Peru is a sovereign country on the western side of South America, bordered by Chile to the south, Bolivia to the southeast, Ecuador and Colombia to the north, and Brazil to the east. It is not landlocked as the Pacific Ocean borders it in the west. The name Peru originated from Birú coined from a local ruler living near the Bay of San in Panama during the 16th century. Currently, the country’s population is approximated to be 29 million. The county got its independence from the Spanish colonial rule in 1821 and became a republic after winning the Peruvian war (History of Peru, n.d). Since then the country has gone through political, economic, social transformation. Peru is multiethnic and the main language spoken is Spanish. The major economic activities are agriculture, fishing, mining, and manufacturing. Peru, as known today is seen to have been born in 1895.
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The 20th century Peru
In 1890 a plan was formulated to bail Peru out of bankruptcy. The control of the nation’s economy was facilitated by the Peruvian Corporation through donations. Other foreign companies were also given the green light to operate in the countries ports as well as extract rubber from the country’s mines, especially in the Amazon Basin. With the rule of Nicolas de Pierola, economic and political stability seemed to be realized in the last years of the 19th century.
During the early 20th century, Peru was headed by an oligarchic clan, which was a group of prominent businessmen, and owners of land who controlled a great part of the Peruvian economy. They controlled all the major economic activities such as the sugar-growing, and the rubber resources, leaving the common Peruvians out of the economic growth. And the rubber resources, leaving the common Peruvians out of the economic growth.
Augusto Leguia, who was a powerful oligarch and controlling the New York Insurance Company and the British Sugar Company assumed power of the state in 1908 after being elected as president. Augusto Leguia was never interested in the commoners e.g. the mountain peasants and the jungle Indians, whose lives continued to be more difficult. In his rule, he experienced the largest Indian rebellion through a nine day strike of workers in 1919 and the first labor movement in 1929 (Alexander & Parker, 2007, p.2). He was a dictator and he managed to change the constitution to enable him be re-elected for a second, third and forth term. During the first year in his fourth term (1930), a military coup displaced him from power, because of the collapse of the stock exchange market and US funding through the American Popular Revolutionary Alliance (APRA).
Markets for Peru’s export products such as oil, silver, sugar, coffee and cotton, had been greatly affected by declines at this time. Things were made even worse by an uprising initiated by the Trujillos, who were the middle class citizens of Peru demanding better conditions of work in the sugar estates, necessitating the army interventions, a result of which was massive deaths (Parker, 1998, p.157). APRA which had initiated Trujillo uprisings had their leader Haya de la Torre, who led the country during World War II and in 1945, Dr. Bustemante was elected president supported by APRA.
In the 1940’s, the cost of living had hit the highs of 262% and Dr. Bustemante was ousted by General Odria in a 1948 coup de tat. General Odria left office in 1956, where political people threatened the oligarchic control. Fernando Belaunde, with his movement National Youth Front, defeated Manuel Prado following the supported of APRA (who were in support of oligarchies) in 1956 (Grenville, 2005, p.681).
The economy had been heavily affected and cases such as the 1952 strikes and riots confirmed it. Hugo Blanco, a reformist created 150 syndicates where peasant farmers began working in their own plots and refusing to work for land owners, who became bankrupt. Hugo was arrested in 1963, leading to heavy peasant riots which marked the start of the agrarian reform in Peru.
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The 1962 elections had got Peru by surprise with neither of the contestant Haya de la Torre, Belaunde and Odria emerging as the convincing winner thus leading to army taking control for one year. Belaunde was elected in 1963 and began dismantling the agrarian reforms with the help of inflowing foreign funds. During the first dew years of his rule, inflation had risen so high that foreign funding was eliminated, followed by a coup de tat in 1968 and ouster in 1975 by General Francisco Morales Bermudez who was the pioneer of democracy to Peru (Grenville, 2005, p.683).
The history of Peru has very clear reflections in its current culture. The agrarian revolution introduced by Hugo has been the backbone of the reforms in the country, whose economy relies on agriculture and mining for growth. The various systems of capitalism experienced in history have been dealt with, and the inflation and huge debt (still being repaid) have contributed to the rise of poverty and low standards of living for the citizens (Box,& Murphy, 2003, p.579).
With huge external debt and cases of corruption, dictatorship and global challenges, the country’s muscle is too dented to realize its dream. Good governance is the key to development and Peru has not attained the levels of good governance. Like all third world countries, the inadequate technology and in adequate foreign investments from first world countries has hindered development. Even where the developed countries have invested in Peru, their motives have left a lot to be desired as they exploit resources in the country and leave the country highly indebted just as it happens in other less developed countries (Wu & World Bank, 2001, p.13). The drug trafficking is not a new terminology in the country, and like any other developing country, the trade is plotted and conducted by the foreign able governments who destroy the reputation of these countries.
In the 1980’s, Peru as a country was affected by huge external debts, high inflation, drug trafficking, and periodic political violence. Conflicts between guerrillas and state forces caused massive human loss. The decade 1990-2000 saw Peru move a step forward in recovery although blames of corruption, dictatorship and violation of human rights tainted the president Alberto Fujimori. With the end of Fujimori’s Era, Peru has been involved in infighting, corruption, although currently recently, there has been extensive reforms aimed at sustaining the growth of the economic, following the take over of power by president elect Alan García in 2006.
Peru is an emerging market economy, and its economy has been influence by exports, where most of the income is used to service external debts. The economic policies have been widely variable and include the agrarian reforms, economic planning systems, state-owned sectors, ending of price control, restrictions on foreign direct investment, and state-owned companies. These policies have led to sustained growth of economy. The economy is supported by the services sector, manufacturing and extractive industries. The economy of Peru has been favored by macroeconomic stability, improved trade terms, and higher investment and consumption rates. It mainly exports copper, gold, zinc, textiles and fish meal (Wu, & World Bank, 2001 p.11).
Reforms such as those Hugo tried to introduce into Peru to try to bridge the gap between the rich and poor have been met with a lot of criticism especially by the rich who want to maintain the situation for their own benefits. The leaders have been quick to adopt certain ideologies and policies that will oppress the poor so as to receive funds from foreign donors, their main aim being misappropriating these funds.
Peru is a case study of many countries in the world that are faced by the influence of foreign countries. This makes the country a perfect example of injustices of third world countries emanating from the exploitative powers of the developed countries. Like other third world countries, Peru is burdened by huge external debts that are misused by the government through corruption and ‘white elephant’ projects, leading to massive economic tragedies and backwardness. Repaying these loans becomes difficult, despite the huge potential of resources that can not be exploited due to lack of capital. These countries are always net exporters of raw materials and importers of finished goods. With this difference in investments, the gap between the poor and the rich will always be there unless comprehensive policies are established to enhance third world empowerment to exploit the resources available for their own self sufficiency.
Alexander, R. J. & Parker, E. M. (2007). A history of organized labor in Peru and Ecuador. Westport, Praeger Publishers. Web.
Box, B. & Murphy, A. (2003). Peru handbook. Bath, Footprint travel guides. Web.
Grenville, J. A. S. (2005). A history of the world from the 20th to the 21st century. 5th ed. N.Y, Routredge. Web.
History of Peru – The 20th century. (N.d). History of Peru – The 20th century. 2009. Web.
Parker, D. S. (1998). The idea of the middle class: white-collar workers and Peruvian society 1900-1950. Pennsylvania, Pennsylvania State University. Web.
Wu, K. & World Bank. (2001). Peruvian education at a crossroads: challenges and opportunities for the 21st Century. New York, World Bank. Web.