Peru's Asian populist

Perched stiff-backed on a large gold and brocade chair in his palace, Alberto Fujimori rifled through the inside pocket of his suit and took out a crumpled piece of paper. On it were various scribbled aides-mímoires. Privatise that tourist hotel in the north. Think about the link between education and employment. Send the labour minister to open the new technical institute. Promote the cause of women.

The president of Peru writes policy on the back of an envelope, running the country with a telephone and a Toshiba laptop: a cut-price Ross Perot, too poor to campaign by tele-conference and satellite, but full of the same populist, independent instincts.

Fujimori is an odd fish. The son of Japanese immigrants, this former agronomist rose without trace to beat Peru's most famous novelist Mario Vargas Llosa to power in 1990. In 1995, he won a second term by a popular landslide, slaying another of the most illustrious sons of Peru's establishment: former UN secretary general Perez de Cuellar.



To cap all this, in August this year he persuaded Congress to vote through an "authentic interpretation" of the constitution which will allow him to seek an unprecedented third term to mark the millennium. With his popularity hovering around the 60 per cent mark, he is set to become one of Latin America's longest serving presidents.

Like Perot, he had no party, just the appeal of the outsider to a jaded electorate. But Fujimori succeeded where the other failed because he was stepping into a political vacuum and because he happened to find himself in Latin America.

The country-and the continent-where Fujimori found his political stage has been in crisis for decades. Economies have been wrenched back and forth violently on the pendulum of the state versus free market economic debate, societies buffeted helplessly as power passed from generals to democrats and back again: right, left, right.

In Peru, the left finally got its man into Lima's monumental presidential palace in 1985. What followed under the five years of Alan García's presidency was a quixotic flirtation with almost any economic ideology which seemed to fit the moment.

García alienated Peru's creditors with a campaign to limit debt payment to 10 per cent of export earnings and the IMF and the private banks duly ruled out Peru for any future credit. In July 1987, he suddenly nationalised the banks; by August he had quietly reopened dialogue with international lenders; in February 1988, he shut it down again; six months later, he mystifyingly resorted to IMF-style free market shock therapy.

As García careered around numerous policy S-bends, the economic crisis deepened and the Maoist guerrillas of the Sendero Luminoso (Shining Path) pursued their scorched earth approach to revolution with ever greater vengeance.

Populist and autocrat

It was against this background that Fujimori came to power in 1990. His two advantages were his independence from existing political groupings and his foreignness. Peru's colonial past is ever present. The majority of its people are of Indian and mixed Spanish and Indian descent but it had invariably elected its presidents from the tiny percentage of those who boast pure Spanish ancestry. Indians, who even now find it difficult to find a doctor to treat them, so engrained is post-colonial racism, feel more empathy for the "chino," as Fujimori is popularly called, than a Spaniard living in Miraflores or one of the other affluent districts of Lima.

For all his advantages as an outsider, Fujimori is playing the game the Latin American way. Like a Per?n, he is both autocrat and populist. Soon after he came to power in 1990, campaigning against Llosa's free market programme, he performed an extraordinary U-turn, introducing one of the toughest neo-liberal austerity programmes the continent has seen-and it has seen many.

Faced with protests and ever more brutal Sendero bombings, he disbanded Congress in 1992 and ruled by decree surrounded by shadowy technocrats and generals. In 1994 he made some effort to restore his democratic credentials by holding constituent assembly elections and a plebiscite on the constitution. He won by a narrow margin, but has more or less continued to rule by decree.

When he stood for re-election last year, his estranged wife Susana Higuchi stood against him, denouncing her husband as an autocrat in charge of a dictatorial and corrupt regime. Fujimori promptly passed a law forbidding any member of the president's family from standing against him, made his daughter first lady of Peru and put his wife under house arrest in the palace. Fujimori went on to win a thumping 64 per cent majority in the election, proving, as Perez de Cuellar ruefully commented, that "democracy is just not a theme that interests most Peruvians."

The people backed him for two reasons. First, Fujimori's free market reforms have brought inflation down from more than 7,000 per cent to around 10 per cent per annum, an incalculable economic bonus. Second, some enterprising police work tracked down and arrested Abimael Guzmín, leader of the Sendero Luminoso. After 15 years of escalating violence and economic destruction, peace finally came to Peru and Fujimori is still reaping the opinion poll benefits.

He is a master manipulator of public opinion; in this, too, he is attuned to the laws of political survival in the Latin American jungle. The transition from dictatorship to democracy-even the arm-twisting form pursued by Fujimori-has created what Brazil's president Fernando Henrique Cardoso calls mass, as opposed to classless, societies. These are characterised by huge numbers of floating voters who relate, not to political parties, but to the leader of the day, and are extraordinarily fickle.

Cardoso argues that it is difficult in this new Latin America to hold on to power even if a government performs well. "Being in government nowadays has become like being in a waiting room expecting the newcomer," he says. However long term the problems of the Peruvian economy and society, Fujimori has to keep one eye on his far-flung supporters in order to have a chance of staying in power long enough to change anything.

So it is that he leaves the gilded halls of his palace at least twice a week in his military helicopter, Toshiba on lap. He appears suddenly in an obscure village or shanty town, bestowing gifts of potatoes and farming tools, a rather alarming Santa Claus figure so different from his elitist predecessors.

A mixed economic policy

Fujimori is the very model of a modern Latin American leader, too, in opting for an economic policy made in Washington. Free market economics exported by the IMF and the World Bank has now been adopted by practically every Latin American government and Fujimori has been more enthusiastic than most. The strategy could not be more different from the protectionism of Alan Garc?-a. The domestic economy is now nothing more than what foreign investors and bankers want to make of it. In July he received the vindication of the markets when the Paris Club brought Peru back into the international fold with an agreement to restructure $9.5 billion of debt on extremely favourable terms

Despite his Latin American ways, Fujimori's ethnic roots do make him different. He has adopted the Anglo-Saxon economic model-fighting inflation, opening up markets, deregulating prices-but is also trying to graft on what he regards as the Asian model. Once he had won his second term last year, he embarked on a programme of public works in the shanty towns and isolated rural villages which were the breeding ground of the Sendero Luminoso.

This accent on social development, with a focus on education, owes much to Fujimori's sense of himself as an Asian. But it remains to be seen whether his social policies are designed to foster inclusive economic development or are simply a crisis strategy to keep the social peace in the face of the IMF austerity programmes.

With all its tensions-democracy yet autocracy, free market policies and interventionism, Asian and Anglo-Saxon style economics-Fujimori's Peru is a laboratory for new subtleties in the old Latin American debates. Nevertheless, despite economic success and an end to terrorism, Peru is still teetering on the edge of crisis.

Anarchy and poverty

It is a poor, unproductive, deeply fragmented country. Huge swathes of the population live on small farm holdings on the desert coastal plain, the northern Amazonian jungle and the barren high plains of the Andes. There are few social or trading links with other neighbouring villages, let alone the huge potential urban markets. Hundreds of thousands fled the countryside to escape the horrors of the Sendero Luminoso, swelling the squalid settlements now draped around every dusty hill near Lima. Here, there is virtually no formal employment with most families surviving as street sellers.

There is more than one kind of anarchy. Limans point out that the Sendero Luminoso killed fewer people in the capital city than the hundreds of privately run minibuses which speed down the streets looking for business. The fact that none of the drivers of these combis assassinas has ever been prosecuted is almost as appalling to Limans as the bombings and killings.

The trouble with Fujimori's vision of an Asian society is that he has to build it virtually from scratch in an inhospitable environment. Asia has strong family ties, a relatively horizontal distribution of income compared with any country in Latin America, a culture of discipline and enterprise, and (in most countries) a high level of trust.

There is little trust in Peruvian society which was torn apart by colonialism long before the recent decades of economic experimentation and political adventurism. Very poor people do not work well in communities. Womankind, a London-based women's development group, funded a project on the north shore of Lake Titicaca, where, in several villages, a woman was given a duck and drake. The idea was that she would sell the eggs but pass on the ducklings to her neighbours. But, as soon as the chicks were hatched, they were sold along with the eggs and the woman handed the money straight to her husband.

In Fujimori's first five years of trying to build a rudimentary base for economic development, he has relied on the brutality of the market to unleash entrepreneurial energy and has succeeded in creating a new spirit: wherever you go in Peru, people talk about setting up their own businesses, getting credit for tools and machinery to make clothes and shoes, exporting to the west. Peasant women in the southern district of Puno dream of opening a shop for their knitted sweaters in London and are disbelieving when told that western markets are already saturated with colourful third world products.

But there is no system to give shape to this entrepreneurial spirit. There is virtually no transport infrastructure and no formal jobs to provide the wherewithal for expansion. Peru is struggling with malnutrition on a grand scale-protein intake fell by 30 per cent in the four months after Fujimori's free market reforms were introduced. It is not working out how to improve supply chains.

The president argues that all he can give the people are symbols to inspire them. He is building schools, health centres and roads. No matter that there are few teachers or doctors. Until the country is richer, if and when foreign investment starts to create employment, it is up to the people.

A race against time?

The self-confessed autocrat, when asked whether he likes power, replies: "Only to save time." This statement seems absurd to anyone from an old democracy but makes sense to a Singaporean. Discipline imposed from a strong centre has much to recommend it in the early stages of a country's development.

But Fujimori's brand of centralised power is unstable. A positive view of his helicopter diplomacy and symbol-making is that this is the only affordable way to create a sense of nation from the fragments of a society. His critics charge that he is simply fighting for his political skin.

He has refused to build a power base around him and admits that he has no idea who might succeed him. A technocrat to his marrow, he does not trust politicians and has made no attempt to build a genuine democracy which can survive his departure (if he ever intends to go). He continues to be intent on undermining every alternative power base: political parties, congress, the judiciary and even the church. Local groups such as mothers' clubs are encouraged because they are easily controlled and dependent on the largesse of the president's social budget. More independent-minded women's groups are blocked from registering.

By destroying all potential opposition, he also threatens the embryonic sinews of civil society. Development groups say that painstaking work on the ground to encourage self-reliance and sustainable economic progress is destroyed overnight when the president arrives with gifts of food or farming tools. The people are being encouraged to ride the waves of the market but the president's need to remain popular then makes dependants of them.

These are crisis strategies for a fickle continent. Fujimori knows Peru needs decades of stability and sound policies to progress. His instincts tell him that he will not get them: he is, after all, only a partial dictator and subject to electoral whim every five years. Absolute power would be one route, but taking it would risk the displeasure of the IMF and foreign investors. The only practical path, which Fujimori appears to be taking, is to make Peru attractive to international capital and hope that the trickle down benefits will soon fill the schools with teachers.