Editing Economy of Peru (section)

====Revolutionary Government of the Armed Forces====

Velasco established the Revolutionary Government of the Armed Forces and it adopted a [[state capitalism]] economic policy amid a period of [[economic expansion]].<ref name="EL">{{Cite book|last1=Gutiérrez Sanín|first1=Francisco|title=Economic Liberalization and Political Violence: Utopia Or Dystopia?|last2=Schönwälder|first2=Gerd|publisher=[[International Development Research Centre]]|year=2010|isbn=978-0745330631|pages=256–284}}</ref> The government immediately instituted [[land reform]] initiatives, establishing one of the most ambitious [[land tenure]] projects in the history of Latin America.<ref name="EL" /> The land reform projects removed the traditional ''[[hacienda]]'' system that resembled landowners imposing a [[serfdom]] on peasants and replaced it with [[agricultural cooperative]]s called Agricultural Social-Interest Societies (SAIS).<ref name="EL" /> The Velasco government took a structural approach; it invested in infrastructure and began a widespread [[Nationalize|nationalization]] campaign of key economic production sectors, education and the media.<ref name="CH" /><ref name="EL" /> A [[fixed exchange rate system]] was adopted and the national debt began to increase dramatically.<ref name="EL" /> A combination of debt, inflation and the [[1973 oil crisis]] induced an economic crisis in the Velasco government, with General [[Francisco Morales-Bermúdez]] overthrowing Velasco in the [[Tacnazo]].<ref name="CH" /><ref name="EL" />

Bermúdez in name led the Second Revolutionary Government of the Armed Forces, with his government introducing [[austerity measures]] and removing state capitalist systems.<ref name="CH" /><ref name="EL" /> This government began monetary adjustment and started with negotiations on foreign debt.<ref name="EL" /> However, corruption scandals and widespread protests broke out and the military government agreed to transition Peru back into a democratic political system.<ref name="EL" />