Dealing from Strength

First came a phalanx of women and children, and behind them the short, silent, barrel-chested men armed with slingshots, rusty rifles, and carrying Tierra o Muerte banners. Once again Peru's restless peasants were trying to chase landowners off their estates. The invasions have been going on for months, and President Fernando Belaunde Terry has hesitated to intervene. But last week, when 8,000 peasants appeared at 14 haciendas near Cuzco in the southern highlands, troops drove them back in a pitched battle that left 17 dead, 32 wounded on both sides. Within hours, Belaunde declared martial law in the area--and then pressed ahead with a reform program to give Peru's Indians by law what he cannot permit them to take by force.

Peru's President was not acting from weakness but from new-found strength. For the first time since he took office six months ago, Belaunde felt secure enough to deal swiftly and firmly with an explosive situation. Having won the presidency with only 40% of the popular vote, he has depended on the shaky support of the two major opposition parties in Congress. But in December municipal elections, his Accion Popular party won a clear majority throughout the country. And now with national sentiment on Belaunde's side, the opposition has more reason to cooperate. As a leader of APRA, Peru's most powerful opposition party, puts it: "We are the loyal opposition--or better, our position is one of critical cooperation."

With any luck, Belaunde should do well. Peru has one of Latin America's most solid currencies (26.60 soles to the dollar) and a rapidly expanding industry (copper, manufacturing, fishing). The problem is to spread some of the soles around. In the highlands, 6,000,000 Indians still speak the language of their Inca ancestors, earn a bare $15 per family per year; city slum dwellers do little better. But Belaunde's government has already built 2,200 low-cost housing units in Lima. He has pushed through a new universal-education law that will take a long time to implement, but at least theoretically extends free schooling to all Peruvians from kindergarten on up through university level. And he is embarking on a campaign to relieve land pressure in the high Andes by opening up the fertile jungles on the eastern slopes. Jungle pioneers will get complete tax exemption.

Last week Peru's Congress was debating a $579 million budget for the coming year, biggest in Peru's history, and Belaunde is discussing loans with West Germany, Great Britain, Japan, even Finland. The country's Alianza aid, Peruvians feel, has been snagged because of the disputed International Petroleum Co. concession (TIME, Nov. 8). But Belaunde talks hopefully of agreement, and U.S. businessmen think he means it.

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