Shoot-From-Hip Leader : PERU: Is He Style or Substance?

LIMA, Peru —  When the mood strikes him, Peru’s 36-year-old, shoot-from-the-hip president wanders out onto the balcony of the palace and harangues passers-by in the street below. Mostly, he talks to them about nationalism and morality. People cheer: “Alan! Alan!”

Peru seems to be delighted with Alan Garcia, who is the most provocative new political star in Latin America since Cuba’s Fidel Castro.

Never has a Peruvian president gored so many sacred cows in so short a period. Never has a president been more popular with the people of this country, which is afflicted with economic decay and social malaise.

Domestically, Garcia has assailed the police, the army, the bureaucracy and business. His executive style discomfits the Peruvian Congress. His righteousness alarms the drug smugglers, who control the most dynamic sector of Peru’s economy.

Internationally, he has challenged the United States, the International Monetary Fund, foreign bankers, foreign oil companies and French arms makers. And he has challenged Castro, that graying proprietor of yesterday’s revolution, who urges others to renege on their foreign debts but pays his own.

Peruvians like Garcia’s style. They delight in seeing him, on his balcony or on television, striding through the quake-shattered streets of Mexico City or lecturing the U.N. General Assembly on the need for Third World unity. “Debt or democracy,” he thundered in his recent U.N. speech, and he urged other debtor nations to follow Peru’s lead in limiting payments on foreign debt to 10% of export earnings.

The goal of his 18-hour-a-day rampage through the musty bureaucracy and somnolent countryside is clear, he says. He will heal the sick man that is Peru through democratic reform.

His style is as brash as it is demagogic. He fires first, checks facts later. He says reasonable things shouting. Garcia’s rhetoric is so free-flowing, so free-wheeling that he sounds more like a campaigning candidate than a president, even one who has been in office for only two months.

And if what he says is sometimes marred by contradiction, it is so far of little note to Peruvians captivated by their new president. If Garcia sometimes seems to charge pell-mell in opposite directions, well, chalk it up to inexperience. That, they say, is better than standing still or sliding backward.

Campaigning as a social democrat, Garcia won the presidency last April with 50% of the vote. He was the first winning candidate in the 60-year history of the nationalist, populist, anti-imperialist APRA party--the name being the acronym for American Popular Revolutionary Alliance.

He was inaugurated in late July and, as he completed his second month in office, two independent opinion polls gave him a popularity rating of more than 95%. The figure embarrassed the government, for erosion is inevitable. Garcia has aroused too many expectations to fulfill them all.

Still, Garcia’s honeymoon has opened new perspectives and awakened fresh enthusiasm in a country accustomed to government impotence in the face of problems that apparently defy solution. Living standards have fallen to the levels of a generation ago. Lima, the graceful “City of Kings,” has become a gray, dirty, overpopulated city overrun by the poor.

The keystone of Garcia’s early popularity among Peru’s have-not majority has been a rice-and-beans economic policy. In an assault on inflation, which was running at 11% a month when he took office, Garcia decreed pay raises for the lowest paid. Then he froze not only wages but the price of basic goods as well.

Inflation has been reduced to 3% or 4% a month, but the freeze is not popular with the private sector. With no incentive for factory owners to pay the increasing cost of imported goods--or the electric rates that have been raised dramatically--industrial production has slumped. As in Argentina, where a similar anti-inflation freeze has worked well, it is not clear how Garcia can end it without triggering a new round of price increases.

No Overall Plan

Further, although he has promised new incentives for agriculture and decentralization of Peru’s obstructionist public administration, Garcia has yet to unveil an overall program that will generate the real economic growth that is so desperately needed. Growth is expected to be around 2% this year, not enough to keep pace with the expanding population.

Other steps taken by Garcia also face potential pitfalls. His position of limiting payments on Peru’s $14-billion foreign debt to 10% of export earnings--$330 million this year--is less radical than Garcia has made it sound in demanding a new deal for debtor nations and refusing to deal with the International Monetary Fund. The lame-duck government of President Fernando Belaunde Terry, whom Garcia replaced on July 28, had quietly paid less--only about 8.5%--during the first six months of this year.

Garcia carried his feud with Peru’s international creditors a step further in his U.N. speech by himself declaring that Peru’s loans were “value-impaired.” Such a designation, to be weighed at an intergovernmental meeting in Washington next week, would force U.S. banks to post reserves against outstanding loans, thereby diminishing their profits and in the process impairing Peru’s access to international financing.

In August, the young president impetuously decided, against the advice of his closest aides, to rescind the contracts of foreign oil companies working in Peru. He personally drew up the decree, which emerged in a form so flawed that it had to be rewritten. This sort of thing cannot be expected to win Garcia any friends in the private sector, here or abroad.

One of Garcia’s persistent themes is a call for reducing weapons in Latin America. He has cut the Peruvian armed forces’ share of the national budget from about one-third to around one-fifth. At his inauguration, he announced to great applause that Peru would cut back its scheduled purchase of 26 French Mirage 2000 jet interceptors.

It turned out, though, that nobody had talked to the Marcel Dassault company, which is building the planes, and Garcia learned only after he spoke how expensive it would be to cancel part of the $700-million contract. Now, well-placed sources say, Garcia is looking for a way to fulfill the contract but to sell 13 of the planes to an Arab country in the Middle East--to the consternation of Israel.

‘Moralizing Peru’

Garcia also introduced a measure of contradiction into his pledge to fight the drug smugglers who have made coca paste, the base for cocaine, Peru’s principal export. His commitment is fueled by his dream of “moralizing Peru” at a time when Peruvian institutions are being corrupted by the smugglers’ easy money. About 150 high-ranking police officers have been dismissed, although none has been publicly accused of wrongdoing, in the wake of a cocaine scandal in Lima.

Garcia’s commitment--and early success in raids on big jungle laboratories where coca paste is refined--brought a telegram of warm congratulations from President Reagan. But in his Sept. 24 appearance at the United Nations, Garcia said that Peru would wage war on drugs not because the United States wants such a war, or because the United States is financing it, but because it is the right thing to do. In fact, he said, Peru will not accept U.S. aid for the anti-drug campaign.

The consternation this aroused among U.S. officials seeking to keep the momentum going, and among Peruvian police officials seeking badly needed money and material, is still alive. Aides to Garcia say the remark was “a gesture.” What he really meant, they say, is that Peru will fight drugs with or without U.S. help. If the United States wants to help in the fight against drugs, they say, then it ought also to help in the fight against poverty, with more developmental assistance.

For all his energy, Garcia has yet to make any progress against the Maoist guerrillas of the Sendero Luminoso (Shining Path), whose Andes-based insurgency has claimed more than 6,000 lives since 1980. Garcia vows absolute respect for human rights, yet atrocities continue against peasants squeezed between the guerrillas and the Peruvian security forces pursuing them.

After an army patrol killed as many as 60 men, women and children in one hamlet, Garcia dismissed the head of the armed forces joint command and the commander of the zone where the killings took place. The loss of key senior officers, one of them Peru’s only proven combat general, for the crime of a junior lieutenant, has not endeared Garcia to the armed forces, which were already smarting over budget cuts.

Although the Andean insurgency is a major dilemma for Peru, and Garcia addressed it often in his campaign, he brought no new policies to office with him. Belaunde, too, had promised to end the rebellion while respecting human rights. Neither happened. Last month, Garcia somewhat belatedly appointed a high-level civilian peace commission charged with recommending effective pacification policies.

New policies. New men. New directions. A new leader. New dreams.

In the mountains where guerrillas attack, in the violent jungle where coca is king, even in the coastal slums where hunger reigns, hope flickers where there was none. What comes now? A better life, or cruel disillusionment? Peru waits--and cries out, “Alan! Alan!”