Peru: Corruption and No Solutions
Modern Peru has been boggled down with Corruption stemming from Turmoil of the "Lost Decade" in the 1980s with no solutions presented. Take a read and enjoy the analysis brought about Peru.
Just this past Wednesday, a self-coup was organized by then-President Pedro Castillo. The central reason behind was Congress planning to do an impeachment vote. A similar incident occurred in 1992 by then-President Alberto Fujimori. Luckily, Castillo failed miserably by attempting to play Fujimori's playbook as Peru avoids tyranny.
How did we get here?
Troubles of modern Peru's political history can be traced back to the lost decade of the 1980s. During this time, stagnation (production of goods and services in an economy slows down or starts declining) was prevalent. Additionally, the lost decade was prompted by foreign debt accumulation throughout Latin and South America. Mass public expenditures and nationalization of banks became recipes for disaster as hyperinflation (rapid rise in prices becoming out-of-control) became commonplace.
The World Bank
In the table, inflation in 1980 was 59.1% then peaked at 7,481.7% in 1990.
During this time, mass political unrest occurred through the rise of a Terror group known as Shining Path or the Communist Party of Peru. It should be noted that during times of mass economic unrest, radical ideas such as Communism or fascism took hold. This is due to people attempting to find a new avenue by blaming the “ills of capitalism” for wrongdoings while not realizing as with Peru, liberalization was needed. The Shining Light reign or terror would last until 2002 with a culmination of up to 70,000 people killed. This would be due to Fujimori's human right abuses which will be touched upon later. Throughout the lost decade, Alberto Fujimori would begin his rise to power by working his way from a Dean at the National Agrarian University to hosting a Television show. In 1990, Fujimori emerged as a “dark horse” candidate campaigning on a platform of change. In the end Fujimori would defeat Christian Democrat Lolsa in a landslide victory winning 62.4% of the vote. Within his first few years, economic progress occurred by relaxing private sector price controls, eliminating all exchange controls, and reduced restrictions on investment, imports, and capital. Tariffs were simplified and the minimum wage was immediately quadrupled. This brought forth the “Fujishock”, but the plan was not attributed to Fujimori and instead to The Washington Consensus through the IMF. This was through western countries investing into Peru with the guarantee of market structure reform which Fujimori pursued. Despite economic reforms pursued, Fujimori utilized successes to seek control and solidification of power. On April 5, 1992, Fujimori declared he was “temporarily dissolving” Congress and a reorganization of the judicial branch. He ordered a tank to drive towards the steps of Congress and when the Senate attempted to hold a session, tear gas was deployed. The ending result was Fujimori had essentially unlimited executive power due to key factors of control being the military and police sided with the President.
Ensuing result was Fujimori committing human rights abuses. First instance foresaw Grupo Colina, a right-wing death squad active from 1990 to 1994 engaged in the Barrios Altos massacre. The target was the Shining Path. When Congress began an investigation, Fujimori conducted a self-coup. When the case was reopened several years later, it was discovered the people present were not members of the Shining Light. Second instance was the La Cantunta massacre with again, the target being Shining Light. Like the Barrios Altos massacre, most of the people were not Shining Light members with the exception of possibly 2 were considered members. In the light of turmoil, Fujimori pursued his most evil endeavor known as Plan Verde. At the height of the plan from 1996 to 2000, forced sterilization became common primarily towards impoverished or indigenous women. Estimates range up to 300,000 women were forcefully sterilized. A result of Fujimori's tyranny imposed, he was sentenced to 25 years for using the right-wing death squad to target innocent civilians who were presumed to be members of the left-wing guerilla group Shining Light and the forced sterilization of women.
2000s & the chaos of the 2010s
The 2000 election was on the horizon and Fujimori announced his bid for an unprecedented third term. The election was heavily riddled with fraud. In the first round, Fujimori scraped by winning 49.9% to 40.2% against Academic and Economist Alejandro Toledo. Going into the second round, Toledo encouraged his supporters to spoil their ballots by writing “No to Fraud!”. A result of the second round foresaw similar turnout and Fujimori winning in a “landslide” 74.3%-25.7%. International observers refused to recognize the result. This time protests began occurring except Fujimori did not have crucial allies such as the military and police on his side. On November 22, 2000, Fujimori delivered his resignation from Japan after traveling from a summit in Brunei. Afterwards, the First Vice President was not recognized as President due to his ardent loyalism to Fujimori. Valentín Paniagua became President and stayed on as an interim until the 2001 elections. These elections saw Alejandro Toledo running against former President Alan García, who served from 1985 till 1990. This resulted in Toledo winning 53.1% to 46.9%.
Democracy seemed to be achieved and thus a ridding of corruption. However, the acts continued under different actors. Only difference was human rights abuses withered down. Firstly, Toledo had corruption issues through being accused of receiving a $20m bribe from Odebrecht, a Brazilian conglomerate company. Eventually Alan García returned to power in 2006 and remained till 2011. Post-Presidency, García died by suicide in 2019 over allegations he participated in another Odebrecht bribery scheme. President Ollanta Humala who served from 2011 to 2016 is facing trial over allegations of bribery from Odebrecht of taking $3 million during his 2011 presidential campaign. President Pedro Pablo Kuczynski had to resign 2 years into his term in 2018 over initially denying ties with Odebrecht. Soon after Vizcarra was voted out after two impeachment trials in 2020 for $640,000 in public work bribes.
2020s: Failed Repeat of 1992
Observed throughout the 2010s, corruption continued very rampantly. No signs of corruption letting down showed. In 2020 after Vizcarra being ousted from power, Manuel Merino was quickly ousted from power in a week. This was because two deaths against his government sparked mass exodus into his cabinet.
In 2021, Peru had its elections after 4 presidents had been in power since 2016. This saw former teacher and farmer Pedro Castillo face off against Former President Fujimori's daughter Keiko. In a divisive election, Castillio won 50.1% to 49.9%. Immediately after being elected, Castillo attempted to form a coalition with technocrats to moderate leftist to the far-left. Result was a deterioration of the coalition and Castillos approval rating plummeting. Impeachment proceedings were prompted by the Fujimorist faction with the last before December 5th over sending aid to Ukraine which cited Castillo's moral capacity in putting Peru last from their perspective. Soon after, allegations of corruption began surfacing of him receiving $510,000 form a businessman from an oil company recently bought by the state. He sought to join a witness protection program. On Wednesday December 7th, Castillo nervously announced plans to dissolve Congress, reorganize the judiciary and a state of emergency. A coup was underway. Fortunately, the First Vice President Dina Boluarte came out against the reasons Castillo cited and determined the constitution must be upheld. Shortly after, Castillo was detained by Lima Police and Congress voted to impeach Castillo. Thus the playbook Fujimori had played in 1992 failed in 2022 thanks to the determination despite a fractured political system of Democratic institutions being upheld. Now, we await to see if President Boluarte can serve fully for the next 4 years when her term expires in 2026.
Moving Forward
Peru experiences mass corruption which has contributed to the mass instability plaguing their politics. Corruption as mentioned in the last newsletter regarding Kazakhstan is a hard matter to solve. There are solutions. These include simple political reforms as Fujimori did with liberalizing markets but he became power hungry and violated human rights. Another manner is bringing corrupt actors to justice. An issue is these sometimes include close allies or family members. These two instances can make a leader come across as power hungry since they seek a solidification of power. Finally, a method of ridding corruption is studying other countries' mechanisms such as the United States, Denmark and New Zealand in how corruption is handled. Lessons from these countries can help formulate meaningful policy to tackle the issue.
Once Peru is able to tackle corruption, they will be on the path towards a flourishing Democracy. Until then, the issue remains strong and mass instability will be the downfall of a once promising country.