Popular resistance to neoliberal "reform" was the underlying cause of Peru's July general strike. On July 5, public schoolteachers walked off the job over government plans to privatise education. Within days, discontented workers from other industries joined the embattled teachers. Before long, schools, mines, factories and construction sites were shut down as tens of thousands of striking protesters took to the streets of every major city demanding higher pay, improved conditions and revisions to the US-Peru free-trade agreement. Peasant farmers joined the mass mobilisation, closing roads and paralysing transport networks.
The response of state security forces was predictably brutal. Hundreds of protesters were tear-gassed, shot with rubber bullets and beaten senseless. At least three people lost their lives in the violence, though the real death toll is likely to be much higher. More than 20,000 citizens were "disappeared" during the Peruvian military's counterinsurgency campaign of the 1990s, and in light of this it is disturbing to note that the whereabouts of many trade unionists arrested in July is still unknown.
This upsurge of dissent coincided with the first anniversary of President Alan Garcia's electoral victory. Having staged one of Latin America's most remarkable political comebacks last year, Garcia is a born-again neoliberal who has promised to push ahead with the free-trade deal negotiated by the outgoing Toledo administration in late 2005.
Never one to be shackled by principle, Garcia has now completely eschewed the hypocritical veneer of centre-left populism that characterised his first presidency during the hyperinflationary and recession-plagued 1980s.
Since 1991, when President Alberto Fujimori embarked on a radical program of liberalisation, the disenfranchised majority of Peru have endured perpetual disappointment as the glib promises of supply-side economics fail to deliver a more equitable and prosperous society.
The distribution of national wealth is still so inequitable that only 5% of the population share in the prosperity generated by Peru's booming export sector. When Harvard-trained economist Alejandro Toledo became president in 2001, he stepped up the pace of neoliberal reform. Unrestricted foreign investment flowed in, and the profits flowed out into the coffers of transnational corporations, leaving the general population more impoverished and insecure than ever. In that respect, little has changed since the early colonial period, when a handful of Spaniards assumed absolute control over Peru's abundant natural resources.
Washington — the present-day centre of colonial power in the Western Hemisphere — has played a key role in ensuring that the neoliberal development model remains dominant in Peru and other Andean nations. With Venezuela and Bolivia inviting the rest of Latin America to follow their path of resistance, the Bush administration has aggressively pursued a series of separate, bilateral trade agreements with Ecuador, Colombia and Peru. By concluding such agreements, the Washington foreign policy elite hopes to contain the spread of national liberation movements.
During Peru's 2006 election period, ex-Colonel Ollanta Humala, the left-leaning candidate endorsed by Venezuelan leader Hugo Chavez, was the victim of a smear campaign orchestrated and financed by the US Agency for International Development and the National Endowment for Democracy, both funded by the US government. The intensive propaganda effort against Humala was led by a series of shadowy "human rights" groups directly funded by USAID and the NED.
Relentlessly portrayed as an irresponsible demagogue, a mass-murderer and a tyrant in the making, Humala's previously unbeatable lead in the polls was greatly reduced. The beneficiary of this reversal was Garcia, who has learned that presidential candidates in Peru must conform to the "Washington consensus". Although the Bush administration and Peru's ruling elite would have preferred to see right-wing candidate Lourdes Flores in office, Garcia's eventual victory was tolerated as the lesser of two evils.
Since returning to power, Garcia has prostrated himself before the altar of neoliberalism by seeking to finalise the implementation of the free-trade agreement. Once locked into the bilateral free-trade deal, Peru will have effectively abandoned its right to collectively bargain with the US as a member of the Andean Community of Nations. The agricultural sector, which directly employs more than a quarter of the population, will be devastated as US agribusiness dumps subsidised products on the Peruvian market. Affordable medicines will become unavailable as US drug companies ruthlessly enforce "intellectual property rights", leading to devastating consequences for public health. Indigenous people will be thrown off their land in ever increasing numbers as US mining companies gain "equal access" rights to Peru's resources.
As the development agency Oxfam has explicitly warned, Peru faces social catastrophe if the proposed free-trade deal with the US goes ahead. Beholden to Washington, Garcia is bent on trading away the last vestiges of Peru's sovereignty for the sake of his political survival. After more than 15 years of neoliberal measures, over half of Peru's 27 million inhabitants still live in poverty. Millions more live in perpetual danger of sliding into poverty. An exploitative free-trade deal with the US is not the answer to this problem, which can only be addressed through sustainable development, fair trade rather than so-called "free trade" and greater regional integration. Last month, a broad-based coalition of Peruvian workers risked arrest, torture and extra-judicial execution to get that message across.