Back to the Future: Peru’s Shining Path and its Impact on Investment

“A journalist walks past a painting of Peru’s Shining Path guerrilla leader Abimael Guzman, who was captured in 1992, at a police museum in Lima, November 6, 2009” (Reuters/Mariana Bazo)


By:  Jon Vreede, Lynx Global Intelligence


If you were unaware that Shining Path was still operating in Peru, you could easily be forgiven. From 1980 until the late 1990s, the Communist Party of Peru in the Shining Path of José Carlos Mariátegui (to give them their proper name) was one of the most dangerous terrorist organizations in the Western Hemisphere. Driven by an ideology that drew heavily from Maoism, the group terrorized villagers in the rural Ayacucho and the Huallaga Valley regions, though their reach occasionally extended into Peru’s cities.

Peru’s Truth and Reconciliation Commission estimates that between 1980 and 200, Shining Path’s conflict with the Peruvian government killed approximately 69,000 people. But by the 21st century, with most of its top leaders killed or imprisoned, Shining Path appeared to be a spent force. Appearances however, can be deceiving. The continuing presence of Shining Path (SL) not only poses a risk to companies doing business in Peru, but represents a host of other risks these companies run when they do not account for the needs of the local community.

Despite frequent pronouncements about its imminent destruction, Shining Path is and still is very much alive. Although much of the information about the group is subject to conjecture. there are thought to be two main factions still fighting in remote parts of southern Peru: one in the Valleys of the of the Apurímac, Ene and Mantaro rivers (VRAEM) and the other in the Upper Huallaga Valley. Taking a page from their Colombian comrades, the FARC, both factions of SL survive by protecting or encouraging the cocaine trade in the regions they control. While there is continuing debate over the degree to which the two factions cooperate, they both nominally pledge fidelity to Shining Path’s imprisoned leadership, and neither should be taken lightly. Despite their close alliance with Peru’s narco-traffickers, Shining Path has not transformed into a mere drug cartel. They remain committed to their goal of overthrowing the Peruvian government, and continue to attack local and as well as national authorities.

As recently as April, 2016, SL guerillas attacked a military convoy carrying election materials to rural Peru[1]. They also engage in the sabotage of infrastructure projects near the regions they control, like the torching of three helicopters owned by an international gas consortium in 2012[2], or the kidnapping of local employees working for a Swedish construction firms that same year[3]. They also continue to kidnap Peruvians to join their movement and foreigners to hold for ransom. Nor is the Shining Path threat confined to military action. SL’s political arm, the Movement for Amnesty and Fundamental Rights (Movadef), is still active throughout Peru advocating for the release of Shining Path’s imprisoned leaders and organizing new supporters. For those companies seeking to do business in these parts of rural Peru, Shining Path still represents a risk to business, and their actions can endanger the safety of individuals and the security of projects.

While the danger from Shining Path may be limited to a handful of regions in Peru, the type of threat they represent is a risk to all companies working in the country. After all, people joined Shining Path in the 1970s and 1980s because they were unhappy with the status quo. They felt excluded from the prosperity that they saw other Peruvians enjoying and did not feel that local or national leaders were doing enough to eliminate this rising inequality. This sense of grievance was felt most acutely among the peasantry and the indigenous populations in rural areas, as well as young, educated people from these areas who felt their path was still being blocked despite their qualifications. These were just the sort of people Shining Path was looking to recruit with its Maoist-derived focus on rural uprising and enforced equality.

While SL may not be present in these regions anymore, that sense of grievance has not gone away. The new target of their anger is not only prosperous local officials, but the foreign companies that are perceived as the source of these official’s prosperity. If the residents of these communities believe that only a handful are benefiting from local development, they will respond; whether that action takes the form of scattered acts of sabotage or a coordinated campaign of violence. To avoid these dangerous and costly risks, those seeking to expand their business into Peru would be well-advised to engage with the communities they set up shop in.

While Shining Path continues to pose a danger to companies operating in certain parts of Peru, they also serve as a cautionary tale about danger businesses can face if they do not respect the needs and opinions of Peruvian communities. While businesses may be tempted to dismiss SL and their remaining fighters as a relic, the sentiment this group tapped into is very much alive throughout Peru. Operating a business with the support of a few local or national powerbrokers may work in the short-term, but in the long-run it will soon become more expensive. For business that operate this way will surely become a target of Shining Path or their next incarnation.