Peru: Society and Nationhood in the Andes

By Peter Flindell Klarén | Go to book overview

12
Return to Orthodoxy, Redemocratization, and Populism Redeux, 1975–90

Morales Bermúdez and the Second Phase,
1975–80

The putsch carried out by General Morales Bermúdez deposing Velasco in August 1975, although it was not immediately apparent, signaled the onset of a more conservative phase of military rule. While one prominent progressive general would later call it a “counterrevolution,” it can also be seen as the equivalent of a major change in regime, now referred to as the Second Phase to distinguish it from the First Phase under Velasco. Declaring at the outset his intention to keep the revolution on track, without “deviations or personalism,” Morales nevertheless tried to steer a middle course between the Velasquista progressives on the Left and right-wing generals who displayed authoritarian tendencies corresponding to the military regimes in neighboring Bolivia (Bánzer) and Chile (Pinochet). The new head of state also sought, in counterpoint to Velasco, to enhance the decision making role of the junta while downplaying his own position to increase interservice consultation and harmonize contending viewpoints within the armed forces.

In economic policy, Morales, the fiscally conservative, former finance minister, pressured by the United States and the International Monetary Fund (IMF), began to institute measures toward liberalization, that is, to reduce the role of the state and correspondingly enhance that of the market economy. Doing so entailed initial efforts to make public enterprises more profitable and austerity measures to reduce the growing budget deficit, to meet the problem of servicing the now $4 billion foreign debt, and to encourage greater foreign and private investments. Workers and the public in general were asked by the new government to accept sacrifices, such as reductions in state subsidies and social expenditures, made necessary, it was argued, by the onset of a global recession. Morales also argued that greater austerity was necessary to “consolidate the revolution.”

Liberalization was likewise cautiously extended to the political realm, a reaching out to the traditional parties that Velasco had shunned. Morales took a significant step in this direction on a trip to Trujillo in April-May 1976. Putting aside the fact that his father had been killed by Apristas in

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