Editing Economy of Peru (section)

==== The Lost Decade ====
{{Main|Lost Decade (Peru)}}
In 1980, after twelve years of military rule, Fernando Belaúnde Terry was [[1980 Peruvian general election|elected president]] for a second time.<ref name="EL" /> On the day of the election, [[Shining Path]] launched its armed struggle in [[Chuschi]] with a [[Chuschi ballot burning incident|ballot burning incident]], essentially beginning the [[internal conflict in Peru]].<ref name="EL" /> Belaúnde's used a [[floating exchange rate]] and used [[populist]] policies, primarily relying on key exports.<ref name="EL" /> His government continued to reverse Velasco's existing policies and some economic liberalization.<ref name="EL" /> However, Belaúnde's government could not develop a monetary policy, failed at managing state-run entities and faced a growing external debt, leaving Peru in a vulnerable state.<ref name="EL" />

[[Alan García]] was elected president in the [[1985 Peruvian general election]] and the first Aprista president in over sixty years. His administration adopted a neo-structuralist economic policy, with the government funding the private sector to enhance economic performance, increasing welfare spending and instituting price controls; this resulted with temporary economic growth, though Peru's national debt grew dramatically.<ref name="EL" /> By 1989, inflation reached almost 3,000 percent and 7,000 percent in 1990, with Peru experiencing a GDP loss of twenty-four percent in the last three years of García's tenure.<ref name="EL" /> With the growing economic crisis and the terrorist Shining Path gaining territory in an armed conflict with the Peruvian government, the idea of a leader with a "heavy hand" became more attractive to Peruvians according to Gutiérrez Sanín and Schönwälder.<ref name="EL" />

The Peruvian armed forces grew frustrated with the inability of the García administration to handle the nation's crises and began to draft a plan to overthrow his government.<ref name="UA" /><ref name="Alfredo">{{cite book|author=Alfredo Schulte-Bockholt|title=The politics of organized crime and the organized crime of politics: a study in criminal power|publisher=Lexington Books|year=2006|isbn=978-0-7391-1358-5|pages=114–118|chapter=Chapter 5: Elites, Cocaine, and Power in Colombia and Peru|quote=important members of the officer corps, particularly within the army, had been contemplating a military coup and the establishment of an authoritarian regime, or a so-called directed democracy. The project was known as 'Plan Verde', the Green Plan. ... Fujimori essentially adopted the 'Plan Verde,' and the military became a partner in the regime. ... The autogolpe, or self-coup, of April 5, 1992, dissolved the Congress and the country's constitution and allowed for the implementation of the most important components of the 'Plan Verde.'}}</ref> According to Peruvian sociologist and political analyst Fernando Rospigliosi, Peru's business elites held relationships with the military planners, with Rospigliosi writing that businesses "probably provided the economic ideas which [the military] agreed with, the necessity of a liberal economic program as well as the installment of an authoritarian government which would impose order".<ref name="DI">{{Cite journal|last=Avilés|first=William|date=Spring 2009|title=Despite Insurgency: Reducing Military Prerogatives in Colombia and Peru|journal=[[Latin American Politics and Society]]|publisher=[[Cambridge University Press]]|volume=51|issue=1|pages=57–85|doi=10.1111/j.1548-2456.2009.00040.x|s2cid=154153310}}</ref> Thus, [[Plan Verde]] was drafted at the end of the García presidency; the objectives evolved into establishing a civilian-military government with a [[neoliberal]] economic policy.