inclusion of new economic and social rights in the constitution, but at the same time became frustrated
with its minority role within the Assembly and ultimately, in a protest action, refused to sign the new
constitution. For their part, APRA and the PPC joined forces and designed a system that concentrated
greater power in the Executive, the former believing that it was on the verge of winning the presidency
and the latter desiring to avoid the problems that brought down the Belaunde administration twelve years
earlier. For its part, the military was concerned with retaining many of its institutional prerogatives as it
planned to return to the barracks.
The result was a mixed, and at times contradictory, set of rules, structures and incentives. On the one
hand, the new constitution marked a return to a strongly presidentialist political system, in which the
bicameral legislature could delegate ample powers to the Executive if the latter had majority support. The
Executive, in turn, was given ample power to delegate authority to the Armed Forces for a variety of
tasks. On the other hand, the electorate was much larger and more socially diverse.  The range of parties
competing in the new system was broader than in the past, and previous ideological restrictions on party
formation were eliminated. Nonetheless, few efforts were made to strengthen the multiparty system and
throughout the 1980s political power remained notably concentrated in Lima and among a subset of
largely creole elites.
In the 1980 general elections, the parties that had drafted the Constitution were unable to sustain
significant voter support. The APRA split into warring camps, the Left divided into five separate lists,
and the PPC was unable to move beyond a narrow base among the urban social elite. Hence in a
surprising turn of events, Fernando Belaunde and his AP party returned to power with 45.4% of the votes
and allied with the PPC to have a firm congressional majority. Superficially it appeared that little had
changed since the man who won the last presidential election in 1963 was again the victor in 1980. But
the country had changed, and this volatility in the fortunes of its key political figures and parties would
By 1983, the population was dissatisfied with the AP PPC alliance, the economy remained in shambles,
and the welfare situation of the poor remained critical. By this point, also, both the socialist Left and the
APRA party made comebacks under dynamic new leadership. In 1983, the United Left front (IU), led by
 lawyer Alfonso Barrantes, won the majority of Lima and nearly one third of the
municipal vote nationwide. In 1985, the APRA under the leadership of the charismatic young politician
Alan Garcia won the presidency outright with an historic 53.1% of the votes, followed at a distant second
by Barrantes.
Yet once in power, Garcia returned to the populist politics of the past. Rather than consolidate APRA's
position as a governing party, he attempted to exercise direct and arbitrary leadership unmediated by
political institutions. He sought to reach out to a broad, multi class coalition of people,  the many against
the few,  and to reintroduce a fiery nationalist discourse back into the political arena. His party, at the
same time, became a vehicle for patronage, corruption and harassment of other political competitors.
APRA's long years in the wilderness had not prepared it to govern. One of Garcia's first acts as President
was to announce that Peru would limits its debt service payments to 10% of export earnings. He also
began to stimulate the economy by granting subsidies and controls that directly favored supporters, and
tried to nationalize the banking system in a failed effort to prevent capital flight. The results were
disastrous and the economy spun out of control. During Garcia's final years in office, the economy
contracted  7.4% in 1988,  12.3% in 1989 and  2.3% in 1990. During those same years, inflation rose to
1,722% in 1988, 2,775% in 1989, and 7,650% in 1990.
H:\INCOMING\July24\MSI Submission\Fn Email.doc

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