Correspondents' Correspondence Crisis in Peru
ABRAMS, ARNOLD & KLITGAARD, ROBERT E.
Correspondents' Correspondence BRIEF TAKEOUTS OF MORE THAN PERSONAL INTEREST FROM LETTERS AND OTHER COMMUNICATIONS RECEIVED BY THE EDITORS. Crisis in Peru Lima-Peruvian President Juan Velasco...
...During the past year, however, the fishmeal industry-which provides the most important export-suffered a disastrous drop due to the disappearance of anchovy shoals, and world copper prices fell...
...Meanwhile, the foreign aid and investment so heavily counted on in the government's national development plan have not been forthcoming...
...companies, and its promises of a vastly enlarged state role in the economy...
...For the government, social property (and its consequence of less investment in the private sector) implies an unprecedented degree of overt involvement in the economy...
...Its policymakers maintain a fluid stance, stressing "pragmatism," "pluralism," and an "experimental attitude...
...If this has economic disadvantages, it also has bureaucratic benefits: The government will grow in power...
...In the 1971-75 national plan, "popular participation" was listed as the primary objective...
...Treasury Department has now begun to encourage private loans under a group headed by the Chase Manhattan Bank...
...He insists, however, that he is not to blame, that a Ngak Pa's influence-dependent upon his intelligence, experience and the "merit" he has amassed-Is limited...
...The loss of confidence in the government comes in a crucial period, when Peru has to contend with an unexpectedly faltering economy and resolve fundamental conflicts over the implementation of its worker-management program...
...reportedly, his desire to become a permanent replacement was blocked by fellow generals...
...He left Tibet in 1959, when open revolt broke out against the Chinese takeover...
...Foreign capital dried up after the bloodless coup that brought the junta into power in November 1968, largely because of the military's ambitious redistribution of farmland, its seizure of several U.S...
...Nonetheless, most foreign investors remain wary, not of expropriation anymore, but of the next step in the Peruvian revolution: worker management...
...Precisely what the concept means, apart from a general notion of worker control over their enterprises, is the subject of much political debate in Peru today...
...Responsibility lies with the people," Dorji explains, "and if they do not believe in the Spell Maker's abilities, or if they have been behaving badly and angering the gods, little can be done for them...
...That is hard to say," Dorji replies with a grin...
...The best thing is to move into another area where nobody knows you and start again...
...Social property is Peru's label for what is eventually to become the dominant sector of a mixed private and public property economy...
...Initially, the adoption of worker management will probably bring further hardships to those who will benefit from it in the long run...
...While Velasco was recuperating, Premier Edgardo Mercado Jarrin signed bills and performed other necessary executive functions...
...well down the list, in 13th place, was "industrial reform...
...The generals had hoped that, by providing political stability and clear-cut "rules of the game" for financiers, money would once again begin flowing into the country...
...Some of the government's top civilians have been moved to cofide, Peru's investment bank for the private sector and the potential financier of social property...
...In what industries, how fast, and according to which models will social property be adopted...
...All this, combined with rising prices and widespread unemployment, has contributed to the growing domestic discontent...
...His activities include ritualistic chanting, reading from ancient scriptures, burning incense, shredding leaves, and sprinkling salt...
...Perhaps, though the problem is not confined to Dharamsala...
...The primary function of a Ngak Pa (pronounced knock-pa) is to preserve harmony between man and nature, but things here have been unbalanced of late...
...It is a loss of face, and people usually assume that you have not accumulated enough merit...
...But none of this has worked during the past year...
...The Ngak Pa concedes that his constituency, comprised of Indians and several thousand Tibetan refugees like himself, is growing restive under the difficult conditions...
...President Velasco has called it "the key to the revolutionary process...
...In return, the community provides him with food, shelter and other essentials...
...Furthermore, an entire series of industrial laws is being drafted for release in a few months...
...For the people, on the other hand, there may be little short-term compensation...
...But the governmental crisis caused by his illness continues amid widespread uncertainty about his present authority...
...Dorji is waiting...
...To learn the secrets of spell making, Dorji, 48, entered a monastery at the age of 10 and studied there until he was 20...
...Dorji is generally hired by a community on what amounts to a two or three-year contract (beginners and lesser lights work on a seasonal basis...
...Nonetheless, when a Ngak Pa cannot right the imbalances caused by his constituents, he invariably must shoulder the blame...
...If the drought fingers, he and many another Ngak Pa may have to go off in search of more merit and a new job.-arnold Abrams...
...For example, the regime turned down a badly needed $100-150 million investment offer from the Ford Motor Company because Ford conditioned the offer on exemption from worker management...
...The same drought has afflicted large portions of India, producing famine in the worst areas and triggering food shortages throughout the country (see David A. Weisbrod, "India Searches for Food," NL, June 25...
...The community has been plagued by drought, and a few skeptics are saying a new Ngak Pa is needed...
...Will the workers be owners, or will ownership be vested in the society as a whole...
...And this will make the next phase of the Peruvian revolution the most difficult of all.-Robert E. Klitgaard A Dealer in Spells Dharamsala, India-It has been a bad year for Khamtul Yeshey Dorji, the Ngak Pa (Spell Maker) of this village some 250 miles northwest of New Delhi...
...Now, with the President's capacity to rule still in doubt, public fears have been aroused-especially among the Left-that an old-fashioned power struggle may occur and that the military junta's celebrated "noncapitalist, non-Communist" revolution could be weakened...
...Thus social property will have opponents not only among entrepreneurs with threatened interests, but among workers and consumers affected by increased joblessness and inflation...
...A thickset, bespectacled man whose long hair and bright beads flow onto his Buddhist monk's robes, he believes that spiritual power, not government intervention, ultimately must determine such matters...
...In an effort to improve distribution and stabilize spiraling prices, the government recently nationalized the wholesale grain trade...
...Crisis in Peru Lima-Peruvian President Juan Velasco Alvarado, who underwent multiple surgery, including a leg amputation, after suffering an abdominal rupture in late February, recently returned to office...
...Since the Peruvian model for nonaligned, nationalistic social change is being watched closely throughout the Third World, what happens next could be of importance far beyond the borders of this small Andean nation...
...In its search for answers to these questions, the junta is carefully studying the Chilean and Yugoslavian examples...
...Despite a record sugar crop, floods and accelerated agrarian reform ended the previous expansion of agricultural productivity, and basic foodstuffs were periodically unavailable...
...His services consist of influencing weather, warding off disease and assisting people through "danger" periods of their lives...
...In addition, a World Bank team made a recent visit to study financing possibilities and indicated to local authorities that the green light is again on, and foreign petroleum companies are showing great interest in Peru's newly discovered oil fields...
...But reliable sources here claim the U.S...
...Then the process-and the problems?will begin in earnest...
...The new regime has not been repressive domestically, though, and its policies seem to be guided more by hard-headed pragmatism than by ideology...
...The long-term economic outlook is promising: Peru is the world's leading fishing nation, one of the top five copper producers, and the possessor of rich oil fields in the Amazon jungle...
...Some observers speculate that the generals are not really serious about imposing social property in the near future, but recent events indicate that they do mean business...
...Yet this move may create so much unemployment and discontent among farmers that India will have to turn to other remedies...
...Among the Ngak Pa's accouter-ments are silver bells, prayer beads, ornamental robing, and a highly polished horn fashioned from human thighbone...
...The Nixon Administration, during its first term, consistently blocked bilateral and multilateral loans to Peru...
...After leaving, he served a five-year apprenticeship as an assistant Ngak Pa, then opened his own practice...
...In the 1973-74 biennial plan, "social property"-now seen as the most important form of industrial reform?is given top priority...
...Peru became virulently anti-American, too, and was among the first nations in Latin America to establish diplomatic relations with Cuba and China...
...How does an unsuccessful Ngak Pa acquire more merit...
...What will be the market structure of an industry that simultaneously encompasses privately, "socially," and publicly owned firms...
Vol. 56 • July 1973 • No. 14
