The popular mood in Peru has become more volatile with each passing month. Three successful nationwide general strikes in the last year - the first since 1919 - have emboldened workers, giving them a heightened sense of their own power. The parties of the revolutionary left made an impressive show of strength in last June's constituent Assembly elections by banding together in unprecedented united fronts. The Left captured 30% of the seats in the assembly, inaugurated on July 28 with the purported aim of developing a legal framework for a transition to civilian rule. The contradictory responses of the military regime of General Francisco Morales Bermudez - ranging from repressive attacks to conciliatory retreats - are an indication of its weakening hold over the country.
Although leftist leadership of the labor movement has been growing for a decade, the current popular upsurge was precipitated two years ago when Peru's creditors - 150 international banks - became alarmed over a possible default on Peru's staggering $8 billion foreign debt. International Monetary Fund (IMF) negotiators were rushed to Peru to devise an emergency austerity program, which has plunged the nation into a depression. Wages were frozen, the prices of basic necessities skyrocketed, social services were curtailed, and Peru's progressive labor legislation was dismantled.
Under the regime first led by the late Gen. Juan Velasco Alvarado, Peru looked like a solid and highly-profitable investment to foreign bankers. The populist military reformers were wiping out the last vestiges of feudalism and paving the way for expansion of industry. The new "rules of the game" under the military promised stability and a growing middle-class consumer goods market.
THE CRISIS ERUPTS
But one-by-one, the banks' investments went sour. Oil companies squandered a fortune doing exploratory drilling in the Peruvian jungle and came up dry. Pacific anchovy were overfished, nearly bankrupting the country's important fishmeal industry. The prices of copper and sugar - two of Peru's major exports - plummeted. And the ambitious plans for the Andean Common Market became bogged down in squabbles reflecting narrow national interests.
Today Peru's debt service alone requires about $1 billion a year, which amounts to over 55% of the country's export earnings. In addition, profits must be remitted in dollars to the multinational parents of Peruvian subsidiaries, machinery and raw materials for industry must be imported, and the army must pay the U.S. and Soviet Union for the massive armaments it has acquired. Without a penny of foreign exchange in the Central Bank, the government has turned to the IMF.
Although the military agreed in principle to the IMF austerity program, implementing it is another matter. Foreign subsidiaries are able to weather the economic crisis caused by the program, but the depression is bankrupting many of the Peruvian industrialists who were the regime's original allies. And each round of price increases has brought on a more organized popular uprising and government repression.
Wells Fargo Bank had the dubious honor of actually precipitating the latest violence when in mid-May it declared the government in default on payments due on the foreign debt. Maverick Los Angeles oilman Armand Hammer, one of the military regime's strongest U.S. supporters, had his Occidental Petroleum Co. rush in to pay Wells Fargo. But to please its creditors, the government was forced to decree price increases and other measures which reduced the standard of living of most Peruvians by about 60% overnight.
In the wake of these measures, spontaneous insurrections broke out in 28 cities, lasting for over a week and culminating in the May 22-23 general strike (the third and most successful in the space of a year). The government responded by imposing a state of siege and suspending constitutional guarantees. In the street fighting that ensued, the military left scores of workers dead, and hundreds wounded and arrested. The government's sweeping repression forced thousands of leftists and labor leaders underground, and a dozen prominent leftist leaders were deported. Although the state of siege has since been lifted and some political exiles have been allowed to return to the country, the government's more conciliatory stance could change at any signs of a new popular outburst.
U.S. and international response to the Peruvian situation has been mixed. The country's international bank creditors were so pleased with the government's determination to impose fiscal austerity that they decided on July 20 to defer Peru's payments on loans due for the rest of 1978. As the Carter Administration saw it, there were "unfortunate social consequences" in order to make the IMF policies stick. But the U.S. State Department and CIA appear to be quite alarmed at the insurrectionary mood of workers and peasants. An indication of this concern is the $182,650 covertly budgeted for Peru this year by the American Institute for Free Labor Development (AIFLD), an AFL-CIO supported agency with long-term ties to the CIA. AIFLD is working with the Confederacion de Trabajadores del Peru (CTP) which is dominated by the once-powerful APRA party (a self-styled "nationalist" party which has turned anti-communist). As AIFLD explains it, their program is "aimed at the rank and file in key unions being threatened by the communists!"(1)
A STRONGER LEFT
The growing strength of left forces in Peru's trade unions is good reason for the U.S. to be concerned. Although the Peruvian left is divided ideologically, one union after another has thrown out the APRA leadership and elected members of such marxist-leninist organizations as Vanguardia Revolucionaria, Partido Comunista Revolucionario, Patria Roja, MIR, and several Trotskyist groups. The miners, school teachers, steel workers, and most of the key industrial unions in Lima are now under revolutionary leadership.
Most of these organizations cooperated closely to lead the recent general strikes. And as the Constituent Assembly elections approached, they formed two united fronts - the U.D.P., a predominantly marxist-leninist grouping that won more than 4% of the vote, and the predominantly Trotskyist FOCEP. With the return from exile of charismatic Trotskyist leader Hugo Blanco (leader of the peasant insurrections of the mid-sixties), FOCEP was able to capture almost 12% of the vote.
Ironically, one of the casualties of the economic crisis has been Peru's pro-Moscow Communist Party (PCP-U), a longtime supporter of the military regime. Led by Jorge del Prado, the PCP-U had abandoned revolutionary politics in the 1950s in favor of a more comfortable role as mediators between capital and labor. The party's seasoned labor bureaucrats still hold tenuous control over Peru's largest labor confederation, the Confederacion General de Trabajadores del Per6 (CGTP), but they have been routed from many key unions.
In addition, the austerity program radicalized the PCP-U's own rank-and-file, stirring disenchantment with Del Prado's conservative leadership. Revolt within the party broke out into public view last January 23 when President Morales personally asked Del Prado to abort the second nationwide general strike (finally held one month later). That evening the PCP-U's own worker members stood in front of CGTP headquarters in Lima shouting, "Traitors! Betrayers of the working class!" Within four months most of the party's base in the labor and students movements had split to form the PCP-M (for majority) which is working with other revolutionary forces.
A TURNING POINT?
In this volatile atmosphere the future of the Constituent Assembly is uncertain at best. Designed by the military to placate its foes of both the right and left and to serve as a transition to civilian rule in 1980, the assembly is seen by the 30 leftist deputies as a forum from which to agitate for the workers' and peasants' demands. These include outright repudiation of the foreign debt, an end to austerity, and reinstatement of the 6,000 workers fired in the wake of the first general strike.
The biggest block of seats in the assembly is held by the APRA Party, led by its founder, populist Victor Haya de la Torre, who still has eyes on the presidency at the age of 85. The APRA electoral triumph, however, was a fluke, won only because of the last minute withdrawal of Peru's main liberal party from the elections. Recognizing its own failure to create a popular base of support, the military did all in its power to assure the triumph of APRA, which it views as the only political force capable of ruling Peru and preventing a socialist revolution.
The scene at the opening of the constituent assembly captured the mood in Peru today. As Hugo Blanco was sworn in as an Assembly deputy, striking school teachers battled police and Aprista thugs in the streets surrounding the Legislative Palace. Inside, as wafts of tear gas drifted through the galleries, Blanco took the oath by raising his fist and shouting: "For the working class, for the world socialist revolution, for the blood that was shed this morning - yes, I swear."
It was a show of defiance that not only reflected the left's strategy of turning the Assembly into a popular tribune; it also mirrored the uncompromising mood of increasingly well organized workers and peasants. _________________________________________
1. The quotations and budget data are from an AIFLD document, "Country Labor Plan: Peru, 1977-1978."
