Francisco Morales-Bermúdez Cerruti

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Francisco Morales-Bermúdez Cerruti

Francisco Morales-Bermúdez Cerruti (born 1921) was president of Peru during the second half of the "Military Revolution" (1968-1980). He dramatically slowed the pace of reform, later returning the country to civilian rule.

Francisco Morales-Bermúdez Cerruti was born in Lima on October 4, 1921. His grandfather, Gen. Remigio Morales Bermúdez, was president of Peru from 1890 to 1894, while his father, Segundo Regimio Morales Bermúdez, was a career military officer who was assassinated by political extremists in 1939.

Morales-Bermúdez finished his secondary education in the Jesuit Colegio de La Inmaculada in Lima. In 1939 he entered the Chorrillos Military Academy and graduated in 1943 as a second lieutenant in the Engineering Corps, thereby beginning a long and distinguished career in the Peruvian army.

In 1961 he was promoted to lieutenant colonel, and during the short-lived military government of 1962-1963 he was charged with preparing for new elections, which were held in 1963. Over the next five years Morales-Bermúdez emerged as the foremost economist in the army. He taught courses at the superior War College and at the Army School of Engineering in Lima, as well as at the War College in Argentina, and served concurrently as director of the Office of Army Economics and as the official delegate of the Joint Chiefs of Staff on the board of directors of the Mantaro Corporation.

Promoted to colonel in 1967, Morales-Bermúdez attended the prestigious and selective Center for High Military Studies (CAEM), which since its founding in 1950 had emphasized socio-economic, political, and developmental themes—that is, the role of the military in the process of modernization—instead of purely military topics. It was at CAEM that Morales-Bermúdez prepared himself for national leadership.

He was promoted to brigadier general in 1968 and, while still on active duty, assumed the portfolio of minister of finance and commerce in the civilian government of Fernando Belaúnde Terry (1963-1968). Following the military coup d'etat of October 1968, Morales-Bermúdez was named minister of economy and finances in the "Revolutionary Government of the Armed Forces" and quickly undertook a thorough reorganization of the ministry and of the national economy. He succeeded in refinancing Peru's foreign debt, introduced sweeping reforms in the nation's tax structure, and stabilized the Peruvian currency, the sol.

Between 1969 and 1975 Morales-Bermúdez played a key role in the military government's efforts to restructure Peruvian society. The government nationalized the fish-meal industry; most mining and metal refining; petroleum exploration, marketing, and refining; the railroads; telephone and telegraph companies; the national airline; 51 percent of all television channels; 25 percent of the radio stations; a majority of the banks and insurance companies; and all exports of cotton, sugar, tobacco, and minerals. Moreover, it implemented one of the most far-reaching land reform laws in Latin American history; approved the Industrial Reform Law, which gave workers partial ownership of their companies; and, in general, increased the state's share of the economy from 11 to 26 percent.

Promoted to major general in 1973, Morales-Bermúdez was named prime minister and minister of war in 1975 and became president of Peru in August of that year following the coup d'etat against Juan Velasco Alvarado. His primary tasks as president were to rebuild the badly deteriorated economy and to pave the way for a return to constitutional democracy. The first proved by far the most difficult.

A combination of poor planning, bad administration, natural disasters such as droughts and flooding, and exaggerated promises, particularly in the agrarian sector, had resulted in economic chaos. The rate of inflation rose from 17 percent in 1974 to an alarming 74 percent by 1978. The Peruvian sol was devalued from 55 to the dollar in 1976 to 289 by 1980, and the real income of Lima's urban masses fell over 50 percent in that same period. Concomitantly, the foreign indebtedness of the nation increased at a staggering rate.

Forced to accept the draconian austerity and stabilization measures of the International Monetary Fund (IMF), Morales-Bermúdez demonstrably slowed the pace of reform and even moved to reverse the Industrial Reform Law and to divest the state of certain industries. This was the so-called "Second Phase" (Segundo Fase) of the "Military Revolution," a period which bore the personal stamp of Morales-Bermúdez even more than the "First Phase" had borne that of Velasco Alvarado.

Politically, Morales-Bermúdez enjoyed greater success. Although he imposed a state of emergency in 1976-1977, he later relaxed press censorship, allowed previously banned magazines to reappear, and held elections in 1978 for a constituent assembly which wrote a new constitution incorporating many of the reforms and changes implemented during the military regime. In 1980 general elections were held, and the man whom the military had overthrown 12 years earlier, Fernando Belaúnde Terry, emerged victorious. Nevertheless, on July 28, 1980, Morales-Bermúdez fulfilled his promise and handed over power to the new president, thereby ending the longest period of military rule in 20th-century Peru and certainly one of the most unique regimes in Latin American history.

Upon retiring from office and active military service, Morales-Bermúdez dedicated himself to writing, lecturing, and politics. In 1985 he formed a new political party, El Frente (The Front), and ran for president. He finished a poor fifth in a field of eight, a clear indication of the degree to which the Peruvian people blamed him personally for the severe economic measures of his presidency and for the subsequent collapse of the Peruvian economy in the early 1980s. He subsequently avoided public appearances.