A Big Setback for a Leader Used to Success

Michael Shifter is program director for democratic governance at the Inter-American Dialogue and adjunct professor of Latin America studies at Georgetown Univeristy

In 1990, Peruvian President Alberto Fujimori promised he would defeat his country's two insurgent groups by 1995. Most Peruvians were skeptical. The Tupac Amaru Revolutionary Movement and the larger and meaner Shining Path seemed intractable and had bedeviled his predecessors.

By 1995, however, Peruvians conceded, some grudgingly, that Fujimori had largely delivered on his promise. Utilizing better intelligence and a more effective counterinsurgency strategy, the Peruvian government had put many of the groups' leaders and members behind bars. After a harrowing decade of violence, at huge cost, Peru seemed to have emerged from its national nightmare. But Tupac Amaru's spectacular siege of the Japanese ambassador's residence in Lima last week was a dramatic reminder that the nightmare is not over.

Fujimori has been associated with some surprising successes: the capture of Tupac Amaru leader Victor Polay and, most significantly, Shining Path leader Abimael Guzman, both in 1992; the impressive economic turnaround, from nearly 8,000% inflation, in 1990, to economic stability and the highest growth rate in the world in 1994, and the resounding defeats, in consecutive elections, of two of Peru's most internationally respected figures, novelist Mario Vargas Llosa, in 1990, and renowned diplomat Javier Perez de Cuellar, in 1995.

Fujimori had boasted about his economic and security accomplishments. As it turns out, he may have been premature and hyperbolic. After all, the economy has cooled off, poverty remains acute and the country has just suffered a terrorist act of historic proportions.

However the drama turns out--and the longer it goes on, the greater the chances of a peaceful outcome--Fujimori is unlikely to emerge as a political winner, at least in the near term. A blow of such magnitude is apt to tarnish the image of his presidency, and country, in the eyes of both Peruvians and non-Peruvians alike. The rush of foreign investment, and tourism, may well slow down.

What the terrorist incident underscores is that Peru continues to face deep-seated problems that are not automatically solved by high growth rates, legitimate elections and advances in security. It also exposes a political structure that relies almost exclusively on Fujimori. Peru's parties are in shambles; its Congress is ineffectual.

One result is that Fujimori has eschewed, and thus has scant experience with, dialogue and negotiation, two faculties central to a peaceful resolution of the crisis. Rather than engaging in give and take, he has preferred to make decisions after carefully considering different proposals, then opting for the one that, to his mind, is most tactically advantageous. This was his approach in accepting the World Bank's and International Monetary Fund's formula for economic growth, as well as in security policy

It also partly explains the stayingpower of two figures in his government, intelligence advisor Vladimiro Montesinos and the head of the armed forces, Gen. Nicolas Hermoza. Though there has been speculation, from time to time, about their possible ousters, both have been credited with helping make the Fujimori government's security policy a success. But in light of the siege and the recent upturn in Shining Path actions, the status of both Montesinos and Hermoza, and Fujimori's strong alliance with the country's security forces, is an open question.

The irony of the taking of the ambassador's residence is that it was carried out by a substantially weakened group (an estimated 200-strong) that is often regarded as the "good guerrillas." It is possible that the guerrillas make up one of the Tupac Amaru's last remaining military units. Given the impressive execution of the takeover, it is plausible that the group had been planning the attack since its attempt, last year, to occupy the Peruvian Congress failed. In some sense, by winning the recognition it craves, which has been its hallmark since its founding in 1984, the group has already achieved one of its fundamental objectives.

It is hard to imagine how the Tupac Amaru could have scored a more stunning propaganda coup. The attack was soaked in symbolism--the Japanese have developed close ties with Peru during Fujimori's presidency, reflecting their greater willingness to invest in and trade with a country that, just a few years ago, was considered an economic basket case. The element of cultural affinity and identification should not be underestimated.

In economic terms, the Japan-Peru relationship was increasingly important. The Japanese were investing in construction and other sectors, and, less than four months ago, Prime Minister Ryutaro Hashimoto, on a visit to Lima, announced some $600 million in loans and aid. As a result, Japan became the symbol of the package of neo-liberal economic policies, associated with IMF and World Bank recipes, blamed for declining growth rates and continuing social and economic distress for most Peruvians. That the attack coincided with the celebration of Emperor Akihito's birthday, attended by an array of key diplomatic officials in Lima, only heightened its symbolic effect.

Symbolism aside, the siege has been a blow and an embarrassment for Fujimori. He has been caught by surprise. How he responds and deals with the most critical test of his presidency will determine whether Peru will be able to build on the gains made in the past few years. Thanks to Tupac Amaru, the world is watching.*

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