Torture and disappearances were common in the army and police barracks.

There is at present a civilian regime and the situation may be improving.

Climate effects

One degree
Loss of glaciers causing water problems in Lima and other cities

Two degrees
Andean droughts make country difficult to support population

Last revised 11/05/10

South America


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since 17/04/12

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