Progress to Prosperity

Peru's General Manuel Odria, onetime subdirector of his country's War College, held a soldierly reunion this week in Lima with Venezuela's Colonel Marcos Perez Jimenez, one of his best students back in the early '40s. Perez Jimenez revisited Peru with the prestige of an old grad who made good: he is the dictatorial President of Venezuela (TIME, Feb. 28). Host Odria greeted him with easy confidence: he is the dictatorial President of Peru.

Solidarity among strongmen seemed to be the meeting's theme, but it was tinged with subtle rivalry. The gift that Perez Jimenez brought was a replica of Simon Bolivar's sword, studded with 860 sapphires--a lavish memento, but also a neat reminder that Peru historically owes its independence to Venezuela's Bolivar. And in any economic comparison, oil-rich Venezuela could lay claim to the more spectacular boom (TIME, Feb. 28). But Peru could also make an impressive boast.

Quietly and courageously. Peru has revamped its economy and pushed ahead to a solidly based prosperity. In 1949 its government became one of the first in the world to cast off a stifling tangle of wartime and postwar controls on business and currency exchange. Since then, national production has doubled. Foreign investors have been looking toward Peru with hope, and moving their money in. And the present prosperity seems to be only the prelude to long-haul progress.

Odria feels proud of his role in this task, and partly in consequence, he has recently made an unorthodox and undictatorlike decision. He says, repeatedly, that at the end of his term, in June 1956, he intends to step out of the presidency. A promise to leave power, followed by a coy show of succumbing to duty and staying on, is standard politics in Latin America. But Odria seems firmly set on leaving. Said he recently: "The constitution clearly states that at the end of my term I must go. That is what I plan to do. Moreover, I am tired."

A Land Asunder. After seven years of governing Peru, Odria, at 57, may well be tired. The country he runs is geographically sundered into three parts by the highest mountains in the world outside the Himalayas.

P:In the Green Hell to the east is a rain-catching jungle bigger than Texas that supports a scant 13% of the people, some of them aboriginal headshrinkers.

P:West of the jungle rise the high Andes --"God Almighty with His back up." On this vast plateau the ancient Incas, seeming to thrive on the cold, thin air, built the roads and stone cities for a creative population. The 5,400,000 numb survivors cling to their ancestral languages and communal farms, to their llamas and alpacas, but they have almost no part in their country's money economy. Only the rare towns and the mines, where U.S.-owned companies dig copper, lead, zinc and silver, are in this century.

P:Peru's coast is even more paradoxical than its mountains: it is a desert that blooms, an air-conditioned strand in the tropics. Only 10 to 100 miles wide, the coastland stretches for 1,400 miles. Rain is virtually unknown there, but 52 well-fed rivers poke down the plunging mountains. Dammed and channeled, this water turns the valleys green with sugar cane, ripens grapes for Peru's famed pisco brandy, grows the fine, long-staple cotton that is king of the country's exports. The Humboldt Current cools the whole coast, and as a crowning convenience serves up the anchovies that feed the seabirds that provide the guano (droppings) used to fertilize the soil. In the coastal north are oilfields that make Peru an oil exporter (though output is dropping).

Rise of Apra. Can Peru go on indefinitely with its 2,000,000 coastal population in the 20th century and its mountain people still in the 16th? Yes, say the country's conservatives, who center around the so-called "Forty Families"--the old, cultured, inward-looking class who own the coastal haciendas and most of the businesses and industries of Lima. But in the '20s, a group of left-wingers at San Marcos University (which is 85 years older than Harvard) saw in the national division the makings of an extremist mass party. A silver-tongued intellectual named Victor Raul Haya de la Torre thereupon founded a movement called Apra (from the Spanish initials of Popular Revolutionary Alliance of America).

Haya, a brilliant theorist, gave Apra a philosophy dizzyingly compounded of anti-U.S. nationalism, Marxism, reverence for the Incas, Nazi symbolism and even Einstein's theory of relativity as applied by Haya to history. Fighting back bloodily against the suppressive tactics of a series of dictators, Apra earned mass support and the hatred of the rich rightists and the army. Finally, in 1945, retiring President Manuel Prado allowed a free election. Jose Luis Bustamante, an Apra-supported but non-Aprista President, was chosen, and Apra had working control of Congress.

Haya emerged from eleven years of hiding to become Peru's unofficial strongman. He first tightened socialistic controls on prices and currency exchange, a move every bit as alarming as the conservatives had feared. They boycotted Congress, paralyzing it. Then came violence: the assassination of the editor of La Prensa, the Apra-hating newspaper owned by conservative Cotton Exporter Pedro Beltran. Apristas were blamed; President Bustamante called for a soldier to take charge of public order. His choice: gimlet-eyed Colonel Manuel Odria, then chief of staff.

Frustrated, confused and angry, Apristas with navy help revolted violently one Sunday at dawn in Callao, but were speedily put down by the army at a cost of 100 killed. The government promptly outlawed the party. Less than a month later, Odria, by then convinced of his mission, seized power in a military junta. Haya took asylum in Lima's Colombian Embassy, became the world's most celebrated refugee before Odria freed and exiled him last year (he now lives in Belgium).

A Free Sol. No rich, aristocratic Limeno, Odria is a provincial of Basque, Italian and Indian blood, from a little Andean town. Except for a trip to the U.S. and neighboring countries, he has traveled little. His tastes run to bullfighting, Italian opera and the raising of fighting cocks. But taciturn Manuel Odria knows how to get sound advice and has the nerve to carry it through. To establish an economic policy, he called in U.S. Economists Julius Klein and Julien M. Saks. They studied Apra's food subsidies, price ceilings, and artificial efforts to hold up the value of the sol, Peru's monetary unit. Their advice: dump the controls and give the economy a fair chance to run free. Odria did.

The sol slid nerve-rackingly from the pegged 6.50 per dollar to 15; Beltran and his exporting friends began to get more than twice as much for their incoming dollars; other businessmen, who had learned to like the controls system, took a beating. But the freed economy, providentially aided by the Korean war demand for metals and cotton, soon stopped rocking. The graft and black markets inevitable with controls disappeared. With restrictions on remitting profits gone, foreign investors showed new interest in Peru, and Odria welcomed them in with new laws opening up oil and mining concessions.

Now foreign oil companies are ranging northern Peru, spending heavily to find new oilfields (with little success, so far).

Down the coast, at Marcona, the Utah Construction Co. is mining 1,800,000 tons of iron ore a year. In the south, American Smelting and Refining Co. is investing $200 million (half of it from the U.S. Export-Import Bank) in huge new copper mines at Toquepala. Exports--mainly cotton, wool and minerals--have nearly doubled. Government revenues, tripled since 1948, are building schools, hospitals, roads, vital irrigation projects, public housing and a joint power-dam and steel-plant project on the Santa River. The sol stays free and steady at 19. Price levels are 79% higher than 1948, but wages--though still low--have kept pace.

An Unfree Soul. Unfortunately, Odria's economic success has not been accompanied by any comparable growth of freedom or democratic political maturity. His law for the Security of the Republic, the most dreaded instrument of the regime, empowers the Minister of Interior to "take whatever preventive measures he may consider necessary to safeguard political and social order . . . and the courts shall not intervene until the guilty party has been placed at their disposal." Odria explains that the law is "a stick I keep hanging over my door, not for use, but just so people will see it. I am like a Father who wants his son to behave properly, and keeps a whip handy." Nevertheless, everyone can see it.

Meetings cannot be held without police permits; in practice, permits are not granted. Apristas (and other oppositionists) are shot, exiled or shipped off to prison on Fronton Island, near Callao, and forgotten. Imprudent editors who displease the regime are sometimes bludgeoned by prowlers in the night. Students at ancient San Marcos are restive; last week, as it often is, the university was closed down after a strike. Apra simmers explosively underground. The Indians still ive in their timeless withdrawal, despite some experiments aimed at improving their lot (TIME, May 23).

The Vital Vote. Adding up Odria's record, most Peruvians give him his due but now yearn for a change. Odria knows this; he is honest with himself. "We are Latins," he says. "People are growing a bit tired of me. That is the Latin way." The attention of Peru, and of Venezuela's Perez Jimenez and other interested bystanders, now centers on the manner of the change, and the man whom Odria will choose to sit in the carved presidential armchair once used by Peru's Conquistador Francisco Pizarro.

Of the kind of change he proposes, Odria says: "I shall go, but the regime will go on. Whoever succeeds me must be a man willing to carry through my program for the country's good." Such talk plainly points to continued suppression of Apra, and no other party has managed to survive the politically barren years in any strength. By the present signs, therefore, Odria will stage a purely formal election vith a single, designated candidate.

A year ago the candidate would probably have been Odria's close friend, General Zenon Noriega. But last fall Noriega, impatient to be boss, hatched an ill-timed plot; he now lives obscurely in Argentine exile. The unrest that followed may have helped convince Odria that his successor should be a civilian. Half a dozen, all from the wealthy right, are vaguely available. Among them: ex-President Manuel Prado, fondly remembered for staging 1945's free elections, and Foreign Minister David Aguilar. But whoever runs, only one vote will really count. That is the vote of Manuel Odria himself, who says, glancing at the blueprints on his desk: "All this must continue. I will see to it."

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