2571 After attempts to entice the large multinational players to develop new projects failed, the military regime nationalised all foreign-owned large mining companies, save Southern Peru. Cerro de Pasco Copper Corporation became Empresa Minera del Centro del Perú (Centromin Peru), Marcona Mining Company was suceded by Empresa Minera del Hierro del Peru (Hierro Peru). All non-producing mining assets were placed in the hands of a newly-created state holding: Empresa Minera del Peru (Minero Peru). By the early-1970s military regimes were in power in almost all South America, the US was looked at with various degrees of distrust. The military regime that took power in Peru solemnly declared to be neither capitalist nor communist, it called itself revolutionary government of the armed forces, promising a brand-new socialism, it pursued an aggressive policy of export substitution, in the footsteps the CEPAL model, but also made strenuous efforts to empower the workforce, through the so-called industrial community. The 1971 General Mining Law considered mining a national interest activity, divided into two broad fields: state and private, private could be local and/or foreign; metals and minerals trading was to be in the hands of a new state company: Minero Peru Comercial (Minpeco). The predominantly vitriolic nationalist rhetoric and the subsequent expropriation of large mining companies, kept foreign mining investment at bay, only the Cuajone copper mine, owned by Southern Peru, received the green light. But in the tense atmosphere of those years, the spectre of nationalisation was ever present. When Francisco Morales Bermudez ousted Juan Velasco (1975), the second phase of the Peruvian experiment began, declining copper prices and fishmeal exports signalled the end of the economic boom. The new administration gradually shifted towards more moderate right-wing policies; by the late second half of the 1970s social unrest and worsening economic conditions were common currency in the country, as the foreign debt soared, there was widespread consensus a change of course was badly needed. During the twelve years (1968-1979) of the military regime, the Cuajone copper mine was the only new large-scale operation inaugurated (1976), it would be the last new mine solely financed by private capital until the commissioning of Carachugo and Maqui Maqui (Yanacocha), in the 1990s. As for the state enterprises, the Ilo copper refinery began production (1975), the Cajamarquilla zinc refinery began construction (1978); the Cobriza and Andaychagua projects were developed by Centromin. The Tintaya copper project, still in the hands of Minero Peru, started production in 1985. The inauguration of the oil pipeline and the Cerro Verde metallurgical plant (both in 1977), coupled with a new surge in commodity prices came too late to change the fortunes of the regime: falling exports, declining international reserves and a rising inflation were the backdrop every future government had to grapple with. In the end, the Peruvian experiment failed, multinational firms engaged in extractive activities withdrew from the country, the domestic private sector was too small and lacked both the expertise and willingness to undertake large-scale projects on their own. National capital, supposed to be the beneficiary of all the nationalist undertakings felt intimidated by the social policies of the regime; hence, the public sector filled the gap, growing far beyond the original intentions. On the other hand, the scepticism of Western governments and international organisations forced Peru to rely on private lending sources, foreign debt expanded steadily. The industrialisation objectives did not go much further, stated national autonomy goals were not enough to entice technology-intensive investment sources that could spur fast-track industrialisation, relapsing into old patterns of dependence. In 1980, Fernando Belaunde, the very same president who was deposed 12 years before, was sworn in for a new term of office. Policies and practices adopted during the 12-year military rule were considered well-intentioned but mistaken, at the very best; the new administration gradually moved the country away from the nationalistic discourse, with a view to re-connect with and re-gain the confidence of international capital. A brave move against the backdrop of a world still recovering from the oil crisis of the 1970s, and about to face the debt crisis of the 1980s.
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