By Pedro G. Cavallero (for Safe Democracy)

Pedro Cavallero analyzes the recent return of Alan García to the Presidency of Peru and explains why, after 16 years, the Peruvians have decided to grant him a second term in the Palacio de Gobierno. García‘s previous five-year term left the country in an economic crisis, with poverty at an all time high, inflation rates through the roof, intensified social instability, and a complete lack of faith in the Aprista government. Nowadays, an apparently wiser García has made the people of Peru believe that this time he will pursue a more balanced approach to government. In Cavallero‘s opinion, hope that a new era is dawning in Peru may have reason to exist, if Garcia can use moderation in his decisions, and make good use of his second shot at the Presidency.

Pedro German Cavallero is a policy analyst based in Washington DC. He holds a master degree in Comparative Law and comments regularly on U.S. foreign policy and inter-American affairs.

AS JULY 1990 CAME TO A CLOSE, an extremely exhausted Alan García began to clear his desk at the Palacio de Gobierno, the official residence of the President of Peru in Lima. Outside the wrought iron fence that surrounds the building just across from the Plaza de Armas, a country in shambles hopefully anticipated the arrival of Garcia’s successor.

García’s five-year term –1985 to 1990– left Peru with a set of daunting challenges. But the then politically inexperienced President-elect Alberto Fujimori did not seem deterred by the mess that Garcia had left behind. In Garcia’s final year of office, inflation rates exceeded 7,000 percent, poverty jumped to 55 percent –from an already high 41 percent in 1985–, per capita annual income dropped exponentially –below the level of 1960– and the country’s GDP shrank by one-fifth.

The economic turbulence at the time exacerbated social unrest. Sendero Luminoso, the Maoist guerrilla group, incubated in the remote Peruvian highlands, unleashed a brutal assault on society, threatening a still fragile, emerging democracy. The García administration’s response to the guerrilla threat was to use pure military force, which only succeeded in violating human rights, and thus exacerbating the situation even more.

As arrangements were made in Lima for the transfer of power, only 5 percent of those polled approved of the Aprista government, a traditional left-wing social democratic force founded by Raúl Haya de la Torre in the 1920s. And as the Aprismo stepped down from office, a trio of extremely difficult problems clouded Peru’s future: rampant inflation, international isolation, and terrorism.

Sixteen years down the road, a more conciliatory –and even apologetic– Alan García succeeded in blanketing the memory of his failure, to capture the presidency for a second time. It takes a gifted politician to win a second term, with the heavy baggage of his first five years; but Alan Garcia has just that kind of gift. His extraordinary win was discussed by The Economist in its recent coverage of the Peruvian elections: Peru’s New President: Second Time Sober?

Alan García’s progressive decision to embrace moderation seems to have been encouraged by confronting runner-up Ollanta Humala: a nationalist former military officer imbued with a strong, anti-establishment spirit. As a result, the strident populism that swept him to power in 1985 –at 36 years old, making him Peru’s youngest president– has vanished completely.

Instead, a seemingly wiser García has sent clear signals to the region that his administration will play an important role both domestically and in the international arena. Repeatedly, he has expressed his admiration for President Lula of Brazil, and is planning on going to Brazil for his first planned state visit. By signaling President Lula as a possible role model, García seems to want to convey to the people of Peru that, this time around, he will pursue a more balanced set of policies, avoiding the combativeness, which characterized his previous leadership.

Simultaneously, García has signaled a willingness to develop closer relations with Chile, which could soon become a key-trading partner if they agree to sign a free trade agreement with Peru. With regards to the United States, the new Peruvian administration expects the US Congress to ratify the free trade agreement that was negotiated during Alejandro Toledo’s mandate. Despite the reservations of the APRA leaders, Garcia sees the agreement as essential to Peru’s well-being. The US currently provides a market for almost a quarter of Peruvian exports, which Garcia is intent on preserving.

Wary of Hugo Chávez’s unprecedented regional influence, the Peruvian President has tried to play down the ensuing confrontation with Caracas over Venezuela’s interference in Peru’s internal affairs. Similarly, the decision to receive Argentine Foreign Minister Jorge Taiana –President Nestor Kirchner’s envoy, closely aligned with opposition candidate Humala– constitutes another gesture of Lima’s willingness and openness to improve intra-regional relations.

So far, Alan Garcia’s decisions have elicited great moderation, giving the people of Peru a reason to hope. Rather than a reenactment of past mistakes, a new era may be dawning in the Andes.

Safe Democracy would like to invite you to subscribe to the weekly electronic newsletter, with analysis and commentaries from our international experts (click here).