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When the Spanish landed in 1531, Peru's territory was the nucleus of the highly developed Inca civilization. Centered at Cuzco, the Inca Empire extended over a vast region from northern Ecuador to central Chile. In search of Inca wealth, the Spanish explorer Francisco Pizarro, who arrived in the territory after the Incas had fought a debilitating civil war, conquered the weakened people. The Spanish had captured the Incan capital at Cuzco by 1533 and consolidated their control by 1542. Gold and silver from the Andes enriched the conquerors, and Peru became the principal source of Spanish wealth and power in South America. 

Pizarro founded Lima in 1535. The viceroyalty established at Lima in 1542 initially had jurisdiction over all of South America except Portuguese Brazil. By the time of the wars of independence (1820-24), Lima had become the most distinguished and aristocratic colonial capital and the chief Spanish stronghold in America. 

Peru's independence movement was led by Jose de San Martin of Argentina and Simon Bolivar of Venezuela. San Martin proclaimed Peruvian independence from Spain on July 28, 1821. Emancipation was completed in December 1824, when Gen. Antonio Jose de Sucre defeated the Spanish troops at Ayacucho, ending Spanish rule in South America. Spain made futile attempts to regain its former colonies, but in 1879 it finally recognized Peru's independence. 

After independence, Peru and its neighbors engaged in intermittent territorial disputes. Chile's victory over Peru and Bolivia in the War of the Pacific (1879-83) resulted in a territorial settlement. Following a clash between Peru and Ecuador in 1941, the Rio Protocol--of which the United States is one of four guarantors--sought to establish the boundary between the two countries. Continuing boundary disagreement led to brief armed conflicts in early 1981 and early 1995, but in 1998 the governments of Peru and Ecuador signed a historic peace treaty and demarcated the border. In late 1999, the governments of Peru and Chile likewise finally implemented the last outstanding article of their 1929 border agreement. 

The military has been prominent in Peruvian history. Coups have repeatedly interrupted civilian constitutional government. The most recent period of military rule (1968-80) began when Gen. Juan Velasco Alvarado overthrew elected President Fernando Belaunde Terry of the Popular Action Party (AP). As part of what has been called the "first phase" of the military government's nationalist program, Velasco undertook an extensive agrarian reform program and nationalized the fishmeal industry, some petroleum companies, and several banks and mining firms. 

Because of Velasco's economic mismanagement and deteriorating health, he was replaced by Gen. Francisco Morales Bermudez Cerruti in 1975. Morales Bermudez moved the revolution into a more pragmatic "second phase," tempering the authoritarian abuses of the first phase and beginning the task of restoring the country's economy. Morales Bermudez presided over the return to civilian government in accordance with a new constitution drawn up in 1979. In the May 1980 elections, President Belaunde Terry was returned to office by an impressive plurality. 

Nagging economic problems left over from the military government persisted, worsened by an occurrence of the "El Niņo" weather phenomenon in 1982-83, which caused widespread flooding in some parts of the country, severe droughts in others, and decimated the schools of ocean fish that are one of the country's major resources. After a promising beginning, Belaunde's popularity eroded under the stress of inflation, economic hardship, and terrorism. 

During the 1980s, cultivation of illicit coca was established in large areas on the eastern Andean slope. Rural terrorism by Sendero Luminoso (SL) and the Tupac Amaru Revolutionary Movement (MRTA) increased during this time and derived significant financial support from alliances with the narcotraffickers. In 1985, the American Popular Revolutionary Alliance (APRA) won the presidential election, bringing Alan Garcia Perez to office. The transfer of the presidency from Belaunde to Garcia on July 28, 1985, was Peru's first exchange of power from one democratically elected leader to another in 40 years. 

Economic mismanagement by the Garcia administration led to hyperinflation from 1988 to 1990. Concerned about the economy, the increasing terrorist threat from Sendero Luminoso, and allegations of official corruption, voters chose a relatively unknown mathematician-turned-politician, Alberto Fujimori, as president in 1990. Fujimori implemented drastic orthodox measures that caused inflation to drop from 7,650% in 1990 to 139% in 1991. Faced with opposition to his reform efforts, Fujimori dissolved Congress in the "auto-coup" of April 4, 1992. He then revised the constitution; called new congressional elections; and implemented substantial economic reform, including privatization of numerous state-owned companies, creation of a more investment-friendly climate, and much improved management of the economy. Fujimoriu0092s constitutionally questionable decision to seek a third term and subsequent tainted victory in June 2000 brought political and economic turmoil. A bribery scandal that broke just weeks after he took office in July forced Fujimori to call new elections in which he would not run. Fujimori fled the country and resigned from office in November 2000. He currently resides in his parentsu0092 native Japan, amid controversy regarding his involvement in corruption scandals and human rights violations during his tenure as President. A caretaker government presided over new presidential and congressional elections, held in April 2001, which observers considered to be free and fair. The new elected government, led by President Alejandro Toledo, took office July 28, 2001. Regional and Municipal elections were held in November 2002, a majority of which were won by opposition or independent parties. 

The Toledo government has restored a high degree of democracy to Peru following the authoritarianism and corruption of the Fujimori years. Suspects tried by military courts during the war against terrorism (1980-2000) are now set to receive new trials in civilian courts. Trials of those accused of corruption and collusion in the corrupt dealings of the Fujimori years are underway. On August 28, 2003, the Truth and Reconciliation Commission (CVR), which had been charged with studying the roots of the violence of the 1980-2000 period, presented its formal report to the President. The Government of Peru is now weighing its response to the CVRu0092s recommendations that human rights violators be tried and that the government take measures to, in some fashion, indemnify parts of the population that suffered during those years, chiefly rural Peruvians of ethnically Indian descent. President Toledo has made a number of cabinet changes, partly in response to scandals but also to create a more effective government. His recently appointed Prime Minister, Beatriz Merino, is not from Toledo's party, nor are a majority of other ministers. Toledo's governing coalition has a plurality in Congress and must negotiate on an ad hoc basis with other parties to form majorities on legislative proposals. Toledo's popularity in the polls has suffered throughout the past year, due in part to scandals and in part to dissatisfaction amongst workers with their share of benefits from Peru's macroeconomic success. After strikes by teachers and agricultural producers led to nationwide road blockages in May 2003, Toledo declared a state of emergency that suspended some civil liberties and gave the military power to enforce order in 12 departments. The state of emergency has since been reduced to only the few areas where the Shining Path terrorist group was operating. Potential candidates and their parties are already beginning to maneuver with an eye on the 2006 elections. 

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