Like many other military establishments on the continent, the Peruvian military halted the civilian political process for a prolonged period of time (1968-80), attempted major structural economic change without a great deal of success, accumulated a large debt without public accountability, and then turned the political system back over to the same politicians it had previously ousted. The transition to democratic government, meanwhile, raised popular expectations that a fragile new democracy with severely constrained resources could hardly hope to meet.

The 1980 elections were won, ironically, by Fernando Belaúnde, whom the military had overthrown in 1968. His victory was no surprise, given that the elections were contested by a leaderless and divided APRA, recovering from the recent death of Haya de la Torre, and by a fragmented left that presented what political scientist Sandra Woy Hazelton described as a "cacophony" of candidates and parties. Although Belaúnde was a charismatic personality, he had spent the military years in exile, and was hopelessly out of touch with Peru's political realities in 1980. His government stuck stubbornly to a neoliberal, export-oriented economic model at a time when the world recession caused the prices of Peru's major export products to plummet. At the same time, the government fueled inflation through fiscal expenditures on major infrastructure projects, ignoring the better judgment of the president of the Central Reserve Bank (Banco Central de Reservas--BCR, also known as Central Bank)) (see The Search for New Directions, 1975-90 , ch.3). Popular expectations raised by the transition to democracy were soon frustrated.

Despite the SL's launching of activities in 1980 and its substantial presence in Ayacucho by 1982, Belaúnde refused to take the group seriously, dismissing them as narcoterrorists. When the government finally realized that the SL was a substantial security threat as a guerrilla and terrorist group, its reaction was too little, too late, and ultimately counterproductive. The government sent special counterinsurgency forces, the Sinchis, to the Ayacucho region, where they were given a free hand. The repressive nature of the military activities and the military's lack of understanding of the SL resulted in unwarranted repression against the local population. This, if anything, played into the SL's hands.

Natural disasters--floods and droughts--and economic decline and triple-digit inflation heightened the negative image of a government that was distant and detached from the population. This image was also exacerbated by Belaúnde's continuous insistence, amid economic crisis and the onset of guerrilla violence, that the solution to Peru's problems was the building of the Jungle Border Highway (la carretera marginal de la selva or la marginal), linking the Amazon region of the country to the coast. The severity of the economic crisis of the Belaúnde years and his government's poor public relations image opened the door for a major shift of th1df the political spectrum to the left. By late 1983, García, as leader of the opposition in Congress, began to tap the increasing support for a radical solution to Peru's problems.

Data as of September 1992