Peru Economy

As a hurricane of inflation pounds Brazil's economy, wage earners, consumers and savers seek whatever flimsy shelter they can find: They ask the boss for mid-month advances, knowing that their salary will buy a lot less by payday; they stock up whenever possible on food staples and household supplies, whose prices leap frequently.

Listen to Peru's Great Debate. It echoes the heartbeat of a troubled Latin American democracy. The illustrious orators are President Alan Garcia, one of Latin America's most charismatic young leaders, and novelist Mario Vargas Llosa, one of its most famous literary lions. The burning issue is a government plan to nationalize private banks. It has aroused the conflicting passions of those Peruvians who want a "financial revolution" and others who fear the erosion of basic freedoms.

This nation's brash young president is a straightforward man. When Alan Garcia is happy, he sings. When he is angry, he fights. On a recent state visit to Mexico, Garcia shanghaied a passing mariachi band at a reception. Peruvians were quick to note that the song he enjoyed singing most was a wry ballad called "I Am the King." Back in Lima, Garcia encountered air force commander Luis Abram lobbying against creation of a unified defense ministry and in the process bad-mouthing his president.