In an upset in the 1990 presidential election, Alberto Fujimori, an agricultural economist of Japanese descent, defeated novelist Mario Vargas Llosa. Fujimori, who ran in the runoff with left-wing support, imposed an austerity program to deal with hyperinflation and to restore Peru’s ability to borrow money internationally. Economic hardship led to an escalation of violence by the Shining Path. In April 1992 Fujimori, alleging that congress and the judiciary had blocked his efforts to suppress the drug trade and the guerrillas, suspended parts of the constitution and took full control of the government. In September several key Shining Path guerrillas were captured, including Shining Path leader Abimael Guzmán, and in November Fujimori’s supporters won a solid majority in a legislative election.
In 1993 the United States and other creditor nations resumed loans to Peru. In October 1993 Peruvians voted to accept a new constitution, signed by Fujimori in December, that increased presidential power, changed the legislature from a bicameral body to a unicameral one, and allowed Fujimori to run for a second term.
By 1994 Peru’s economy had revived dramatically. Fujimori’s effort to privatize the economy moved forward with the sale of Interbanc, the largest national bank, and the national telephone service to private interests. The country also rejoined the Andean Community just as that group began negotiations to reduce tariffs among member nations.
At the same time, the Fujimori government upheld its promise to crush the Shining Path movement, capturing several high-ranking members of the organization’s central committee.
In June 1994 former UN Secretary General Javier Pérez de Cuéllar announced that he would run for the presidency. As presidential elections neared, Fujimori lost momentum after feuding publicly with his wife, Susana Higuchi, a critic of his policies, and relieving her of her duties as first lady. In response she formed an opposition party and announced her intention to run for office in 1995. She was denied candidacy when her party failed to assemble the necessary number of signatures. In January 1995 a series of skirmishes erupted along a contested section of the Ecuadorian border. Fujimori capitalized politically on the situation, gaining wide approval for his refusal to compromise with Ecuador. A cease-fire accord was signed in Montevideo, Uruguay, in March 1995. Peru and Ecuador entered into negotiations in 1998 and, toward the end of the year, signed a treaty settling the border dispute. "Peru" © Emmanuel BUCHOT, Encarta, Wikipedia
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