Revolution Within the Law

When Peru's President Fernando Belaunde Terry began his six-year term last year, the rumbles were as loud as an Andean avalanche. Backed by the army, Belaunde scraped into power with a bare 39% of the vote, and ranged against him were two men capable of destroying his fragile government--old-time APRA Party Chieftain Victor Raul Haya de la Torre, 69, and ex-Dictator Manuel Odria, 66. Both had been candidates against Belaunde, ripped him as a "demagogue," even tried to pin a Red tag on him when leftists joined his coalition party. Following their defeat, Haya and Odria still controlled 110 congressional seats, v. 70 for Belaunde's own Accion Popular. Yet last week, 15 months after the election, Peru presented a picture of relative stability and progress rare for Latin America.

The gross national product is on its way to a record $3 billion this year, and unemployment is not even a problem. The balance of payments for mid-1964 yielded a $30 million surplus, gold and dollar reserves are up more than 50% over a year ago. Something like 400 new laws are on the books. Among them: one of Latin America's best agrarian reforms for resettling 1,000,000 peasants on undeveloped land, a free-education bill that will take a youngster from elementary school through college, and a record $770 million budget to make a solid start on the programs. "When both sides want to agree," says Belaunde reasonably, "agreement is no problem."

Chaos or Conciliation. Not so long ago, Peruvians would have hooted at the sentiment. Yet after last year's bitter election, Winner Belaunde and Losers Haya and Odria had a simple choice --they could continue the vendetta, or they could pull together for the reforms all had promised in their campaigns. Belaunde was shrewd enough to choose conciliation. Shortly before his inauguration, he won a general agreement from the opposition leaders for a broad program of social and economic reforms. But making it work was something else again. In Congress, Haya and Odria party members often refused to go along. Finally last December, Belaunde's government angrily threatened to hold a plebiscite election that would bring in a whole new Congress. Just as angrily, the opposition carried a measure in Congress censuring Belaunde's Premier, Oscar Trelles, and forced him to resign. In the midst of the melee, however, Belaunde strengthened his fragile mandate when his Accion Popular defeated the combined opposition in municipal elections with 47% of the vote.

Out with the Left. The whole experience apparently sobered both sides, and they have moved steadily closer ever since. Belaunde meets frequently with Haya and Odria lieutenants, takes pains to buttonhole opposition Congressmen for arm-in-arm chats and friendly lunches at the presidential palace. The far-leftists who once supported Belaunde are no longer welcome. In the past six months, his police have been jailing extremists all over the country, and his Accion Popular Party has expelled its former general secretary, Leftist Mario Villaran. Last April, when Peru's 10,000 Communist-controlled bank employees went on strike, Belaunde threatened to lift their social security rights unless they went back to their jobs. They did.

Another ticklish problem was what to do about the U.S.-owned International Petroleum Co., which has been operating the rich La Brea y Parians basin for 50 years under a series of contracts that many Peruvians consider unfair and illegal. Last year Belaunde's government canceled the contracts amid leftist cries for an outright takeover. Belaunde refused, and last week he was hammering out the final details of a new contract that will keep I.P.C. in Peru but give the government a greater share of profits.

No one pretends that everything is sweet harmony in Peru. Last week Belaunde was embroiled in a major congressional fight over his 1965 budget, which runs $75 million more than this year's record. To avoid a deficit, Belaunde wants to raise taxes; the opposition wants to leave taxes alone and slice the budget down to size. The result is likely to be a compromise. "Belaunde is beginning to look like a statesman," says an opposition leader. "If we can only curb his tendency to spend more than he should, Peru may well have its revolution within the law."

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