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Peruvian Democracy under Economic Stress: An Account ofthe Belaunde Administration, 1963-1968

Peruvian Democracy under Economic Stress: An Account ofthe Belaunde Administration, 1963-1968

Copyright Date: 1977
Pages: 328
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  • Book Info
    Peruvian Democracy under Economic Stress: An Account ofthe Belaunde Administration, 1963-1968
    Book Description:

    As economic adviser and manager of the Central Reserve Bank of Peru, Pedro-Pablo Kuczynski observed at first hand the crisis that preceded the overthrow of the Belaúnde administration on October 3, 1968. His role in the economic policies of that era enables him to provide an insider's view and analysis of the financial and economic problems besetting a democratic regime in a developing country.

    The author pays particular attention to the reasons for the difficulties of the administration after a promising beginning. He considers the main actors during the period 1966-1968, their central motives, the role of the opposition-controlled Congress, the government's efforts to cope with economic and financial problems, and the role of U.S. foreign policy. The initial successes of the administration in areas such as social participation depended on the initiative of a few key figures-a dependence that contributed to the crisis of 1966-1968.

    Originally published in 1977.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-6992-3
    Subjects: Economics, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Preface and Acknowledgments
    (pp. vii-x)
  3. Table of Contents
    (pp. xi-xii)
  4. List of Tables
    (pp. xiii-2)
  5. CHAPTER I The Economic and Social Setting
    (pp. 3-23)

    MOST descriptions of the poorer (or “developing”) countries generally begin by listing a low rate of savings and investment, the disparity of income levels, the instability of the economy due to its heavy dependence on a few exports, the low level of skills in both the private and public sector, and the difficulty of internal communications. Generally, but not always, the climate is said to be inhospitable. In some ways, Peru fits the stereotype of the developing countries at least in its general lines. The physical and cultural setting of Peru is, however, rather unusual. The sharp physical distinction between...

  6. CHAPTER II Dramatis Personae
    (pp. 24-37)

    When Fernando Belaúnde Terry¹ was inaugurated as President of Peru on July 28, 1963, a new era began. A military junta, faithfully keeping its promise to return the country to civilian rule within one year, had allowed the June 1963 elections in which Belaúnde defeated the chieftain of the APRA (Alianza Popular Revolucionaria Americana) by a small majority. Despite the fact that he obtained only a plurality of the vote, Belaúnde was an extremely popular figure, capable of drawing and inspiring a crowd at a moment’s notice. He was the first president who had a real and wide knowledge of...

  7. CHAPTER III The Early Belaúnde Years, 1963-1966 I: The Development Effort
    (pp. 38-74)

    Few governments in Peruvian history have begun with the degree of vocal popular support the Belaúnde administration enjoyed at the time of its inauguration on July 28, 1963. Partly as a result of the times, and mainly as a result of his own inclinations, Fernando Belaúnde Terry became President of Peru after he had made the need for basic economic and social change his main battle cry in his three campaigns for the presidency. Although the mood of 1963 election was one of popular enthusiasm, Belaúnde obtained only a relative majority in the June 1963 elections: out of about 1,814,568...

  8. CHAPTER IV The Early Belaúnde Years, 1963-1966 II: The Financial Problem
    (pp. 75-105)

    The financial policies of the early Belaúnde years were concealed by the glow of achievement in public investment and modernization, and the continued growth, albeit in fits and starts, of export earnings. While there were government policies for public investment, there was little direction on how to finance the development effort. In a sense, with the enthusiasm of a youthful government with a fresh outlook, this was understandable. At the same time, however, it reflected in part the primitive condition of financial policy-making in the public sector.

    The public finances of a country such as Peru, with its rapid growth...

  9. CHAPTER V Interlude: The IPC Issue and the Question of U.S. Aid
    (pp. 106-125)

    Before we move on to the main events of 1967-1968, it may be useful to pause and look back at an issue that plagued Peruvian political life before, during, and after the Belaúnde administration. The question of relations between Peru and the International Petroleum Company (IPC) became of crucial importance during the Belaúnde years in at least two ways: first, when it became in 1963 a factor that directly affected the granting of U.S. development assistance for the duration of the Belaúnde government, and, second, when it provided an important part of the background to the coup that overthrew Belaúnde...

  10. CHAPTER VI Crisis, January-September 1967: Devaluation
    (pp. 126-173)

    On April 15, 1967, President Belaúnde disembarked at the Lima-Callao airport from the gleaming Aerolineas Peruanas jet that had brought him and his delegation back from the Hemispheric Presidents’ Conference at Punta del Este. The welcome was tumultuous, with fifty to a hundred thousand people crowding the beautiful new airport, and dancing in the streets of downtown Lima. For weeks afterwards, the recording of the president’s speech at Punta del Este sold at record pace and was played over and over in Lima’s noisy music stores. In April 1967, President Belaúnde was indeed at the pinnacle of his popularity.


  11. CHAPTER VII The Battle for Taxes
    (pp. 174-218)

    The nine months from September 1967 to May 1968 went from one important event, a large devaluation for the first time in eight years of increasing prosperity, to another, the granting by Congress of authority to the Executive to pass the basic tax reforms the latter had been requesting, sometimes vocally and at other times half-heartedly, since the end of 1965.

    Although one should resist the temptation to write history in retrospect, it would not be a violation of that principle to say that the two episodes that contributed most to the October 1968 coup were the army intervention against...

  12. CHAPTER VIII Sixty Days
    (pp. 219-258)

    The period from early June to October 2, 1968, was one of great importance in recent Peruvian history. With Congress having temporarily abdicated the center of the stage, a dynamic Finance Minister was able to put through the necessary fiscal reforms and a number of other key financial measures. The period of economic decline looked as if it was being sharply reversed, although only for a brief moment, for on October 3 a general and his associates over-threw the constitutional regime. The history of the last governing Cabinet of the Belaúnde presidency can be divided into two periods: the period...

  13. CHAPTER IX Coup
    (pp. 259-276)

    President Belaúnde was deposed from office by a military coup in the early hours of October 3, 1968. According to the semi-official history of the coup by Zimmermann,¹ General Velasco led the arrangements for the coup. He had begun the preparations in April 1968—according to the Zimmermann account—and by May, at the height of the political and economic difficulties of the Ferrero Cabinet, had expanded the group of collaborators to three Army generals besides himself, and five colonels.² Again according to Zimmermann, the team that entered into office on October 3, 1968 arrived with a complete blueprint—El...

  14. CHAPTER X Epilogue
    (pp. 277-284)

    Almost eight years have passed since the end of the Belaúnde administration. Perhaps this is too short an interval for history to be written. Nevertheless, some of the lessons can probably be sketched.

    The fact that the democratic regime was expelled through a coup cannot but create a sense of failure, magnified by the impression that Peru at present seems unable to return to some form of democratic government. Yet there is no doubt that the Belaúnde administration left a political legacy that could be built upon in the future. The achievements were important: the idea of popular participation in...

    (pp. 285-290)
  16. Bibliography
    (pp. 291-294)
  17. Index
    (pp. 295-308)
  18. Back Matter
    (pp. 309-309)