EVEN when Lima's population was under a barrage of bomb attacks in July from hard-line Maoist guerrillas, opinion polls showed there was one problem that bothered Peruvians more than terrorism - the economy.
The preoccupation persists. But there is a conviction that the Nov. 22 election of a new constituent Congress will turn on the foreign-credit tap.
Just 48 hours after voting ended, Japan (Peru's prime source of external financial aid this year) released a $100 million credit that had been frozen since President Alberto Fujimori disbanded Congress in April. Along with $220 million from the Inter-American Development Bank in September, this was more good financial news for Peru.
But Western diplomats in Lima are warning against over-optimism. "There are various steps involved in a return to democracy," says Britain's ambassador to Peru, Keith Haskell.
The international community is not likely to be fully convinced of Mr. Fujimori's good intentions until the new Congress is installed, municipal elections are held on schedule next January, and the new constitution is written and approved.
"Some people don't understand what the niceties of politics have to do with the economy," says Jorge Gonzalez Izquierdo, dean of Lima's college of economists. "But only if we create real democracy here will we eliminate the obstacles to a fresh influx of resources from abroad."
And Peru badly needs international community help to dig itself out of its $22-billion debt crisis. Without renegotiation, Dr. Gonzalez estimates that Peru will have to shell out $1.8 billion in debt payments next year - "obviously impossible," he says, "for an economy whose total income from exports is less than twice that."
Peru has been earning good marks from multilateral organizations. Economic targets agreed to with the International Monetary Fund (IMF) for 1992 have been met and in some cases exceeded. By the end of the year Peru should be eligible for the IMF's "extended fund facility," which will enable arrears to be cleared and fresh credits granted. A similar arrangement exists with the World Bank.
But Peruvian debt negotiators have their work cut out in the next three months. They are due to meet their Paris Club group of creditors in February when some forgiveness of Peru's $6 billion government-to-government debt can be expected - although 1993 payments are still likely to be substantial.
Private creditor banks, to which Peru owes $7 billion (half in unpaid arrears), "will be the tough ones," predicts Gonzalez. "Banks just don't forgive debts like governments."
Most Peruvians, however, are waiting to see some measurable improvement in their standard of living. It has been two years since the "shock" economic adjustment of August 1990, when gasoline prices rose 30 times and staples six or seven times overnight.
The Fujimori administration can claim to have tamed, if not beaten, hyperinflation. Consumer prices were skyrocketing by almost 55 percent a month when Mr. Fujimori took office in July 1990 - now that is the annual rate.
"Peru has undergone a faster and more profound program of stabilization and structural reform than anywhere else in Latin America," says Roberto Abusada, independent consultant and former vice minister for the economy.
Under economy minister Carlos Bolona Behr, almost every aspect of economic activity has been deregulated, from urban transport to the movement of capital and the labor market. State-owned enterprises are being slimmed down and prepared for privatization.
The downside is recession which, economists say, always accompanies a severe stabilization program such as Peru's. Even so, this has been a particularly bad year. Gross domestic product has slumped around 3 percent, making 1992 the fifth year in the last six to register a GDP decline. Peruvians' per-capita income is back to 1960 levels.
The legal minimum wage, which is still what a substantial number of public-sector workers earn, has been pegged for most of the year at $45 a month. The basic "shopping basket" for a family of five is 10 times that.
Mr. Bolona is promising a better year ahead. Inflation for 1993 will be 30 percent and there will be some $500 million pumped into "social" programs - largely small-scale construction works that generate employment.
The Achilles' heel of Peru's economy, however, is still tax collection. Despite heroic efforts, the amount collected (equivalent to around 9 percent of GDP) is simply not enough to provide adequate health and education services and pay decent wages to government workers, police, and the armed forces.
"Until we solve the tax problem, betting on inflows of dollars from abroad won't help," says Gonzalez. "They can only supplement our internal efforts, not provide a substitute."