The political scene in Peru in the 1980s was tumultuous. The nation emerged from 12 years of military rule in 1980, with reformist political parties allowed to participate in elections. Fernando Belaúnde Terry, elected president in 1980 under the banner of the leftist Acción Popular party, embarked upon a series of reform measures intended to repair the economic damage of mismanagement by the military junta.
Belaúnde's reforms had little chance of success, however, because of a combination of factors: Peru was buffeted by natural disasters and a global downturn in commodity prices that sparked a cycle of high inflation, growing unemployment, and shortages of resources. The economic collapse contributed to the privation of poor and rural populations, an atmosphere in which the Sendero Luminoso movement could earn widespread support in the countryside.
Sendero Luminoso was founded in 1980 at San Cristóbal de Huamanga, a university in the city of Ayacucho, in southwestern Peru, by professor Abimael Guzman. The group's platform was explicitly modeled on the Maoist revolutionary movement in China, building from a base of rural support to establish a Marxist central government. Peru's other major revolutionary movement, Movimiento Revolucionario Túpac Amaru (MRTA), emerged in 1985 from hard-line elements of several legal Marxist political parties. Although MRTA was responsible for a share of atrocities (the U.S. State Department estimated MRTA committed 10 to 20 percent of the political violence in this period), Sendero Luminoso was the main provocateur in the growing war between insurgents and the central Peruvian government.
With the country beset by political violence and terrorist attacks, severe inflation and a stagnant economy, the center-leftist American Popular Revolutionary Alliance (APRA) succeeded at electing Alan García to the presidency in 1985. The transfer of power from Belaúnde to García marked Peru's first peaceful government transition in 40 years.
García's government, however, responded ineffectively to Peru's terrorist movements, and attempted to shore up domestic political support by initiating a campaign to nationalize the banking system. Ultimately, the APRA government lost the support of both moderates, who were alienated by the turn towards centralization, and of leftists, who found García's efforts insufficient.
At the same time, while violence grew among the terrorist groups, government-affiliated paramilitaries, such as the Rodrigo Franco Command run by the Interior Ministry, committed their own atrocities. U.S. State Department estimates cited as many as 20,000 deaths from political violence in the 1980s, with 3,384 such deaths in 1990 alone. In addition, Amnesty International cited documents from the Peruvian government noting 5,000 complaints of "disappearances."
With the nation's political parties in disarray and growing popular resentment against the central government's effectiveness, the stage was set for the rise of political outsider Alberto Fujimori and his Cambio '90 coalition, which swept into power based on strong support from small business interests and evangelical Christian outreach.
Novelist and free-market liberal Mario Vargas Llosa won the most votes in the first round of national elections (28 percent to Fujimori's 24 percent), but with the support of APRA Fujimori won the second round with 57 percent of the vote to Vargas Llosa's 34 percent. Cambio's support was contingent on opposition to its more conservative political rivals (such Vargas Llosa), however, and once Fujimori took office the coalition fractured. After abandoning much of his leftist economic stance in favor of economic "shock therapy," Fujimori was able to secure domestic political support by focusing on the fight against Sendero Luminoso and MRTA.