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Peru - Glossary Index
Sources: The Library of Congress Country Studies; CIA World Factbook

      Glossary -- Peru

      Alliance for Progress
      Established in 1961 at a hemispheric meeting in Punta del Este, Uruguay, under the leadership of President John F. Kennedy as a long-range program to help develop and modernize Latin American states. Program involved various forms of foreign aid from the United States to all states of Latin America and the Caribbean, except Cuba. Its main instruments for fostering modernization were development loans offered at very low or zero interest rates. Program called for multisectoral reforms, particularly in health and education.
      Andean Initiative (or Andean Strategy)
      At the February 1990 Cartagena (Colombia) Drug Summit, the presidents of Bolivia, Colombia, Peru, and the United States agreed to mount a regional attack on the drug trade. Their governments thereby qualified for United States counternarcotics assistance. After taking office in July 1990, President Alberto K. Fujimori proposed a comprehensive counternarcotics effort, to include narcotic law enforcement, demand reduction, public diplomacy, and economic development. However, progress in organizing this strategy was hindered by police/military rivalries and corruption. Furthermore, in late September 1990 Fujimori turned down US$35.9 million in authorized FY1990 United States military assistance after the United States failed to meet his concerns about the military focus of its antidrug strategy in Peru. After extensive talks, Fujimori signed the Peru-United States umbrella agreement on drug control and economic assistance on May 14, 1991, establishing a political understanding at the highest level and serving as a framework for a coordinated, comprehensive program to dismantle the drug trade in Peru with assistance with the United States, other developed countries, and international organizations. It addresses the role of the police and military in counternarcotics activities, alternative econmic assistance, crop substitution, and access to establishing legitimate economies versus the cultivation and illicit processing of coca leaf into cocaine products.
      Andean Pact
      An economic group, the Andean Common Market, created in 1969 by Bolivia, Colombia, Chile, Ecuador, and Peru as a subregional market to improve its members' bargaining power within the Latin American Free Trade Association (LAFTA) and to encourage increased trade and more rapid development. LAFTA, which dated from 1960, was replaced in 1980 by the Latin American Integration Association (Asociación Latinoamericana de Integración--ALADI), which advocated a regional tariff preference for goods originating in member states. Chile left the Pact in 1976. The threat that Peru might withdraw from the Pact had receded by August 1992.
      A high court of justice, exercising some administrative and executive functions in the colonial period.
      A self-governing and land-owning peasant community in the Andean highlands. May refer to either a village, a kinship group, or a class-like organization, usually based on collective agriculture. Although a pre-Columbian term, ayllu has been used as a synonym for contemporary highland Peasant Communities.
      Baker debt-reduction plan
      As part of the Enterprise for the Americas Initiative (q.v.), Nicholas F. Brady, the United States secretary of the treasury in the administration of President George H.W. Bush (1989-93), led a United States Government interagency process that determined country eligibility for debt reduction. The Brady Plan has been used to forge agreements between banks and the governments of several Latin American nations.
      Squatter settlements or shantytowns that surround Lima and other urban centers. Since the late 1960s, these settlements have been also known as pueblos jóvenes (young towns).
      A town council in the colonial period, usually composed of the most prominent citizens.
      A term that has a variety of definitions and social implications. During colonial times, it was equivalent to mestizo but has evolved to include persons of mixed or pure native American ancestry who are trying to move up the social and economic ladder by observing various Hispanic cultural norms. Cholos speak Spanish in addition to an indigenous language. Choloficación (Cholofication) refers to the transition process from native American to mestizo status.
      Literally, copaternity. A system of ritual coparenthood that links parents, children, and godparents in a close social or economic relationship.
      Contadora Support Group
      A diplomatic initiative launched by a January 1983 meeting on Contadora Island off the Pacific coast of Panama, by which the "Core Four" mediator countries of Mexico, Venezuela, Colombia, and Panama sought to prevent through negotiations a regional conflagration among the Central American states of Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. In September 1984, the negotiating process produced a draft treaty, the Contadora Act, which was judged acceptable by the government of Nicaragua but rejected by the other four Central American states concerned. The governments of Peru, Uruguay, Argentina, and Brazil formed the Contadora Support Group in 1985 in an effort to revitalize the faltering talks. The process was suspended unofficially in June 1986 when the Central American governments refused to sign a revised treaty. The Contadora process was effectively superseded by direct negotiations among the Central American states.
      consumer price index (CPI)
      A statistical measure of sustained change in the price level weighted according to spending patterns.
      An adherent to corporatism, a sociopolitical philosophy that found its most developed expression in Italy under Benito Mussolini. Corporatism is antithetical to both Marxist and liberal democratic political ideals. A corporatist would organize society into industrial and professional corporations that serve as organs of political representation within a hierarchical, centralized polity.
      corregidores de indios
      Magistrates or chief officers, usually a white or cholo (q.v.), in preindependence Peru charged with administering local native American affairs in corregimientos (q.v.).
      Colonial administrative districts that later became intendencias (intendancies or provinces) and Catholic dioceses or parishes.
      dependency analysis
      A theory that seeks to explain the continuing problems of Latin American underdevelopment and political conflict by positing the existence of an imperialistic, exploitative relationship between the industrialized countries and the developing nations of Latin America and other developing regions.
      Economic Commission for Latin America and the Caribbean (ECLAC)
      A United Nations regional economic commission established in 1948 as the Economic Commission for Latin America (ECLA). In 1984 expanded its operations and title to include the Caribbean. Main functions are to initiate and coordinate policies aimed at promoting economic development. In addition to the countries of Latin America and the Caribbean, ECLAC's forty-one members in 1992 included Britain, Canada, France, the Netherlands, Portugal, Spain, and the United States. There were an additional five Caribbean associate members.
      economies of scale
      Decreases in the unit cost of production associated with increasing output.
      effective protection
      The percentage increase in value added, compared with what it could have been at international prices, as a result of the higher domestic prices permitted by protection.
      Colonial grantees, usually large landowners, to rights over native American labor and tribute in exchange for assuming responsibility to protect and Christianize these native subjects.
      A system adopted in 1503 whereby the Spanish Crown assigned rights over native American labor and tribute in the Spanish American colonies to individual colonists (encomenderos) in return for protecting and Christianizing their subjects. However, most ended up as virtual slaves with no recognized rights. The system was not ended until late in the eighteenth century.
      Enterprise for the Americas Initiative
      A plan announced by President George H.W. Bush on June 27, 1990, calling for the United States to negotiate agreements with selected Latin American countries to reduce their official debt to the United States and make funds available through the restructuring for environmental programs, to stimulate private investment, and to take steps to promote extensive trade liberalization with the goal of establishing free trade throughout the Western Hemisphere.
      export-led growth
      An economic development strategy that emphasizes export promotion as the engine of economic growth. Proponents of this strategy emphasize the correlation between growth in exports and growth in the aggregate economy.
      fiscal year (FY)
      Calendar year.
      gamonales (sing. gamonal)
      Ruthless rural bosses who used armed force as well as the law to obtain land, displacing many native Americans in the process.
      gross domestic product (GDP)
      A measure of the total value of goods and services produced by the domestic economy during a given period, usually one year. Obtained by adding the value contributed by each sector of the economy in the form of profits, compensation to employees, and depreciation (consumption of capital). The income arising from investments and possessions owned abroad is not included, hence the use of the word domestic to distinguish GDP from gross national product (q.v.).
      gross national product (GNP)
      Total market value of all final goods and services produced by an economy during a year. Obtained by adding the gross domestic product (q.v.) and the income received from abroad by residents less payments remitted abroad to nonresidents.
      Group of Eight
      A permanent mechanism for consultation and political coordination that succeeded the Contadora Support Group (q.v.) in December 1986. It consisted of Argentina, Brazil, Colombia, Mexico, Panama, Peru, Uruguay, and Venezuela. Its second meeting, attended by the presidents of seven member- countries (Panama's membership was temporarily suspended in February 1988), was held in Punta del Este, Uruguay, in October 1988. Like the Contadora Support Group, the Group of Eight advocated democracy and a negotiated solution to the Central American insurgencies. Its name was changed in 1990 to the Group of Rio, which had eleven members in 1992. Peru was suspended from the Rio Group following President Alberto K. Fujimori's self-coup on April 6, 1992, but was formally reinstated in April 1993.
      Hacendados (owners of haciendas) often acted as intermediaries for gamonales (q.v.) in taking over native American lands and extorting wool merchants.
      import-substitution industrialization
      An economic development strategy that emphasizes the growth of domestic industries, often by import protection using tariff and nontariff measures. Proponents favor the export of industrial goods over primary products.
      informal sector
      Unofficial sector of underground economic activity beyond government regulation and taxation, to include street vendors in urban areas as well as coca-growers in rural areas.
      International Monetary Fund (IMF)
      Established on July 22, 1944, the IMF began operating along with the World Bank (q.v.) on December 27, 1945. The IMF is a specialized agency affiliated with the United Nations that takes responsibility for stabilizing international exchange rates and payments. The IMF's main business is the provision of loans to its members when they experience balance-of-payments difficulties. These loans often carry conditions that require substantial internal economic adjustments by the recipients. In 1992 the IMF had 156 members.
      Large estates held as private property, which may be farmed as plantations, by tenant sharecroppers, or as traditional haciendas. The latifundio system (latifundismo) is a pattern of land ownership based on latifundios owned by local gentry, absentee landlords, and domestic or foreign corporations.
      liberation theology
      An activist movement led by Roman Catholic clergy who traced their inspiration to Vatican Council II (1965), where some church procedures were liberalized, and the Second Latin American Bishops' Conference in Medellín (1966), which endorsed greater direct efforts to improve the lot of the poor. Advocates of liberation theology, sometimes referred to as "liberationists," have worked mainly through Christian Base Communities (Comunidades Eclesiásticas de Base--CEBs).
      A person granted a higher degree in a university; also a title bestowed on lawyers.
      Cult of male dominance, derived from the word macho, meaning male.
      A concept used to explain the poor political, economic, and social conditions of individuals within a society, social classes within a nation, or nations within the larger world community. It refers often to poverty-stricken groups left behind in the modernization process. They are not integrated into the socioeconomic system, and their relative poverty increases. Marginality is sometimes referred to as dualism or the dual-society thesis.
      Colonial system whereby the elder son inherited the titles and properties of the family.
      Special officials in colonial Peru appointed, sometimes under threat of physical punishment for refusal, for important celebrations. Their duties included making sure the priest's pay was available and making up shortages out of their personal patrimony.
      Mercosur--(Mercado Común del Cono Sur-- Southern Cone Common Market)
      An organization established on March 26, 1991, by Argentina, Brazil, Paraguay, and Uruguay for the purpose of promoting regional economic cooperation. Chile was conspicuously absent because of its insistence that the other four countries first had to lower their tariffs to the Chilean level before Chile could join. Mercosur aimed to form a common market by December 31, 1994. Bolivia hoped to eventually become a fifth member.
      Originally, term designated the offspring of a Spaniard and a native American. It now means any obviously nonwhite individual who is fluent in Spanish and observes Hispanic cultural norms.
      Very small landholdings, legally held, allowing only a bare existence.
      mita system
      A colonial system whereby all taxpayers had to work a prescribed number of days annually in the mita, or labor pool, to run the households of local leaders. Each taxpayer could be called up by his or her curaca (chief) to work on imperial or local projects at any convenient time.
      mita de minas
      A compulsory labor system implemented by the Spaniards to work the mines. Required that all able-bodied native American men present themselves periodically for short periods of paid work in the mines. System led to abuses: inhumane treatment of the conscripts, arbitrary extensions of the service period, and depletion of adult males from individual communities.
      Rudimentary textile factories set up throughout the highlands in the colonial period to pay the tribute owed to encomiendas (q.v.).
      Organization of American States (OAS)
      Established by the Ninth International Conference of American States held in Bogotá on April 30, 1948, and effective since December 13, 1951, the OAS has served as a major regional organization composed of thirty-five members, including most Latin American states and the United States and Canada. Determines common political, defense, economic, and social policies and provides for coordination of various inter-American agencies. Responsible for implementing the Inter-American Treaty of Reciprocal Assistance (Rio Treaty) (q.v.) when any threat to the security of the region arises.
      Usually a large landowner who is called on to provide his workers land, water, and sometimes materials and/or equipment and salary payments, as well as protection from outsiders, including local officials, and even from fellow workers.
      Praetorianism is a form of militarism in which the armed forces act as a corporate body to maintain control over government, actively intervening in politics to select or change the government. The "ruler-type" praetorian army rejects the existing social order for one based on modernization, industrialization, and rapid economic growth, as the Peruvian Army (Ejército Peruano--EP) did following its assumption of power in 1968. Political scientist Samuel Huntington describes a praetorian society as one in which social forces confront each other directly, with no institutions accepted as legitimate mediaries and, more importantly, no agreement existing among the groups as to an authoritative means for conflict resolution.
      Primary exports
      Peru's traditional primary goods exports, as opposed to manufactured exports, included cotton, sugar, copper, silver, lead, zinc, and oil.
      Protocol of Rio de janeiro (Rio Protocol)
      An agreement concluded in Rio de Janeiro on January 29, 1942, between Peru and Ecuador with the participation of the mediatory nations of Argentina, Brazil, and the United States. It was ratified by the congresses of both Peru and Ecuador on February 26, 1942, and it established the border between the two countries as internationally recognized today. Following the discovery of the Río Cenepa between the Zamora and Santiago rivers in the Cordillera del Cóndor in 1951, Ecuador disputed the treaty demarcation, which then stopped, leaving a stretch of the border uncharted. Ecuador repudiated the treaty in 1960, but the guarantor powers ruled this repudiation invalid.
      pueblos jóvenes
      See barriadas.
      real exchange rate
      The value of foreign exchange corrected for differences between external and domestic inflation.
      Viceroy Francisco de Toledo's orders created hundreds of these colonial settlements for only native Americans. Although conveniently located in the flat valley bottoms, these settlements were established in areas subject to floods and avalanches. Their governing personnel consisted only of native Americans.
      State monopoly of selling inferior goods at inflated prices to conquered native Americans. Set off a wave of violent protests in 1776.
      A formal inquiry conducted at the end of a colonial official's term of office.
      Rio Group
      See Group of Eight.
      Rio Protocol
      See Protocol of Rio de Janeiro.
      Rio Treaty (Inter-American Treaty of Reciprocal Assistance)
      A regional alliance, signed in Rio de Janeiro on September 2, 1947, that established a mutual security system to safeguard the Western Hemisphere from aggression from within or outside the zone. Signatories include the United States and twenty Latin American republics. In 1975 a special conference approved, over United States objections, a Protocol of Amendment to the Rio Treaty that, once ratified, would establish the principle of "ideological pluralism" and would simplify the rescinding of sanctions imposed on an aggressor party.
      Slash-and-burn agriculture
      Method of cultivation whereby areas of the forest are burned and cleared for planting, the ash providing some fertilization. Area is cultivated for several years and then left fallow for a decade or longer.
      sol (S/)
      Peru's unit of currency, technically the nuevo sol (new sol), consisting of 100 céntimos, established officially as Peru's monetary unit on January 4, 1991. In late 1992, the exchange rate for the new sol was S/1.63=US$1. In the late 1800s, a silver sol was the country's currency until its metallic content exceeded its monetary value and it was exported instead of circulating. Before the 1860s, Bolivian coins circulated in Peru. The sol was established by law in 1931 as an unminted gold coin; bank notes were issued in terms of gold soles. It replaced the Peruvian gold pound created in 1900. The Peruvian pound was equivalent in value to the British pound, and both circulated as legal tender. Beginning in 1975, the value of the sol declined continuously as officials attempted to adjust the exchange rate to the rate of inflation. By mid-1985 the sol had deteriorated to more than S/11,900 per US$1, when a new unit of currency, the inti (equivalent to S/1,000), was introduced. By 1990 US$1 equaled about 188,000 intis. Consequently, President Fujimori adopted the new sol, equivalent to 1 million inti, in July 1991. The free exchange rate in Peruvian currency in February 1993 was 2,100 new soles to the dollar.
      terms of trade
      The relationship between the price of primary exports and the price of manufactured goods. May be defined as the ratio of the average price of a country's exports to the average price of its imports. In international economics, the concept of "terms of trade" plays an important role in evaluating exchange relationships between developed and developing nations.
      value-added tax (VAT)
      An incremental tax applied to the value added at each stage of the processing of a raw material or the production and distribution of a commodity. It is calculated as the difference between the product value at a given state and the cost of all materials and services purchased as inputs. The value-added tax is a form of indirect taxation, and its impact on the ultimate consumer is the same as that of a sales tax.
      World Bank
      Informal name used to designate a group of four affiliated international institutions: International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA). IBRD, established in 1945, has the primary purpose of providing loans at market-related rates of interest to developing countries at more advanced stages of development. IDA, a legally separate loan fund administered by the staff of IBRD, was set up in 1960 to furnish credits to the poorest developing countries on much easier terms than those of conventional IBRD loans. IFC, founded in 1956, supplements the activities of IBRD through loans and assistance designed specifically to encourage the growth of productive private enterprises in less developed countries. MIGA, founded in 1988, insures private foreign investment in developing countries against various noncommercial risks. The president and certain senior officers of IBRD hold the same positions in the IFC. The four institutions are owned by the governments of the countries that subscribe their capital. To participate in the World Bank group, member states must first belong to IMF (q.v.).

    NOTE: The information regarding Peru on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Peru Glossary information contained here. All suggestions for corrections of any errors about Peru Glossary should be addressed to the Library of Congress and the CIA.

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