The New Bourgeoisie and the Limits of Dependency: Mining, Class, and Power in Revolutionary Peru [Course Book ed.] 9781400853236

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The New Bourgeoisie and the Limits of Dependency

The New Bourgeoisie and the Limits of Dependency: Mining, Class, and Power in "Revolutionary" Peru

David G. Becker

Princeton University Press · Princeton, New Jersey

Copyright © 1983 by Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, Guildford, Surrey ALL RIGHTS RESERVED Library of Congress Cataloging in Publication Data will be found on the last printed page of this book This book lias been composed in Linotron Times Roman CIothboundl editions of Princeton University Press books are printed on acid-free paper, and binding materials are chosen for strength and durability. Paperbacks, while satisfactory for personal collections, are not usually suitable for library rebinding Printed in the United States of America by Princeton tlniversity Press, Princeton, New Jersey

For

Dad, Mother, Dan, and Paul David Ball6n and Victoria

Contents

List of Tables List of Figures Glossary of Acronyms Foreword, by Richard L. Sklar Preface

ix xi xiii xvii xxi

PART I: Introduction 1. 2. 3. 4.

Development, Class, and Dependency Peru: Un Pais Minero Mining Policy and Policymaking after 1968 World Industries and World Markets in Nonferrous Metals

PART II: Mining Transnationals and the Peruvian State 5. Southern Peru Copper versus an Assertive State: The Cuajone Project 6. The Decline and Fall of Cerro de Pasco

3 17 49 72

95 97 132

PART III: Institutional Foundations of the Peruvian Mining

Bourgeoisie

169

7. The Medium-Mining Subsector 8. Parastatal Enterprise in Peruvian Mining

171 201

PART IV: Mining and Development: A Class Analysis

235

9. The Bourgeoisie and Middle Class of the Mineria 10. The Mining Industry and the Claims of Labor

237 279

Conclusions 11. The New Bourgeoisie and the Limits of Dependency

323

Appendices A. Miscellaneous Data B. Mining Policy Guidelines and Legislation of the Military Regime C. A Comparison of Key Provisions of the Toquepala and Cuajone Basic Agreements D. Statutory Rights and Privileges of Peruvian Mine Workers

345

361 365

Bibliography Index

371 409

354

List of Tables

2.1 Indicators of Development for Peru 2.2 Peruvian Exports by Product, 1960 and 1980 2.3 Peruvian Exports and Imports by Destination or Source, 1962 and 1980 2.4 Southern Peru Copper: Net Earnings and Contributions to Owners' Consolidated After-Tax Profits, 1960-1969 3.1 Southern Peru Copper Corporation: Financial Performance, 19561970 5.1 Members of the Chase Manhattan Banking Consortium for Cuajone, with Their Contributions 5.2 Cuajone Long-Term Copper Sales: Final Contractual Disposition 5.3 Financing of the Cuajone Project: Final Summary of Funding Sources and Recuperable Investment 5.4 Southern Peru Copper: Proportion of Sales Income Spent in Peru, 1971-1980 5.5 Southern Peru Copper: Earnings Statements for Toquepala and Cuajone, 1977-1980 6.1 Cerro's Production of Refined Metals in Peru, 1950-1968 6.2 Financial Performance of Cerro's Peruvian Mining and Refining Operations, 1950-1968 6.3 Comparison of Centromin's Financial Performance, 1974-1980, with TTiat of Cerro's Peruvian Mining and Refining Operations, 1969-1973 6.4 Centromin's Production of Major Refined Metals, 1974-1981 6.5 Comparative Size Measures for Cerro and Certain Other Major Corporations in 1973 7.1 Gross Value of Production, Economic Rent, and Fixed Assets of the Peruvian Mediana Mineria, 1967-1979 7.2 The Companies of the Peruvian Mediana Mineria, with Financial Indicators for 1979 7.3 Directorial Interlocks between the Mediana Mineria and Other Sectors of the Peruvian Economy 7.4 Ratio of Long-Term Debt to Shareholder Equity for the Mediana Mineria and Selected Subdivisions, 1967-1979 7.5 Returns on Invested Capital for the Mediana Mineria and Selected Subdivisions, 1967-1979 9.1 Earnings of Selected Groups Employed in the Peruvian Mineria 9.2 Mining Society Membership, 1950-1980

18 23 24 38 54 115 121 124 126 129 144 144

156 157 162 173 177 188 195 196 244 259

χ · Tables

9.3 Opinions of Mediana Mineria Managers and Staff Respecting Aspects of Government Mining Policy in the 1968-1974 Period 9.4 Opinions of Mediana Mineria Managers and Staff Respecting Issues of Class Interest 10.1 Evolution of Employment in Peruvian Mining, 1967-1979 10.2 Strikes in Peru, 1967-1979 10.3 Indicators of Strike Intensity in Peru, 1967-1979 10.4 Strike Intensity Indicators by Enterprise, 1969-1979 A.l Average Annual Exchange Rate of the Peruvian Sol, 1950-1980 A.2 Peruvian Consumer Price Index, 1950-1980 A.3 Volume of Production of the Peruvian Mineria, 1950-1980: Major Nonferrous Metals A.4 Value of Production of the Peruvian Mineria, 1950-1980: Industry Total and Major Nonferrous Metals A.5 Gross Value of Peruvian Mine Production by Subsector, 19631980 A.6 International Price Quotations for Major Nonferrous Metals, 1950-1980 A.7 Major Western World Copper Mine Producers, 1977 A.8 Major Western World Primary Refined Copper Producers, 1977 B.l A Comparison of the Mining Policy Objectives of the Plan Inca (1974) and the Plan Tupac Amaru (1977) B.2 Principal Mining Legislation of the Military Regime

265 267 286 301 302 303 345 346 347 348 349 350 352 353 354 356

List of Figures

1. Outline map of Peru, showing the country's division into geographical regions and the locations of the principal mining centers. 20 2. Outline map of Peru, showing the country's political subdivisions, departmental capitals, and major population centers. 26 3. Diagram showing the ownership structure of the Peruvian gran mineria as of 1970. 42 4. U.S. Producers' (Domestic Refinery) and LME Settlement copper prices, 1950-1979. 83 5. Distribution of Southern Peru Copper's sales among the principal world copper markets, 1961-1977. 128 6. Economic indicators for the mediana mineria by corporate nationality, 1967-1979. 192 7. Combined GVP of the "big seven" Peruvian-owned-medium mining groups as a percentage of the GVP of all nationally owned firms of the mediana mineria. 194 8. Real wages (money wages deflated by the cost-of-living index) in the Peruvian mineria and in metropolitan Lima. 305 9. Ratio of empleado average salaiy to obrero average wage for Southern Peru Copper, Cerro-Centromin, and metropolitan Lima, 1967-1977. 306

Glossary of Acronyms

ADEX AMAX

APRA

BICC BID CADE CAEM

CGTP

CIPEC

CNT

COAP

COCOMI

AsociackSn de Exportadores: a trade association of Peruvian manufacturers who produce principally for export American Metal Climax Corporation, now formally known as AMAX: a major nonferrous metals transnational corpora­ tion Alianza Popular Revolucionaria Americana: a political party founded in Peru in 1924; once radical, it could now be de­ scribed as "centrist"; much of its support comes from the working and middle classes; it is institutionally linked to Acci