The coup leaders named their administration the
Revolutionary Government of the Armed Forces, with Velasco at its helm as President. Velasco's administration articulated a desire to give justice to the poor through a regime of nationalization known as
Peruanismo. Velasco's rule was characterized by broadly social democratic, developmentalist, and independent nationalist policies, which aimed to create a strong national industry to increase the international independence of Peru. To that end, he nationalised entire industries, expropriated companies in a wide range of activities from fisheries to mining to telecommunications to power production and consolidated them into single industry-centric government-run entities, and increased government control over economic activity by enforcing those entities as monopolies and disincentivized private activity in those sectors. Most reforms were planned by leftist intellectuals of the time. A root and branch education reform was implemented, seeking to promote inclusivity among all Peruvians and move them towards to a new national way of thinking and feeling; the poor and the most excluded were prioritized in this system. The
Día del Indio or ''Peruvian Indian's day
became Día del Campesino
or Peruvian Peasant's day.'' This holiday fell on June 24, a traditional holiday of the land, since it was the day of winter
solstice. The education reform of 1972 provided for
bilingual education for the
indigenous people of the Andes and the Amazon, which consisted nearly half of the population. In 1975, the Velasco government enacted a law making
Quechua an official language of Peru equal to Spanish. However, this law was never enforced and ceased to be valid when the
1979 constitution became effective, according to which Quechua and
Aymara are official only where they predominate, as mandated by law – a law that was never enacted. A cornerstone of Velasco's political and economic strategy was the implementation by dictate of an
agrarian reform program to expropriate farms and diversify land ownership. In its first ten years in power, the Revolutionary Government expropriated 15,000 properties (totaling nine million hectares) and benefited some 300,000 families.
Peru's agrarian reform under Velasco was the second-largest
Land reform in Latin American history, after Cuba. The former landlords who opposed this program believed that they did not receive adequate compensation for their confiscated assets and lamented that the state officials and peasant beneficiaries mismanaged their properties after the expropriation. The owners who opposed his program also claimed that the expropriation was more akin to confiscation, as they were paid in
agrarian reform bonds, a
sovereign debt obligation of which the government defaulted payment due to the
hyperinflationary period that affected
Peru's economy in the late 1980s, leaving the current value of the bonds up for debate and resulting in a decade-long lawsuit against the Peruvian government. The deposed Belaúnde administration had attempted to implement a milder agrarian reform program, but it was defeated in Congress by the APRA-UNO coalition with support of the major
landowners. Within this framework, the Velasco administration engaged in a program of
import substitution industrialization, imposing tight foreign exchange and trade controls. The success of the Velasco administration's economic policies is still debated today. As the Peruvian military government ran deeper into debt, it was forced to devalue the currency and run inflationary policies. This however, was in part due to the
1970s energy crisis, which also affected Peru and made it impossible for the Velasco administration to fund some of its most ambitious reforms. Economic growth under the administration was steady if unremarkable - real per capita GDP (constant 2000 US$) increased 3.2% per year from 1968 to 1975. In 1971, Velasco described the economic policy as one aimed at overcoming capitalism in Peru, stating that In a 1975 speech Velasco described his revolution as one that rejected both capitalism and communism, stating that ==Foreign and military policies==