PERU is a country that takes pride in its past and worries about its future. For 200 years, the Inca empire, with its seat in the Peruvian highland city of Cuzco, held sway over a vast area stretching from modern-day Ecuador to northern Chile. It was a highly organized, militarily powerful civilization. Incan architectural monuments, such as the ``lost city'' of Machu Picchu, are considered some of the most brilliant achievements of pre-Columbian culture.
The arrival of a group of Spanish adventurers brought an end to Inca rule in 1531 . Mineral riches quickly made Peru the political and economic center of Spain's lucrative South American empire. Lima, founded by the Spaniards, became known as the ``City of Kings.''
But Spain left modern Peru with a mixed legacy. By superimposing Spanish traditions on the Indian way of life, Spanish rule created deep cultural divisions. Exploiting Peru for its mineral wealth and cheap Indian labor, the Spaniards laid the basis for future economic dependence.
In the 165 years since Peru gained its independence, a series of short-lived civilian governments and military dictatorships has struggled unsuccessfully to overcome the consequences of colonial rule.
Lingering divisions between Spanish-speaking whites of the Pacific coast and the Indians and mestizos of the Andes have frustrated political integration and the establishment of a single national identity. Experts say that these cultural divisions have fed the insurgency of the Shining Path, Peru's indigenous Marxist terrorist group, which since 1980, has been operating principally in the remote highland province of Ayacucho.
Dependence has left a legacy of poverty. Peru is the second-poorest country in South America, with a per capita income of $825 a year. Migration from the impoverished Andes has swollen Lima's population to 6 million (almost a third of the national total). Migrants have crowded into vast shantytowns that have become a breeding ground for disease, crime, and political violence.
As prices for its two main exports, copper and oil, decline, Peru is staggering under the weight of a $14 billion foreign debt. The austerity measures adopted to pay it have only exacerbated social unrest. Many Peruvians have turned to illegal cocaine production as the only alternative to poverty. Within the last six years, cocaine has become, by some estimates, the country's most profitable export.
But there is good news as well. In 1980, after 12 years of military rule, Peru inaugurated a democratically-elected government, joining a trend which, during the last five years, has brought civilian rule to every South American country except Paraguay, Chile, and Surinam.
Elections in 1985 brought the first back-to-back transfer of power between civilian governments in 40 years. The winner, 36-year-old Alan Garc'ia, has captured the imagination of Peruvians with his populist brand of nationalism and infectious self-confidence.
President Garc'ia has managed to infuse new hope, while making inroads on some of Peru's pressing political and economic problems. Inflation is down from 200 percent. In a controversial move that sent shock waves through the international financial community, Garc'ia attempted to relieve Peru's debt burden by unilaterally limiting payments to 10 percent of Peru's annual export earnigs.
New government programs have channeled development funds to rural areas. Garc'ia has announced plans to bring drinking water, health care, and jobs to Lima's slums.
The United States and Peru have collaborated on a series of recent raids, destroying dozens of clandestine laboratories and air strips built by drug smugglers in the Peruvian jungle. Peruvians will no longer be known as ``exporters of poison,'' says President Garc'ia.