Date: Tue, 10 Sep 1996 22:12:23 GMT
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Subject: NACLA: Peru: The Enigmas of Fujimori

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** Topic: The Enigmas of Fujimori by Guillermo Rochabrun: July/August **
** Written 1:39 PM Aug 27, 1996 by nacla in **
1996 Reprinted from the July/August 1996 issue of NACLA Report on the Americas.
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Deciphering The Enigmas of Alberto Fujimori

By Guillermo Rochabrun, in NACLA
Report on the Americas,
July/August, 1996

Guillermo Rochabrun is professor of sociology at the Catholic University in Lima, Peru. Translated from the Spanish by NACLA.

How can we understand the many enigmas surrounding the presidency of Alberto Fujimori? Emerging practically out of nowhere, he defeated novelist Mario Vargas Llosa in the 1990 presidential race. While previous administrations had suffered one policy failure after another in dealing with the country's economic and political crises, Fujimori had notable "success" stabilizing the country's erratic economy and defeating the Shining Path guerrilla insurgency. Finally and perhaps most puzzling, despite the high social costs of his economic model and the authoritarian style that has characterized his government,JFujimori has received consistently high popularity ratings from Peruvians of all social classes.

Fujimori, an obscure agronomist and university professor of mathematics, was a novice in the political arena when he decided to participate in the 1990 general elections. At the time, Peruvian law permitted a presidential candidate to run simultaneously for senate office. Fujimori ran as an independent candidate for both seats, but it was obvious that his aspiration was to become a member of parliament. Vargas Llosa, who was backed by Peru's principal power brokers and the U.S. establishment, was widely favored to win. To everyone's surprise, Fujimori came in second behind Vargas Llosa in the first-round vote, and went on to defeat him in the second round. New social and political circumstances made Fujimori's apparent "outsider" status attractive to voters fed up with politics as usual.

Fujimori took power at an extremely difficult and complex moment in Peru's history. The corruption and mismanagement of the Alan Garcia administration (1985-1990) had led to a sharp deterioration of state institutions and of the public's confidence in government. The government was also widely discredited for its inability to quell Shining Path's violence. Peru was in dire economic straits as well. In retaliation for Garcia's refusal to pay the external debt, the International Monetary Fund (IMF) declared Peru "ineligible" to receive further international loans. The gross domestic product (GDP) fell 8.3% in 1988, and another 11.9% in 1989. Hyperinflation soared, from 1,722% in 1988, to 2,775% in 1989, and 7,650% in 1990.

Not only did Fujimori face a mountain of problems that had piled up over the years, but he assumed power in a virtual vacuum. He had no political program, no team of advisors, and no contacts or agreements with the powers-that-be--the business sector, the multilateral lending institutions, the political parties, and the media. (The one critical exception was the military.) Many observers expected his adminstration to be a total flop, while others feared he would be a mere figurehead. Those prognostications were proven wrong.

Shortly after taking office, Fujimori--who had waged an electoral campaign against neoliberal reform--made an about- face and implemented the very orthodox economic policies he had rejected. He did so in an extremely harsh fashion, in an attempt to stabilize the economy and bring inflation under control. In the short term, these measures aggravated the recession and further jacked up inflation--gasoline prices increased 30 times overnight, while inflation for the month of August alone was 400%. In a country of 22 million inhabitants, the number of people living in poverty jumped from 9 to 14 million.

The administration gradually introduced new measures that virtually eliminated all forms of legal protection for salaried workers. Job security was completely eliminated, and new rules governing contracts were established that reduced employers' obligations to their workers. For example, workers under 24 years of age are now considered "apprentices," which means they can receive salaries below the minimum wage, and they are not covered by the social-security system.

Once inflation was brought under control and the economy had stabilized, the government turned its attention to satisfying Peru's international creditors.1 Paying the external debt-- referred to in the government's jargon as "international reinsertion"--was the top priority. One of the government's principal economic advisors joked about putting on knee pads before his meetings with the IMF to discuss Peru's debt.

An IMF-mandated tax reform was implemented to generate revenue to pay off Peru's debt arrears. A campaign against tax evasion led by the new tax agency, the National Superintendency of Tax Administration (SUNAT), helped increase the government's coffers. Since 1990, SUNAT's directors have been trying to generate greater awareness of the importance of paying taxes and to link paying taxes to a broader concept of citizenship. The central government, however, seems interested only in collecting--as quickly and cheaply as possible--a certain percentage of the country's GDP, in order to comply with the annual agreements established by the IMF as part of Peru's debt-repayment plan. Each year, the government has agreed to higher rates: 10% in 1993, 13% in 1995, and 14.1% in 1996.

The other component of international reinsertion was the market opening. To that end, Fujimori implemented the following policies: trade liberalization, drastic tariff reductions, and the privatization of state-run enterprises. His administration eliminated government regulations and subsidies, and the market now determines the cost of public services.

Paralleling his implementation of an orthodox neoliberal agenda was Fujimori's increasing intolerance for democratic checks and balances. Since the mid-1980s, the military has had a strong presence in national life due to its role in fighting the counterinsurgency war. Through Political- Military Commands established in areas declared as emergency zones, for example, the military exercises direct governmental control in more than a third of the country. The military's dominion over vast parts of the country resulted in grave and systematic abuses of human rights in the 1980s. Under Fujimori, military control over counterinsurgency strategy intensified, prompting a further deterioriation in the government's human rights record. Later, however, in an important shift in strategy, the government tried to win support from the civilian population by engaging the military in civic-action campaigns in rural villages throughout the country as well as in shantytowns in Lima.

Fujimori relies on information gathered by the National Intelligence Service (SIN) to maintain his lock on power. The SIN, consequently, has accrued a great deal of power and influence within his administration. It monitors the telephone conversations of key figures, both outside and within the government. This includes the surveillance of members of the armed forces in order to prevent any organized resistance against the pro-Fujimori High Command. The SIN also tries to mold public opinion in the government's favor. It does so through public-opinion polls, hiring sympathetic journalists for government-controlled media outlets, controlling important TV and radio programs, and planting rumors and staging events to distract public attention when necessary.

These authoritarian tendencies culminated in Fujimori's coup de main on April 5, 1992. He abruptly dissolved Congress and the judiciary, concentrating all the state's powers in the hands of the president. The cabinet of ministers became virtually irrelevant as Fujimori came to rely on a small number of advisors who had his absolute personal confidence.

Fujimori justified the dissolution of the constitutional order by blaming Congress for its "irresponsible, sterile, antihistoric and antipatriotic" behavior, "which favors the interests of small groups and party leaders over the interests of Peru." He also pointed to a corrupt and inefficient system of justice, which he blamed for the release of convicted drug traffickers and guerrillas. More concretely, he criticized Congress for overturning a series of decree laws that he had proposed. It was intolerable, he said, that several laws designed to attack drug trafficking and its corrupting influence on government officials were vetoed. Nor was Fujimori willing to allow Congress to pass laws that he saw as imposing unacceptable limits on his ability to govern, such as one measure reducing the president's discretion in declaring different regions as emergency zones.

What Fujimori was announcing--without naming it--was a revolution of sorts. With the new powers vested in the office of the presidency as a result of the coup, he sought no less than a radical modification of the structure of governance. He delineated the following objectives: greater legislative efficacy, an end to corruption within the justice system, the modernization of the state bureaucracy, an end to terrorism and drug trafficking, and the installation of a market economy which, in the medium term, would substantially improve living standards. Democracy was a worthy goal, he said, but it was impossible to obtain "true" democracy with Peru's "deceitful" formal democratic institutions.2

The coup confirmed one of the most notable characteristics of Fujimori's administration: its disdain for legal formalities. Fujimori systematically alters the rules of the game whenever he deems it necessary--either by creating new laws and applying them retroactively, or by modifying old ones to suit his purposes. For example, while Fujimori introduced the public's right to call a referendum on unpopular laws into the new Constitution, his henchmen in Congress have added new legal restrictions to impede the opposition from holding a referendum on the privatization of Petro-Peru, the state- owned oil company.

The sudden capture of Abimael Guzman and other top Shining Path leaders in September, 1992 was a watershed for the Fujimori regime. Shining Path's military activities declined sharply thereafter, and it soon became evident that they no longer represented a major threat to the Peruvian state. New and repatriated capital began pouring into Peru, and the privatization process began to gather steam.

The economy took off in the next two years. Peru's GDP grew rapidly, reaching 6.9% in 1993 and 12.9% in 1994. While these high growth rates have been lauded both locally and internationally as a sign of Peru's definitive economic recovery, these figures actually reflect a return to Peru's per capita GDP levels in 1989 and 1990. This growth is based on a boom in construction--due primarily to a dramatic increase in government-funded public-works projects, largely designed to contribute to Fujimori's reelection--and its "multiplier effects." An increased demand for fishmeal exports also helped boost the economy. At the same time, however, the government did not try to modernize Peru's productive capacity. The recovery of the fishmeal industry reinforces a trend that had been apparent even before Fujimori's market opening: Peru's return to its traditional reliance on primary-product exports.

The improved economic indicators for 1993 and 1994 led to a slight increase in salaries, but there was no visible effect on employment. Poverty remained a daunting problem, and continued to affect more than half the population. Surprisingly, this has not produced a generalized disorientation or anomie, much less frustration. In fact, the population in general--including the poor--began to feel optimistic about the country's future.

While some may doubt the reliability of public opinion polls in Peru, it is indisputable that Fujimori enjoys steady, though not militant, support from all sectors of the population and all parts of the country.3 Fujimori's long- term and widespread popularity over the years--given the high social costs of his economic policies and his authoritarian governing style--has been one of the greatest enigmas surrounding his regime.

A staggering 80% of the population, for example, supported Fujimori's 1992 coup. It was international pressure, not local protests, that forced Fujimori to call congressional elections in November, 1992. After obtaining a congressional majority--by a slim margin--in those elections, Fujimori promulgated a constitution tailored to his wishes. The new Constitution permitted Fujimori to run for reelection in 1995, a race which he handily won.

Some observers argue that the root of Fujimori's wide popular support is his authoritarianism, which they say is essentially a reflection of the authoritarianism inherent in Peruvian culture.4 If this were the case, the population's clear rejection of some of Fujimori's most authoritarian measures would be inexplicable. The amnesty law that the president pushed through Congress in June, 1995 is a clear example. The amnesty, which ended all judicial proceedings against military and police officials accused of human rights violations in the context of the counterinsurgency war, was opposed by 87% of the population according to one poll. The death penalty--enshrined in Peru's new Constitution in cases of treason, but as of yet unapplied--is also unpopular among most Peruvians.

Others explain his successful reelection in 1995 by pointing to the vast resources at his disposal through state-run programs like Foncodes. In reality, governments of all stripes in Peru have had similar advantages. Fujimori was not the first to shore up his support by inaugurating public- works projects, and doling out foodstuffs and other material goods, including luxury items like computers. But in contrast with his predecessors, Fujimori did not use public-works projects and hand-outs as a tactic to cover up previous policy failures or to win last-minute support. The electorate voted for Fujimori in 1995 because they felt that he had effectively resolved the country's two central problems: hyperinflation and guerrilla violence.

It's important to understand how hyperinflation and violence profoundly affected people's daily lives. Hyperinflation meant more than just a decline in purchasing power; it signified continuous impoverishment, which sapped people's energy and made it impossible to think in terms of the future. By stabilizing prices, Fujimori helped ease people's anxieties, and made living in poverty more tolerable. People knew that they could count on their resources, however meager, having the same value tomorrow as they had today, and maybe even a little more. By contrast, the dramatic decline in the quality of public education and health care are not forefront in people's minds when judging the current situation.

The growing violence of the Shining Path created a generalized feeling of insecurity among the population. In the late 1980s, Shining Path's military activities in Lima began to escalate dramatically. Once limited to occasional acts of sabotage and selective assassinations, Lima was suddenly rocked by car bombs and "armed strikes." The anxiety was heightened because this was not a war in which each individual had a clearly defined position in the conflict. Most Peruvians saw Shining Path as distant, and did not condone their violent methods. This was especially true among the urban poor, who were unwilling to become actively engaged in the group. From their perspective, Shining Path brought few benefits and entailed grave risks of being detained by the police or the military. At the same time, however, the urban poor's attitude toward Shining Path's violence was not simple condemnation or rejection. "In the violence exercised by others against the elites," one study concluded, "the urban poor seem to unleash their feelings of hostility and discontent against the rich, the politicians, and the authorities."5 By vanquishing Shining Path, the Fujimori regime alleviated a major source of collective anguish.

Fujimori's popularity cannot be explained without taking into account the decline of various forms of opposition. Over the past decade, Peruvians have witnessed the disintegration of different forms of social organization that were active in Peruvian politics since the 1960s, in particular trade-union confederations and their local affiliates. The decline in union organizing is reflected in the steep reduction in strikes. The number of man-hours lost due to strikes went from 36 million in 1978 and 38 million in 1983, then dropped to 15 million in 1990, to barely a million in 1995.6

The labor movement was devastated by Peru's prolonged and profound economic crisis, as well as by the guerrilla war. The virtual elimination of legal protections for workers and the reduction of the state's mediating role in business-labor negotiations further weakened labor's position. As a result of the state's incapacity to respond to social demands, many people began searching for solutions to their problems in informal networks, family relationships, churches, and non- governmental organizations. Peruvians have learned to resolve problems on their own without the help of the state or politicians. Under these new circumstances--and as employment opportunities in government and other sectors of the formal economy have shrivelled up--a significant portion of the population seems to take solace in a growing "neoliberal" common sense that holds that it is better to be your own boss than to be a dependent wage worker.

These factors also contributed to the long-term discrediting of Peru's political parties. If one single element were to define the current political conjuncture, it is the virtual disappearance of the "traditional" political parties, at least if measured by their performance in recent elections. In 1980, for example, the centrist APRA and the conservative Popular Action (AP) and Popular Christian Party (PPC) together captured more than 80% of the vote. The electoral rise of the left, particularly after the formation of a coalition of Marxist and progressive parties in the United Left (IU) in 1983, displaced AP and PPC. APRA and the IU alone garnered 75% of the vote in the mid-1980s. By 1995, however, all these parties combined captured under 10% of the vote. The IU, after winning up to a third of the vote in the 1980s, got a miniscule 0.57% in 1995.

In a country where all the development models have been tried without success, politics has lost the meaning it once had in the popular imagination. "Identification with--and not admiration for or consideration of--a candidate, is key to understanding the changes in Peru's political culture," says journalist Jose Maria Salcedo. "People no longer vote for what candidates offer, but for what the candidate is or appears to be. Peruvians, projecting their own virtues and defects on the candidates, now vote for those they feel are close to them and with whom they most identify. 'The political,' as a result, has become devalued as something far removed from daily life."7

This devaluation of politics is reflected weekly in television comedy programs, which make fun of the country's politicians. Aside from their frequent appearances on these popular shows during election time, politicians engage in few other activities that bring them in touch with the electorate. "The origin of the crisis of the political parties is that they have been acting behind the back of the country that they claim to represent," says Carlos Ferrero, one of the few Congress members from Fujimori's coalition with a certain degree of independence. "They thought the people wanted a legislature independent from the executive, but the people believed that it was more important that the legislature help them obtain access to water and sewerage. The parties believed that if there were frequent elections, everyone would be 'content' with the democratic system. What people really wanted was a system that provided them with security and order. The parties thus sought to 'defend' things that the people weren't really interested in, and they showed little interest in addressing the real problems that people suffered on a daily basis."8

Perhaps the first symptom of the fatal decline of the traditional parties was the wane of party-line voting: since 1980, voter preferences have fluctuated wildly from one election to another. This disenchantment then began to translate itself into backing for candidates who cast themselves as "ordinary" people, like any neighbor on the street. This was the case for Alfonso Barrantes, the leader of the IU coalition who won the mayorship of Lima in 1983; Ricardo Belmont, the first self-declared "independent" who was elected as Lima's mayor in 1990 and 1993; and finally, Fujimori.

Fujimori is not a charismatic leader who compels absolute support. On the contrary, people carefully think through their backing for him. In a poll conducted last November, for example, while 75% of the people said that they approved of Fujimori's administration, in a separate question, only 27.5% said they were sympathetic to Fujimori and a mere 2.7% declared themselves "Fujimoristas." A hefty 56% said they were capable of supporting policies they considered positive, and criticizing those with which they disagreed.9

Fujimori's economic successes over the last few years seem to be in danger. Last year, the IMF began to worry that Peru's high growth rates were contributing to a growing trade deficit. As a result, it began to pressure the Fujimori government to "cool down" the economy, primarily through a cut in government spending. The growth rate has since dropped to approximately 6.9% in 1995 and -1.6% in the first quarter of 1996.10 Given ongoing concerns about the deficit, it seems unlikely that this downward trend will be reversed any time soon.

The economic downturn has been paralleled by a relative decline in Fujimori's popular support in the polls. According to Apoyo, an independent polling firm, Fujimori's popularity has dropped from 73% in December, 1995, to 59% in May, 1996. This decline is more notable given the May announcements of Peru's incorporation into the Brady debt-repayment plan and large new investments in gas exploration by Shell-Mobil. Clashes between protesters and the police have also become more common, as fishermen, construction workers, municipal- government workers, university students and retirees have taken to the streets to protest their declining living standards. According to one study, 68% of Peruvians now live in absolute poverty.11

A coherent and intelligent opposition would be able to take advantage of a moment like this when the economic tide is turning. And yet, the opposition has failed to gain the political upper hand even once since 1990. Fujimori has dealt a further blow to the opposition by passing new electoral laws which deny party status to any political group that obtained under 5% of the vote in 1995. As a result, only the Union For Peru (UPP), led by Javier Perez de Cuellar, and Popular Action (AP), which registered as a party under the previous legislation, are now legally recognized parties. All other political groups must obtain at least half a million signatures in order to participate in future elections.

Without inflation, without Shining Path, and without significant levels of economic growth, an era is coming to a close. Fujimori may have successfully demolished the previous order, but it is doubtful whether he is capable of building new institutions suitable for the changing times and circumstances. Beyond specific aspects of public policy that are government priorities, the country's public administration and public services are in a state of utter chaos.

The "Fujimori phenomenon" is a consummated fact, though it is too soon to know how it will be judged by history. Perhaps Fujimori will be seen as the president who did the "dirty work" no one else dared to, in order to unblock Peru's clogged capitalist development. This meant doing away with everything or everyone who got in his way: former allies, the rule of law, Congress, and the Constitution.

But Fujimori now faces a new moment. He can no longer justify his actions by appealing to the war against Shining Path and inflation. Opposition leaders and groups, which are now almost entirely unrelated to the "traditional" parties, have a golden opportunity--for the first time in six years--to build a viable opposition movement and assume the political initiative. Whether or not they will be able to do so, however, remains an open question.

The De Facto Powers behind Fujimori's Regime by G. Rochabrun

Fujimori takes great pride in not being beholden to the interests of any particular group. He did not, for example, take power by cutting deals with political parties or the business class. While Alan Garcia's APRA party and the left encouraged their followers to vote for Fujimori in the second-round elections in 1990, they did so voluntarily, without establishing any formal agreement with Fujimori. The business class, which had widely backed Vargas Llosa's neoliberal platform, was highly skeptical of Fujimori at first.

Two fundamental pillars sustain the Fujimori regime: the multilateral lending institutions, such as the IMF and the World Bank, and the military. The IMF has been the dominant player in defining Fujimori's economic model and the state reforms he has implemented. While he has wavered from neoliberal orthodoxy on occasion--primarily during election time in order to pump up public spending--Fujimori has on the whole been a faithful follower of the neoliberal playbook.

The military has acquired an inordinate amount of power in Peruvian politics under the Fujimori regime. Along with the National Intelligence Service (SIN), the military has been Fujimori's most reliable domestic ally. In exchange for the military's support, Fujimori has granted it broad powers to defeat the Shining Path insurgency, as well as protect individual officers from investigations into human rights abuses. While some question Fujimori's independence, it is the military that obeys Fujimori, not vice versa. In contrast to 1968, when a group of military officers took power and launched an ambitious series of reforms, today no sector of the Peruvian military has an alternative project for the country's future.

Fujimori is extremely media-savvy. He carefully defines his image, public discourse, and the issues he addresses with the help of a team of Argentine publicity experts. The media-- both print and television--have, with few exceptions, demonstrated almost unconditional support for Fujimori. Only a handful of independent journalists have ventured to criticize the president directly. While the government has thrown its weight around to limit the presence of these critical media voices,lately it has grown even more intolerant of direct criticism. For example, selective audits by the tax agency, SUNAT, have forced several opposition media outlets into silence. Such strong-arm tactics serve as a warning to others who would dare to criticize the government. The manipulation of government-sponsored as well as private advertising is another way the government has tried to tame the opposition media. The president's Argentine publicity experts serve as intermediaries for high-government officials, pulling advertisements from media outlets that the government sees as being overly critical.

In terms of day-to-day governing, Fujimori depends on a small circle of professionals who are personally loyal to him. Many are from Peru's small, tight-knit Japanese community. One of Fujimori's most important and faithful advisors was his brother, Santiago Fujimori. In April, he was relieved of his duties--allegedly due to clashes over policy with Fujimori's other key advisors--and replaced by another brother, Pedro. Another key figure from the Japanese community is Jaime Yoshiyama, a Fujimori loyalist who served as president of the previous Congress, and who is currently the head of the powerful Ministry of the Presidency. Through this position, Yoshiyama controls Foncodes, the government's social-investment fund. This dependence on a small clique of faithful advisors reflects Fujimori's aversion to existing political parties, and his unwillingness to compromise his independent profile by creating his own political organization.

Business and congressional leaders linked to Opus Dei, a conservative Catholic faction, are another important reservoir of support for Fujimori. The Catholic Church hierarchy, on the other hand, despite its conservative leadership, has had tense relations with the government largely because of Fujimori's advocacy of family-planning programs. In any event, it is notable that Fujimori has been able to confront a highly respected institution like the Catholic Church without damaging his popularity. In fact, since Fujimori's first term in office, the Catholic Church's mediating role in politics has diminished considerably.

With a few exceptions, Fujimori's congressional majority is comprised of uncharismatic henchmen who defend any project or action that the president demands. Many of them own businesses that have benefited from the power that congressional office bestows. Technical advisors to several key government ministries--in particular the Ministry of Economy--have benefited from their positions in similar fashion. These interests, however, do not determine the government's actions.

The same is true for big business. The Peruvian business elite shares a tacit ideological consensus with the Fujimori regime regarding fundamental issues such as trade liberalization, fiscal austerity, and an anti-party stance. Important leaders of the Peruvian business community have also held high positions in Fujimori's government. It would, however, be an exaggeration to speak of a coalition between government and business because the two are clearly not equal partners.1 Business's subordinate position is linked to the increasingly fractured state of the Peruvian business community over the past 50 years. As a result of these internal divisions, business interests were increasingly under-represented by the existing political parties. In that regard, the failure of Vargas Llosa's conservative political coalition was a lost opportunity for the right.

The business community supports the Fujimori regime--although not without some misgivings--at least partly because of its fear of the past. It does not, however, give the government orders. Fujimori clearly retains the upper hand. His government defines its own policy priorities and initiatives- -which coincide broadly with the priorities of the IMF, international investors, and the Peruvian financial elite.


1. Manuel Castillo and Andres Quispe, Grupos de interes empresariales y ajuste estructural: Transicion, adaptacion y conflicto economico (1990-1993), unpublished manuscript.

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