The Other Path

The Shining Path, Peru's Maoist terrorist group, first bombed the headquarters of the Institute of Liberty and Democracy in April 1991. Hernando de Soto, the institute's president and an internationally reknowned economist rumored to be at the top of the Shining Path hit list, had left the premises just minutes earlier. (See "What's Wrong with Latin American Economies?", October 1989.) Last July the Senderistas came back for a second try.

On Monday, July 20, some 30 armed Shining Path terrorists stormed the institute's headquarters in the quiet Miraflores suburb of Lima. A fight with the security guards outside gave the institute staff time to hit the floor before the explosions began. When the smoke and dust settled, three people were dead and at least 20 wounded. But the Senderistas missed de Soto again.

Why does this Peruvian-born economist so threaten the Shining Path?

For all the Senderistas' terror, the 10,000-member group offers a haven of predictability and relative safety for Peruvian peasants otherwise caught between corrupt officials, wealthy drug kings, and the entrenched mercantilist class. De Soto's plans for establishing the rule of law and securing property rights for peasants threaten to weaken the terrorists' hold on the discontented and frightened masses—and to undermine the coca traders on whom the Senderistas depend for much of their money by encouraging coca farmers to switch to other crops.

Although the Shining Path complains that the institute's efforts are "distancing young people from participating in the popular war," suggesting that this second bombing won't be the last, de Soto is undaunted. "We will continue the fight, using democracy as our only weapon," he declares.