Peruvian territory was home to several ancient cultures, ranging from the Norte Chico civilization in the 32nd century BC, the oldest civilization in the Americas, to the Inca Empire, the largest and most sophisticated state in pre-Columbian America. The Spanish Empire conquered the region in the 16th century and established a Viceroyalty that encompassed most of its South American colonies, with its capital in Lima. Peru formally proclaimed independence in 1821, and following the military campaigns of José de San Martín and Simón Bolívar, and the decisive battle of Ayacucho, Peru secured independence in 1824. In the ensuing years, the country enjoyed relative economic and political stability, which ended shortly before the War of the Pacific with Chile. Throughout 20th century, Peru endured armed territorial disputes, coups, social unrest, and internal conflicts, as well as periods of stability and economic upswing.
Peru is a representative democratic republic divided into 25 regions. It is a developing country with an upper middle income economy and a high Human Development Index score with a poverty level around 25.8 percent. Its main economic activities include mining, manufacturing, agriculture and fishing. The country also forms part of The Pacific Pumas, a political and economic grouping of countries along Latin America’s Pacific coast that share common trends of positive growth, stable macroeconomic foundations, improved governance and an openness to global integration; it is an active member of the Asia-Pacific Economic Cooperation; and it is considered as a middle power.
The Peruvian population, estimated at 31.2 million in 2015, is multiethnic, including Amerindians, Europeans, Africans and Asians. The main spoken language is Spanish, although a significant number of Peruvians speak Quechua or other native languages. This mixture of cultural traditions has resulted in a wide diversity of expressions in fields such as art, cuisine, literature, and music.
The name of the country may be derived from Birú, the name of a local ruler who lived near the Bay of San Miguel, Panama, in the early 16th century. When his possessions were visited by Spanish explorers in 1522, they were the southernmost part of the New World yet known to Europeans. Thus, when Francisco Pizarro explored the regions farther south, they came to be designated Birú or Perú.
An alternative history is provided by the contemporary writer Inca Garcilasco de la Vega, son of an Inca princess and a conquistador. He said the name Birú was that of a common Indian happened upon by the crew of a ship on an exploratory mission for governor Pedro Arias de Ávila, and went on to relate more instances of misunderstandings due to the lack of a common language.
The Spanish Crown gave the name legal status with the 1529 Capitulación de Toledo, which designated the newly encountered Inca Empire as the province of Peru. Under Spanish rule, the country adopted the denomination Viceroyalty of Peru, which became Republic of Peru after independence.
The earliest evidences of human presence in Peruvian territory have been dated to approximately 9,000 BC. Andean societies were based on agriculture, using techniques such as irrigation and terracing; camelid husbandry and fishing were also important. Organization relied on reciprocity and redistribution because these societies had no notion of market or money. The oldest known complex society in Peru, the Norte Chico civilization, flourished along the coast of the Pacific Ocean between 3,000 and 1,800 BC. These early developments were followed by archaeological cultures that developed mostly around the coastal and Andean regions throughout Peru. The Cupisnique culture which flourished from around 1000 to 200 BC along what is now Peru's Pacific Coast was an example of early pre-Incan culture. The Chavín culture that developed from 1500 to 300 BC was probably more of a religious than a political phenomenon, with their religious centre in Chavin de Huantar. After the decline of the Chavin culture around the beginning of the 1st century AD, a series of localized and specialized cultures rose and fell, both on the coast and in the highlands, during the next thousand years. On the coast, these included the civilizations of the Paracas, Nazca, Wari, and the more outstanding Chimu and Mochica. The Mochica, who reached their apogee in the first millennium AD, were renowned for their irrigation system which fertilized their arid terrain, their sophisticated ceramic pottery, their lofty buildings, and clever metalwork. The Chimu were the great city builders of pre-Inca civilization; as loose confederation of cities scattered along the coast of northern Peru and southern Ecuador, the Chimu flourished from about 1150 to 1450. Their capital was at Chan Chan outside of modern-day Trujillo. In the highlands, both the Tiahuanaco culture, near Lake Titicaca in both Peru and Bolivia, and the Wari culture, near the present-day city of Ayacucho, developed large urban settlements and wide-ranging state systems between 500 and 1000 AD.
In the 15th century, the Incas emerged as a powerful state which, in the span of a century, formed the largest empire in pre-Columbian America with their capital in Cusco. The Incas of Cusco originally represented one of the small and relatively minor ethnic groups, the Quechuas. Gradually, as early as the thirteenth century, they began to expand and incorporate their neighbors. Inca expansion was slow until about the middle of the fifteenth century, when the pace of conquest began to accelerate, particularly under the rule of the great emperor Pachacuti. Under his rule and that of his son, Topa Inca Yupanqui, the Incas came to control most of the Andean region, with a population of 9 to 16 million inhabitants under their rule. Pachacuti also promulgated a comprehensive code of laws to govern his far-flung empire, while consolidating his absolute temporal and spiritual authority as the God of the Sun who ruled from a magnificently rebuilt Cusco. From 1438 to 1533, the Incas used a variety of methods, from conquest to peaceful assimilation, to incorporate a large portion of western South America, centered on the Andean mountain ranges, from southern Colombia to Chile, between the Pacific Ocean in the west and the Amazon rainforest in the east. The official language of the empire was Quechua, although hundreds of local languages and dialects were spoken. The Inca referred to their empire as Tawantinsuyu which can be translated as "The Four Regions" or "The Four United Provinces." Many local forms of worship persisted in the empire, most of them concerning local sacred Huacas, but the Inca leadership encouraged the worship of Inti, the sun god and imposed its sovereignty above other cults such as that of Pachamama. The Incas considered their King, the Sapa Inca, to be the "child of the sun."
Atahualpa, the last Sapa Inca became emperor when he defeated and executed his older half-brother Huascar in a civil war sparked by the death of their father, Inca Huayna Capac. In December 1532, a party of conquistadors led by Francisco Pizarro defeated and captured the Inca Emperor Atahualpa in the Battle of Cajamarca. The Spanish conquest of the Inca Empire was one of the most important campaigns in the Spanish colonization of the Americas. After years of preliminary exploration and military conflicts, it was the first step in a long campaign that took decades of fighting but ended in Spanish victory and colonization of the region known as the Viceroyalty of Peru with its capital at Lima, which became known as "The City of Kings". The conquest of the Inca Empire led to spin-off campaigns throughout the viceroyalty as well as expeditions towards the Amazon Basin as in the case of Spanish efforts to quell Amerindian resistance. The last Inca resistance was suppressed when the Spaniards annihilated the Neo-Inca State in Vilcabamba in 1572.
The indigenous population dramatically collapsed due to exploitation, socioeconomic change and epidemic diseases introduced by the Spanish. Exploitation and socioeconomic change also contributed to the collapse. Viceroy Francisco de Toledo reorganized the country in the 1570s with gold and silver mining as its main economic activity and Amerindian forced labor as its primary workforce. With the discovery of the great silver and gold lodes at Potosí (present-day Bolivia) and Huancavelica, the viceroyalty flourished as an important provider of mineral resources. Peruvian bullion provided revenue for the Spanish Crown and fueled a complex trade network that extended as far as Europe and the Philippines. Because of lack of available work force, African slaves were added to the labor population. The expansion of a colonial administrative apparatus and bureaucracy paralleled the economic reorganization. With the conquest started the spread of Christianity in South America; most people were forcefully converted to Catholicism, taking only a generation to convert the population. They built churches in every city and replaced some of the Inca temples with churches, such as the Coricancha in the city of Cusco. The church employed the Inquisition, making use of torture to ensure that newly converted Catholics did not stray to other religions or beliefs. Peruvian Catholicism follows the syncretism found in many Latin American countries, in which religious native rituals have been integrated with Christian celebrations. In this endeavor, the church came to play an important role in the acculturation of the natives, drawing them into the cultural orbit of the Spanish settlers.
By the 18th century, declining silver production and economic diversification greatly diminished royal income. In response, the Crown enacted the Bourbon Reforms, a series of edicts that increased taxes and partitioned the Viceroyalty. The new laws provoked Túpac Amaru II's rebellion and other revolts, all of which were suppressed. As a result of these and other changes, the Spaniards and their creole successors came to monopolize control over the land, seizing many of the best lands abandoned by the massive native depopulation. However, the Spanish did not resist the Portuguese expansion of Brazil across the meridian. The Treaty of Tordesillas was rendered meaningless between 1580 and 1640 while Spain controlled Portugal. The need to ease communication and trade with Spain led to the split of the viceroyalty and the creation of new viceroyalties of New Granada and Rio de la Plata at the expense of the territories that formed the viceroyalty of Peru; this reduced the power, prominence and importance of Lima as the viceroyal capital and shifted the lucrative Andean trade to Buenos Aires and Bogotá, while the fall of the mining and textile production accelerated the progressive decay of the Viceroyalty of Peru.
Eventually, the viceroyalty would dissolve, as with much of the Spanish empire, when challenged by national independence movements at the beginning of the nineteenth century. These movements led to the formation of the majority of modern-day countries of South America in the territories that at one point or another had constituted the Viceroyalty of Peru. The conquest and colony brought a mix of cultures and ethnicities that did not exist before the Spanish conquered the Peruvian territory. Even though many of the Inca traditions were lost or diluted, new customs, traditions and knowledge were added, creating a rich mixed Peruvian culture.
In the early 19th century, while most of South America was swept by wars of independence, Peru remained a royalist stronghold. As the elite vacillated between emancipation and loyalty to the Spanish Monarchy, independence was achieved only after the occupation by military campaigns of José de San Martín and Simón Bolívar.
The economic crises, the loss of power of Spain in Europe, the war of independence in North America and native uprisings all contributed to a favorable climate to the development of emancipating ideas among the criollo population in South America. However, the criollo oligarchy in Peru enjoyed privileges and remained loyal to the Spanish Crown. The liberation movement started in Argentina where autonomous juntas were created as a result of the loss of authority of the Spanish government over its colonies.
After fighting for the independence of the Viceroyalty of Rio de la Plata, José de San Martín created the Army of the Andes and crossed the Andes in 21 days, a great accomplishment in military history. Once in Chile he joined forces with Chilean army General Bernardo O’Higgins and liberated the country in the battles of Chacabuco and Maipú in 1818. On 7 September 1820, a fleet of eight warships arrived in the port of Paracas under the command of general Jose de San Martin and Thomas Cochrane, who was serving in the Chilean Navy. Immediately on 26 October they took control of the town of Pisco. San Martin settled in Huacho on 12 November, where he established his headquarters while Cochrane sailed north blockading the port of Callao in Lima. At the same time in the north, Guayaquil was occupied by rebel forces under the command of Gregorio Escobedo. Because Peru was the stronghold of the Spanish government in South America, San Martin’s strategy to liberate Peru was to use diplomacy. He sent representatives to Lima urging the Viceroy that Peru be granted independence, however all negotiations proved unsuccessful.
The Viceroy of Peru, Joaquin de la Pazuela named Jose de la Serna commander-in-chief of the loyalist army to protect Lima from the threatened invasion of San Martin. On 29 January, de la Serna organized a coup against de la Pazuela which was recognized by Spain and he was named Viceroy of Peru. This internal power struggle contributed to the success of the liberating army. In order to avoid a military confrontation San Martin met the newly appointed viceroy, Jose de la Serna, and proposed to create a constitutional monarchy, a proposal that was turned down. De la Serna abandoned the city and on 12 July 1821 San Martin occupied Lima and declared Peruvian independence on 28 July 1821. He created the first Peruvian flag. Alto Peru (Bolivia) remained as a Spanish stronghold until the army of Simón Bolívar liberated it three years later. Jose de San Martin was declared Protector of Peru. Peruvian national identity was forged during this period, as Bolivarian projects for a Latin American Confederation floundered and a union with Bolivia proved ephemeral.
Simon Bolivar launched his campaign from the north liberating the Viceroyalty of New Granada in the Battles of Carabobo in 1821 and Pichincha a year later. In July 1822 Bolivar and San Martin gathered in the Guayaquil Conference. Bolivar was left in charge of fully liberating Peru while San Martin retired from politics after the first parliament was assembled. The newly founded Peruvian Congress named Bolivar dictator of Peru giving him the power to organize the military.
With the help of Antonio José de Sucre they defeated the larger Spanish army in the Battle of Junín on 6 August 1824 and the decisive Battle of Ayacucho on 9 December of the same year, consolidating the independence of Peru and Alto Peru. Alto Peru was later established as Bolivia. During the early years of the Republic, endemic struggles for power between military leaders caused political instability.
From the 1840s to the 1860s, Peru enjoyed a period of stability under the presidency of Ramón Castilla, through increased state revenues from guano exports. However, by the 1870s, these resources had been depleted, the country was heavily indebted, and political in-fighting was again on the rise. Peru embarked on a railroad-building program that helped but also bankrupted the country. In 1879, Peru entered the War of the Pacific which lasted until 1884. Bolivia invoked its alliance with Peru against Chile. The Peruvian Government tried to mediate the dispute by sending a diplomatic team to negotiate with the Chilean government, but the committee concluded that war was inevitable. Chile declared war on 5 April 1879. Almost five years of war ended with the loss of the department of Tarapacá and the provinces of Tacna and Arica, in the Atacama region. Two outstanding military leaders throughout the war were Francisco Bolognesi and Miguel Grau. Originally Chile committed to a referendum for the cities of Arica and Tacna to be held years later, in order to self determine their national affiliation. However, Chile refused to apply the Treaty, and neither of the countries could determine the statutory framework. After the War of the Pacific, an extraordinary effort of rebuilding began. The government started to initiate a number of social and economic reforms in order to recover from the damage of the war. Political stability was achieved only in the early 1900s.
Internal struggles after the war were followed by a period of stability under the Civilista Party, which lasted until the onset of the authoritarian regime of Augusto B. Leguía. The Great Depression caused the downfall of Leguía, renewed political turmoil, and the emergence of the American Popular Revolutionary Alliance (APRA). The rivalry between this organization and a coalition of the elite and the military defined Peruvian politics for the following three decades. A final peace treaty in 1929, signed between Peru and Chile called the Treaty of Lima, returned Tacna to Peru. Between 1932 and 1933, Peru was engulfed in a year-long war with Colombia over a territorial dispute involving the Amazonas department and its capital Leticia. Later, in 1941, Peru became involved in the Ecuadorian-Peruvian War, after which the Rio Protocol sought to formalize the boundary between those two countries. In a military coup on 29 October 1948, Gen. Manuel A. Odria became president. Odría's presidency was known as the Ochenio. Momentarily pleasing the oligarchy and all others on the right, but followed a populist course that won him great favor with the poor and lower classes. A thriving economy allowed him to indulge in expensive but crowd-pleasing social policies. At the same time, however, civil rights were severely restricted and corruption was rampant throughout his régime. Odría was succeeded by Manuel Prado Ugarteche. However, widespread allegations of fraud prompted the Peruvian military to depose Prado and install a military junta, led by Ricardo Pérez Godoy. Godoy ran a short transitional government and held new elections in 1963, which were won by Fernando Belaúnde Terry who assumed presidency until 1968. Belaúnde was recognized for his commitment to the democratic process. In 1968, the Armed Forces, led by General Juan Velasco Alvarado, staged a coup against Belaúnde. Alvarado's regime undertook radical reforms aimed at fostering development, but failed to gain widespread support. In 1975, General Francisco Morales Bermúdez forcefully replaced Velasco, paralyzed reforms, and oversaw the reestablishment of democracy.
Peru engaged in a brief successful conflict with Ecuador in the Paquisha War as a result of territorial dispute between the two countries. After the country experienced chronic inflation, the Peruvian currency, the sol, was replaced by the Inti in mid-1985, which itself was replaced by the nuevo sol in July 1991, at which time the new sol had a cumulative value of one billion old soles. The per capita annual income of Peruvians fell to $720 (below the level of 1960) and Peru's GDP dropped 20% at which national reserves were a negative $900 million. The economic turbulence of the time acerbated social tensions in Peru and partly contributed to the rise of violent rebel rural insurgent movements, like Sendero Luminoso (Shining Path) and MRTA, which caused great havoc throughout the country. Concerned about the economy, the increasing terrorist threat from Sendero Luminoso and MRTA, and allegations of official corruption, Alberto Fujimori assumed presidency in 1990. Fujimori implemented drastic measures that caused inflation to drop from 7,650% in 1990 to 139% in 1991. Faced with opposition to his reform efforts, Fujimori dissolved Congress in the auto-golpe ("self-coup") of 5 April 1992. He then revised the constitution; called new congressional elections; and implemented substantial economic reform, including privatization of numerous state-owned companies, creation of an investment-friendly climate, and sound management of the economy. Fujimori's administration was dogged by insurgent groups, most notably the Sendero Luminoso, who carried out terrorist campaigns across the country throughout the 1980s and 1990s. Fujimori cracked down on the insurgents and was successful in largely quelling them by the late 1990s, but the fight was marred by atrocities committed by both the Peruvian security forces and the insurgents: the Barrios Altos massacre and La Cantuta massacre by Government paramilitary groups, and the bombings of Tarata and Frecuencia Latina by Sendero Luminoso. Those incidents subsequently came to symbolize the human rights violations committed in the last years of violence.
During early 1995, once again Peru and Ecuador clashed in the Cenepa War, but in 1998 the governments of both nations signed a peace treaty that clearly demarcated the international boundary between them. In November 2000, Fujimori resigned from office and went into a self-imposed exile, avoiding prosecution for human rights violations and corruption charges by the new Peruvian authorities. Since the end of the Fujimori regime, Peru has tried to fight corruption while sustaining economic growth. In spite of human rights progress since the time of insurgency, many problems are still visible and show the continued marginalization of those who suffered through the violence of the Peruvian conflict.
A caretaker government presided over by Valentín Paniagua took on the responsibility of conducting new presidential and congressional elections. Afterwards Alejandro Toledo became president in 2001 to 2006.
On 28 July 2006 former president Alan García became President of Peru after winning the 2006 elections. In May 2008, Peru became a member of the Union of South American Nations.
On 5 June 2011, Ollanta Humala was elected President. During his presidency, Prime Minister Ana Jara and her cabinet were successfully censored, which was the first time in 50 years that a cabinet had been forced to resign from the Peruvian legislature.
Peru is a unitary semi-presidential representative democratic republic with a multi-party system. Under the current constitution, the President is both head of state and government; he or she is elected for five years and cannot serve consecutive terms. The President designates the Prime Minister and, on his or her advice, the rest of the Council of Ministers. The Congress of the Republic is unicameral with 130 members elected for five-year terms. Bills may be proposed by either the executive or the legislative branch; they become law after being passed by Congress and promulgated by the President. The judiciary is nominally independent, though political intervention into judicial matters has been common throughout history and arguably continues in modern day.
The Peruvian government is directly elected, and voting is compulsory for all citizens aged 18 to 70. Congress is currently composed of Fuerza Popular (72 seats), Peruanos Por el Kambio (17 seats), Frente Amplio (20 seats), Alianza para el Progreso (9 seats), Acción Popular (5 seats) and APRA (5 seats).
Peruvian foreign relations have historically been dominated by border conflicts with neighboring countries, most of which were settled during the 20th century. Recently, Peru disputed its maritime limits with Chile in the Pacific Ocean. Peru is an active member of several regional blocs and one of the founders of the Andean Community of Nations. It is also a participant in international organizations such as the Organization of American States and the United Nations. Javier Pérez de Cuéllar served as UN Secretary General from 1981 to 1991. Former President Fujimori’s tainted re-election to a third term in June 2000 strained Peru's relations with the United States and with many Latin American and European countries, but relations improved with the installation of an interim government in November 2000 and the inauguration of Alejandro Toledo in July 2001 after free and fair elections.
Peru is planning full integration into the Andean Free Trade Area. In addition, Peru is a standing member of APEC and the World Trade Organization, and is an active participant in negotiations toward a Free Trade Area of the Americas (FTAA).
The Peruvian Armed Forces are the military services of Peru, comprising independent Army, Navy and Air Force components. Their primary mission is to safeguard the independence, sovereignty and territorial integrity of the country. As a secondary mission they participate in economic and social development as well as in civil defense tasks. Conscription was abolished in 1999 and replaced by voluntary military service. The armed forces are subordinate to the Ministry of Defense and to the President as Commander-in-Chief.
The National Police of Peru is often classified as a part of the armed forces. Although in fact it has a different organization and a wholly civil mission, its training and activities over more than two decades as an anti-terrorist force have produced markedly military characteristics, giving it the appearance of a virtual fourth military service with significant land, sea and air capabilities and approximately 140,000 personnel. The Peruvian armed forces report through the Ministry of Defense, while the National Police of Peru reports through the Ministry of Interior.
Peru is divided into 25 regions and the province of Lima. Each region has an elected government composed of a president and council that serve four-year terms. These governments plan regional development, execute public investment projects, promote economic activities, and manage public property. The province of Lima is administered by a city council. The goal of devolving power to regional and municipal governments was among others to improve popular participation. NGOs played an important role in the decentralization process and still influence local politics.
Several metropolitan areas are defined for Peru - these overlap the district areas, and have limited authority. The largest of them, the Lima Metropolitan Area, is the seventh largest metropolis in the Americas.
Peru covers 1,285,216 km2 (496,225 sq mi) of western South America. It borders Ecuador and Colombia to the north, Brazil to the east, Bolivia to the southeast, Chile to the south, and the Pacific Ocean to the west. The Andes mountains run parallel to the Pacific Ocean; they define the three regions traditionally used to describe the country geographically. The costa (coast), to the west, is a narrow plain, largely arid except for valleys created by seasonal rivers. The sierra (highlands) is the region of the Andes; it includes the Altiplano plateau as well as the highest peak of the country, the 6,768 m (22,205 ft) Huascarán. The third region is the selva (jungle), a wide expanse of flat terrain covered by the Amazon rainforest that extends east. Almost 60 percent of the country's area is located within this region.
Most Peruvian rivers originate in the peaks of the Andes and drain into one of three basins. Those that drain toward the Pacific Ocean are steep and short, flowing only intermittently. Tributaries of the Amazon River have a much larger flow, and are longer and less steep once they exit the sierra. Rivers that drain into Lake Titicaca are generally short and have a large flow. Peru's longest rivers are the Ucayali, the Marañón, the Putumayo, the Yavarí, the Huallaga, the Urubamba, the Mantaro, and the Amazon.
The largest lake in Peru, Lake Titicaca between Peru and Bolivia high in the Andes, is also the largest of South America. The largest reservoirs, all in the coastal region of Peru, are the Poechos, Tinajones, San Lorenzo, and El Fraile reservoirs.
The combination of tropical latitude, mountain ranges, topography variations, and two ocean currents (Humboldt and El Niño) gives Peru a large diversity of climates. The coastal region has moderate temperatures, low precipitations, and high humidity, except for its warmer, wetter northern reaches. In the mountain region, rain is frequent in summer, and temperature and humidity diminish with altitude up to the frozen peaks of the Andes. The Peruvian Amazon is characterized by heavy rainfall and high temperatures, except for its southernmost part, which has cold winters and seasonal rainfall.
Because of its varied geography and climate, Peru has a high biodiversity with 21,462 species of plants and animals reported as of 2003, 5,855 of them endemic. Peru has over 1,800 species of birds (120 endemic), and 500 species of mammals and over 300 species of reptiles. The hundreds of mammals include rare species like the puma, jaguar and spectacled bear. The Birds of Peru produce large amounts of guano, an economically important export. The Pacific holds large quantities of sea bass, flounder, anchovies, tuna, crustaceans, and shellfish, and is home to many sharks, sperm whales, and whales.
Peru also has an equally diverse flora. The coastal deserts produce little more than cacti, apart from hilly fog oases and river valleys that contain unique plant life. The Highlands above the tree-line known as puna is home to bushes, cactus, drought-resistant plants such as ichu, and the largest species of bromeliad - the spectacular Puya raimondii.
The cloud-forest slopes of the Andes sustain moss, orchids, and bromeliads, and the Amazon rainforest is known for its variety of trees and canopy plants.
The economy of Peru is classified as upper middle income by the World Bank and is the 39th largest in the world. Peru is, as of 2011, one of the world's fastest-growing economies owing to the economic boom experienced during the 2000s. It has a high Human Development Index of.752 based on 2011 data. Historically, the country's economic performance has been tied to exports, which provide hard currency to finance imports and external debt payments. Although they have provided substantial revenue, self-sustained growth and a more egalitarian distribution of income have proven elusive. According to 2010 data, 31.3% of its total population is poor, including 9.8% that lives in extreme poverty. Inflation in 2012 was the lowest in Latin America at only 1.8%, but increased in 2013 as oil and commodity prices rose; as of 2014 it stands at 2.5%. The unemployment rate has fallen steadily in recent years, and as of 2012 stands at 3.6%.
Peruvian economic policy has varied widely over the past decades. The 1968–1975 government of Juan Velasco Alvarado introduced radical reforms, which included agrarian reform, the expropriation of foreign companies, the introduction of an economic planning system, and the creation of a large state-owned sector. These measures failed to achieve their objectives of income redistribution and the end of economic dependence on developed nations.
Despite these results, most reforms were not reversed until the 1990s, when the liberalizing government of Alberto Fujimori ended price controls, protectionism, restrictions on foreign direct investment, and most state ownership of companies. Reforms have permitted sustained economic growth since 1993, except for a slump after the 1997 Asian financial crisis.
Services account for 53% of Peruvian gross domestic product, followed by manufacturing (22.3%), extractive industries (15%), and taxes (9.7%). Recent economic growth has been fueled by macroeconomic stability, improved terms of trade, and rising investment and consumption. Trade is expected to increase further after the implementation of a free trade agreement with the United States signed on 12 April 2006. Peru's main exports are copper, gold, zinc, textiles, and fish meal; its major trade partners are the United States, China, Brazil, and Chile.
The water and sanitation sector in Peru has made important advances in the last two decades, including the increase of water coverage from 30% to 85% between 1980 and 2010. Sanitation coverage has also increased from 9% to 37% from 1985 to 2010 in rural areas. Advances have also been achieved concerning the disinfection of drinking water and in sewage treatment. Nevertheless, many challenges remain, such as: