The Shining Path spreads control throughout the countryside through sheer terror. President García reduces reliance on military force to combat the guerillas, and the violence spreads. In urban areas, the informal, and often illegal, economy grows as a result of unemployment, underemployment, and a Byzantine bureaucratic system governing the creation of small businesses.
The Shining Path shifts its focus to Lima, where it conducts regular kidnappings, murders, bombings, and attacks on infrastructure. A surge in criminal violence accompanies economic decline. President Fujimori increases reliance on the military for power and passes laws by decree powers awarded him by Congress. Corruption scandals surface at the highest ranks of government and law enforcement.
President Fujimori institutes martial law, suspending Congress and the courts. An emergency rule to combat corruption and terrorism enables the capture and sentencing of a key Shining Path leader, restoring the tattered prestige of Peru's government and police force. Guerilla raids begin to diminish. In 1993 the constitution is restored, with some amendments.
In a controversial move, President Fujimori grants amnesty to those previously convicted of human rights abuses. Government forces end a four-month hostage-taking crisis at the Japanese embassy in Lima by killing Túpac Amaru Revolutionary Movement guerillas and freeing more than 70 diplomats and business leaders. The government strengthens its fight against narcotics cultivation and trafficking.
Fujimori wins fraudulent elections, then resigns, bowing to pressure from opposition parties and evidence of widespread corruption. Presidential advisor Vladimiro Montesinos is apprehended and charged with crimes ranging from corruption to murder. New president Toledo establishes a Truth and Reconciliation Commission which finds that 45,000 people were killed in the two-decade-long civil war.
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