Abstract

"Political risk and financial strain: Peruvian Entrepreneurs and challenge of the external debt Crisis, 1977-1990"

Martin Monsalve, Universidad del Pacífico (monsalve_ma@up.edu.pe)

The Peruvian economy had managed to maintain a relatively stable growth between 1960 and 1975. From that moment on, due to oil shocks and the external debt crisis, the Peruvian economy suffered several falls, the most dramatic being that of 1987-1990. The recovery process was extremely slow, only in the year 2005 that the GDP of 1975 was recovered. At the same time, the country went through a series of political crises, the most serious being the appearance of the Maoist terrorist group, Sendero Luminoso. In this double context of economic and political crisis, what were the organization strategies of the companies? How did they respond from a managerial point of view to the double challenge of inflation and violence? How did they deal with the financial crisis caused by the foreign debt and how did they deal with the adjustment and liberalization policies that followed? This work argues that the prolonged period of the Peruvian crisis created a type of reactive management that stimulated short-term investments, and the control of the financial sector by economic groups to facilitate internal transfers, but that at the same time stimulated the political activity of the managers in daily interactions with representatives of the Peruvian State