Peru’s Honeymoon With Garcia in Peril : Problems With Economy, Military and Rebels Loom for President

This nation’s brash young president is a straightforward man. When Alan Garcia is happy, he sings. When he is angry, he fights.

On a recent state visit to Mexico, Garcia shanghaied a passing mariachi band at a reception. Peruvians were quick to note that the song he enjoyed singing most was a wry ballad called “I Am the King.”

Back in Lima, Garcia encountered air force commander Luis Abram lobbying against creation of a unified defense ministry and in the process bad-mouthing his president. Garcia noisily fired him.

In the spat that followed, air force jets twice buzzed the presidential palace, and the army hurried tanks there to protect Garcia. Abram finally went peacefully, and the coup rumors went with him. It was another victory for Garcia, one of many in 21 hectic months of government. In that time his popularity has been little short of regal.

Now, though, pressures are beginning to build for the 37-year-old dynamo. For the short run Garcia looks solid, but the second half of his five-year term may generate more struggle than song.

Peru’s economic future, strained relations with the military and an unchecked guerrilla rampage are discordant notes on Garcia’s scale.

Honeymoon Ending

“It has been an extraordinary honeymoon, but it is ending,” said Sen. Manuel Ulloa, a conservative member of the minority opposition in Congress.

Inheriting a dispirited country, Garcia stoked the economy to a record 9% growth in 1986. Raising wages and controlling prices, he restricted foreign debt repayment and invested the dollars at home.

This year’s growth, estimated at around 6%, also looks good by the standards of either Peru or the rest of Latin America, but beyond that lies uncertainty.

Curtailment of debt repayment has meant reduced foreign credit. Critics as diverse as the conservative World Bank and Garcia’s Marxist domestic opponents sense a downturn coming. Falling reserves, a growing fiscal deficit and a shortfall of new investments point to potential problems of stagnation and revived inflation.

Government planners say initiatives are afoot to head off an economic crisis. The private sector, pleased by its early profits but discomfited by what it considers Garcia’s high-handed interventionism, is leery.

So, too, is there tension between Garcia and the armed forces, which last ruled Peru from 1968 to 1980. Garcia has leaned harder on Peru’s soldiers than his civilian predecessors ever dared.

Budgets Trimmed

He has cut budgets, held down pay and prerogatives, manipulated promotions, reduced purchases of advanced jet fighters, aborted costly overhaul of the navy’s white elephant flagship, fired one general for human rights abuses and ordered charges against members of a militarized police force responsible for the massacre of guerrilla prisoners after a jail riot last year.

Most recently, he called Congress into special session to approve his plan to consolidate the war, navy and air force ministries into a single ministry of defense. The navy and the air force objected, fearing domination by the larger army within the new ministry.

Implicit in the resistance was the military disdain for greater civilian control, which, apart from the increased efficiency and economy of a single ministry ballyhooed by government spokesman, was exactly what Garcia had in mind.

Abram and some retired officer-lobbyists made the political rounds in Lima, criticizing not only the ministry but also what they called Garcia’s scheme to politicize the armed forces. They harped on Garcia’s supposed instability and what they call his authoritarian tendencies.

The troublemaking came to naught: There is no civilian support for a coup as long as economic reverses are still only possibilities and Garcia’s popularity remains high.

The confrontation, though, can hardly have improved Garcia’s relations with a military restive both with his assertiveness and its own failure to conquer Maoist insurgents of a band called Sendero Luminoso (Shining Path).

Seven years after launching their fight, the guerrillas are stronger than ever. Their rampages are now routinely felt not only in the Andes but also in the major cities.

On Sunday, for example, 10 soldiers and four civilians were killed near the highlands capital of Huancavelica, 155 miles southeast of Lima, when Maoist rebels ambushed a troop truck.

Garcia insists that human rights be respected while demanding that the army root the guerrillas out.

Thus far, Garcia has proved a leader of exceptional charisma and great resourcefulness and it now looks as though he will need large new doses of each.

Buenos Aires bureau chief Montalbano was recently on assignment in Peru.