Peru History Since 2006

By | December 21, 2021

The second government of Alan García, which began on July 28, 2006, ushered in a five-year period of sustained economic growth, fueled by the boom in the prices of exported mineral resources (especially copper and silver) and the influx of private foreign investments in strategic sectors mining and oil. However, the five years of García’s government were marked by the worsening of deep political and social tensions produced by the persistent inequality and by the development model centered on the intensive exploitation of natural resources.

The appointment of the liberal Luis Carranza Ugarte at the head of the ministry of economy and finance immediately made clear the desire to guarantee continuity to the process of neoliberal economic opening. Among the most emblematic measures of the government’s economic policy were the reduction of wages, the increase in public investments (especially in infrastructure), the reduction of customs duties, the decentralization of financial resources and competences in favor of regional governments and the increase in oil concessions in the Amazon rainforest. The economic measures adopted by the government created the conditions for an economic boom characterized by low levels of inflation, the reduction of the poverty rate, the creation of two million jobs. In the field of social policies,

In October 2008, the government was overwhelmed by the Petrogate scandal, which exposed corruption within the state-owned Petroperu oil company and the government, fueled by oil concessions in exchange for bribes. The scandal involved Prime Minister Jorge Castillo and the ministers of health and energy, culminating in a government reshuffle and a crisis in the popularity of President García. The Petrogate scandal was followed by the Baguazo crisis, from the name of the city of Bagua in the Peruvian Amazon where the clashes took place: on June 5, 2009 the government declared a state of emergency and ordered the intervention of the army to clear the streets occupied by indigenous groups protesting against the concessions of oil exploitation in the Amazon rainforest. It was one of the most serious cases of political violence in the history of the country and the toll of the clashes between the army and demonstrators was dramatic: 33 dead and 150 seriously injured. The government’s hard hand in handling the crisis caused yet another political earthquake, which led to the resignation of some of the ministers close to the left. The Baguazo produced a further collapse in García’s popularity. For Peru 2017, please check

Among other significant events of the period 2006-2011, also the sentence to life imprisonment of Abimael Guzmán (former leader of the Maoist guerrilla of Sendero Luminoso), the terrible earthquake that struck the central coast of the country in August 2007 causing the death of hundreds of people, and the sentencing of former president-dictator Alberto Fujimori to 25 years in prison for violating human rights by special forces during his term (1990-2000).

The presidential elections of 2011 were marked by political fragmentation and the absence of a single candidate representing the liberal center. The first round saw the prevailing candidate of the nationalist left, the former army officer Ollanta Humala (31.7%), and the candidate of the right Keiko Fujimori (23.5%). Despite the media war unleashed by the elites Peruvian economic policies against Ollanta Humala, accused of wanting to dismantle the neoliberal economic system in favor of statist policies on the model of Hugo Chávez’s Venezuela, the former soldier won the second round with a 3% gap. Decisive was the support guaranteed in the final phase of the campaign by leading figures of the political and cultural landscape such as Mario Vargas Llosa and the former president Alejandro Toledo, who spoke out not in favor of Humala, but against the election of the daughter of former president-dictator Fujimori.

The government program of the Peruvian Partido nacionalista proposed a redistribution of the wealth generated by the exploitation of natural resources, without however calling into question economic openness. In the first instance, the government implemented measures of a progressive nature, such as the increase in taxes on foreign companies active in the mining sector, the introduction of a mechanism for consulting the populations involved in large infrastructure and mining projects, the creation of the ministry of ‘Social inclusion and the introduction of new social programs such as Pensión 65 (support for retirees) and a scholarship system for university students.

The absence of a majority in Congress, however, forced Humala to make alliances with the center-right parties which weakened his initial progressive drive. The executive also experienced the same political instability experienced by previous governments, with continuous government reshuffles that saw seven prime ministers alternating until 2015 due to corruption scandals and political and social crises that deeply shaken the country. Among the most emblematic crises of the tensions inherent in the Peruvian development model, the one unleashed by the protests against the Conga mining projectin the Cajamarca region, accused of endangering the health of surrounding populations and the environment. Following demonstrations in opposition to the project, President Ollanta Humala declared a state of emergency in some areas of the region in December 2011, while Prime Minister Salomón Lerner – close to the left – resigned and was replaced by Óscar Valdés, a man of center-right, representative of the ‘hard hand’ and in favor of a decisive response by the state to social unrest. In July 2012, the clashes also claimed five lives. The government crisis caused by the Conga affair triggered the transition to the center-right of the Humala government at the political level, marked by a decline in popularity and frequent ministerial reshuffles.

Peru History Since 2006