Peru’s first full democratic election in 12 years, in 1980, coincided with the first actions of Sendero Luminoso (Shining Path), a terrorist group based on Maoist ideology that rose out of the country’s economic chaos and social inequity. The Shining Path rose alongside the smaller Movimiento Revolucionario Túpac Amaru, or MRTA, for short. Both organizations terrorized Peru’s countryside over the next two decades and began receiving significant financial support from the cocaine business, which had just begun to grow rapidly in the upper Huallaga Valley.

Between 1980 and 2000, Andean villagers were frequently caught in the crossfire between these terrorist organizations and the Peruvian army. The Shining Path would force the villagers to give them food or supply information, and the army in retaliation would massacre the whole village, or vice versa. People in the city were largely uninterested and protected from the countryside war and were shocked to hear the official results of the Truth and Reconciliation Commission’s report in 2003. More than 70,000 people were killed during the terrorism years, and 75 percent of them were Quechua highlanders. Half were killed by Shining Path, a third by government forces (police and armed forces), and the rest are so far unattributed.

The worst massacres of the Shining Path were between 1983 and 1984, the same year that Latin American economies collapsed under a debt crisis and that Peru’s north was devastated by El Niño rains. The APRA candidate, Alan García, at age 35, won the 1985 elections because he offered a jubilant, hopeful future for Peruvians. He promptly shocked the international finance community by announcing that Peru would only be making a small portion of its international debt payments. García’s announcement sparked a two-year spending spree followed by Peru’s worst economic collapse ever, with hyperinflation so extreme that restaurants were forced to increase their menu prices three times each day. Peru’s struggling middle class saw their savings disappear overnight.

The García administration unsuccessfully sought a military solution to the growing terrorism, allegedly committing human rights violations that are still under investigation. The most important cases include the Accomarca massacre (1985), where 47 peasants were executed by the Peruvian armed forces; the Cayara massacre (1988) in which some 30 were killed and dozens disappeared; and the summary execution of around 200 inmates during prison riots in Lurigancho, El Frontón Island, and Santa Bárbara in 1986. An estimated 1,600 forced disappearances took place during García’s presidency.

Peruvian novelist Mario Vargas Llosa led a series of middle- and upper-class protests against García’s plan to nationalize Peru’s banking system. Vargas Llosa appeared likely to win the 1990 election but was defeated at the last minute by Alberto Fujimori, a low-profile university rector of Japanese descent who appealed to Peru’s mestizo and Indian voters mainly because he was not part of Lima’s elitist white society. Former president García, meanwhile, fled Peru in 2002 under a cloud of allegations of extortion and corruption.