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. The free-market policies championed by the second Belaunde administration hurt the economy further, high international interest rates on the ever-growing foreign debt, and a devastating 1982-83 El Niño, brought down every hope of swift recovery. Aggravating this already gloomy scenario, the neo-Maoist Shining Path and the Túpac Amaru Revolutionary Movement guerrillas, undertook terrorist actions both in the countryside and big cities, including Lima, forcing the government to commit ever-increasing resources to the fight, but also to re-build the damaged infrastructure At the time Alan Garcia took office for the first time (1985), elected on the basis of a populist platform, anchored in the dissatisfaction with burgeoning inflation, as well as monetary policies, a number of shortsighted, ill-fated, so-called heterodox policies were pursued. The 129
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