Second presidency of Alan García
The Peruvian presidential administration led by Alan García from 28 July 2006 to 28 July 2011.
Last updated August 26, 2026
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Overview
The second presidency of Alan García was the Peruvian national government headed by Alan García Pérez between 28 July 2006 and 28 July 2011. García, the leader of the Peruvian Aprista Party (APRA), returned to office after losing the 2001 presidential election to Alejandro Toledo. His second administration was shaped in large part by an effort to distance itself from the severe economic and political crisis associated with García's first presidency in the 1980s. By the time he took office, Peru had moved toward market-oriented economic policies under Alberto Fujimori and Alejandro Toledo, and García chose to preserve much of that framework rather than repeat the interventionist policies of his earlier term. The administration began with a cabinet that included APRA figures, independents and several experienced officials from the Toledo period. Jorge del Castillo became prime minister, Luis Carranza took charge of the Ministry of Economy and Finance, and José Antonio García Belaúnde became foreign minister. The cabinet included an unusually high number of women for Peru at the time. García also announced proposals for new government institutions, including a Ministry of Culture and a Ministry of Fishing, although not all such proposals became durable administrative structures. Economic performance was the administration's principal source of political strength. Peru recorded rapid growth in 2006, 2007 and 2008, supported by investment, mining, strong international commodity prices and expanding exports. Growth slowed sharply during the global financial crisis, but the country avoided a deep recession and returned to strong expansion in 2010. The government accumulated substantial international reserves and continued an active trade policy, concluding or advancing free-trade arrangements with the United States, China, Canada, Singapore, EFTA members, Thailand, South Korea, Mexico and the European Union. Critics argued that the benefits of growth were unevenly distributed and that extractive investment often proceeded without adequate consultation with Indigenous and rural communities. Domestic policy combined austerity and administrative reform with infrastructure, education and public-security initiatives. García reduced the salaries of senior political officials, supported an adult-literacy program, promoted teacher evaluations, expanded or concessioned infrastructure facilities, introduced road-safety measures and proposed stronger penalties, including a referendum on restoring the death penalty for certain crimes. Several of these initiatives encountered opposition from teachers' unions, human-rights advocates, opposition parties and constitutional authorities. The administration was also marked by cabinet instability and major controversies. The 2008 Petroaudios affair exposed recordings involving officials allegedly discussing access to oil concessions. The scandal led to the resignation of Prime Minister Jorge del Castillo and other ministers, followed by the appointment of Yehude Simon. In 2009, violent confrontations in Bagua followed a police operation to clear roads occupied by Amazonian Indigenous protesters opposing decrees concerning land and resource exploitation. The deaths of Indigenous demonstrators and police officers produced national outrage, congressional scrutiny and another change of prime minister. The episode became one of the defining political and human-rights controversies of the administration. García completed the constitutional five-year term and transferred power to Ollanta Humala on 28 July 2011. The administration is generally remembered for strong macroeconomic results and expanded international trade, but also for unresolved inequality, contentious extractive-development policies, cabinet turnover and serious allegations of corruption and excessive use of force.
History
Alan García's second administration followed a dramatic political and economic reversal in his public career. His first presidency, from 1985 to 1990, had been associated with hyperinflation, debt conflict, economic controls and institutional crisis. During the 1990s and early 2000s, Peru adopted liberalizing reforms and rebuilt macroeconomic stability. García returned to the presidency in the 2006 election after defeating Ollanta Humala in the second round, campaigning in part on a more moderate platform than the one associated with his earlier government. The transition period emphasized continuity and reassurance to domestic and foreign investors. García appointed Jorge del Castillo as prime minister, Luis Carranza as economy minister and José Antonio García Belaúnde as foreign minister. The administration retained the broad market framework inherited from Fujimori and Toledo, while promising greater social inclusion, improved public services and a stronger state presence outside Lima. It also adopted visible austerity measures, including reductions in official salaries, and announced institutional proposals involving culture, sport and fisheries. During the first years, Peru benefited from high mineral prices, rising exports and investment. GDP growth was close to 8 percent in 2006 and approximately 9 percent in each of the following two years. The government promoted free-trade agreements and expanded links with the United States, China, Canada, Singapore, Thailand, South Korea, Mexico, EFTA countries and the European Union. Mining and other extractive industries remained central to the economic model. This approach generated foreign exchange and public revenue but also intensified disputes about land, environmental protection, consultation and the distribution of growth. The government pursued several social and administrative programs. A national literacy campaign was launched in 2006, with annual public funding intended to reduce illiteracy before the end of the term. Teacher evaluation was introduced despite resistance from the national teachers' union. The administration also promoted road-safety enforcement, police modernization, airport and transport concessions, health-system access for groups such as taxi drivers, and public-works programs. García repeatedly proposed tougher criminal penalties, including a referendum on the death penalty for child rapists and later discussion of capital punishment for terrorism. These proposals met constitutional and international-law objections and did not become the central legal legacy of the presidency. Political conflict increased as the administration encountered labor protests, regional disputes and opposition from Ollanta Humala's movement and other parties. The Yanacocha mining dispute in Cajamarca was temporarily resolved through negotiations in 2006, illustrating the government's dependence on both investment and local conflict management. In October 2008, the Petroaudios scandal became a major crisis after recordings suggested improper negotiations surrounding oil concessions. Prime Minister Jorge del Castillo and other ministers resigned, and Yehude Simon formed a new cabinet. The most serious confrontation occurred in Bagua in June 2009. Amazonian Indigenous communities had protested executive decrees that they believed facilitated the exploitation of forest land and natural resources without adequate consultation. A police attempt to remove road blockades resulted in the deaths of Indigenous protesters and police officers. Accounts of the violence and the handling of bodies were contested, while investigations by Peru's Ombudsman's Office and international observers contributed to continuing debate. Congress questioned Prime Minister Yehude Simon and Interior Minister Mercedes Cabanillas, and a subsequent cabinet reshuffle made Javier Velásquez prime minister. Despite the political turmoil, the administration preserved macroeconomic stability. Growth fell to about 1 percent in 2009 as the global financial crisis affected trade and demand, then rebounded strongly in 2010. Peru ended the period with substantially higher international reserves and a broader network of trade agreements than at the start. García completed his term and transferred power peacefully to Ollanta Humala in July 2011. The record of the presidency therefore combines robust economic expansion and international integration with persistent criticism over inequality, extractive development, corruption allegations and the state's handling of Indigenous protest.
- 2011
Peaceful transfer of power
[2]García completed his term and handed the presidency to Ollanta Humala on 28 July.
- 2009
Bagua violence
[4]A confrontation between police and Amazonian Indigenous protesters became the administration's gravest human-rights and political crisis.
- 2008
Petroaudios crisis
[3]A leaked recording scandal concerning oil concessions brought down the first cabinet of the presidency.
- 2007
Teacher evaluation program introduced
[1]The administration held a national teacher assessment despite opposition from the teachers' union.
- 2006
García returns to the presidency
[1]Alan García was inaugurated as president on 28 July, beginning his second, nonconsecutive term.
- 2006
National literacy initiative begins
[1]The government launched a national program intended to combat illiteracy through sustained public investment.
Products and positioning
A second-term social-democratic administration that combined APRA political leadership with continuity in market-oriented economics, export promotion and private investment, while presenting itself as more fiscally disciplined and institutionally moderate than García's first presidency.
Education policy · 2006
National Literacy Program
A nationwide campaign launched in 2006 to reduce adult illiteracy through government funding, educational outreach and coordination with regional authorities. The program was presented as a principal social commitment of the administration and was intended to produce measurable progress by 2011.
Trade policy · 2006
Free-trade agreement program
The administration continued and expanded Peru's strategy of negotiating free-trade agreements. Arrangements involving the United States, China, Canada, Singapore, EFTA, Thailand, South Korea, Mexico and the European Union broadened market access for Peruvian exports and reinforced the country's investment-oriented economic model.
Infrastructure policy · 2006
Infrastructure concession program
A program through which the government granted concessions for transport infrastructure, including airports outside Lima. It was intended to attract private investment and improve connectivity, although concessions remained politically sensitive.
Controversies
2009
Bagua conflict
Indigenous protests against decrees governing access to Amazonian land and natural resources culminated in a police operation on 5 June. At least ten Indigenous protesters and 24 police officers were reported killed, making the episode a major controversy over consultation, policing and state responsibility.
2008
Petroaudios scandal
Leaked recordings appeared to show officials discussing the allocation of oil blocks to a foreign company. The affair implicated senior government figures, including Prime Minister Jorge del Castillo and Minister Juan Valdivia, and prompted cabinet resignations.
Marketing campaigns
- 2006National literacy campaign
Peru
The administration began a nationwide effort to reduce illiteracy, allocating recurring public funds and linking the program to its social-inclusion agenda.
Outcome. The campaign became a signature social initiative, although the supplied sources do not establish a definitive nationwide completion result.
- 2006Zero Tolerance road-safety plan
Peru
The government introduced stricter enforcement against vehicles that failed minimum roadworthiness requirements.
Outcome. The plan formed part of the administration's transport-safety agenda; the supplied material does not provide a definitive impact assessment.
Brand decisions
2009
Reshuffle the cabinet after BaguaOtherBackground
The Bagua confrontation generated congressional scrutiny and criticism of the government's handling of Indigenous mobilization.
Action taken
García announced a cabinet reshuffle and appointed Javier Velásquez prime minister.
Aftermath
The reshuffle did not end debate over Indigenous consultation, resource policy or accountability for the deaths.
2008
Replace the cabinet after PetroaudiosOtherBackground
Leaked recordings created the largest corruption crisis of the administration up to that point.
Action taken
García accepted the resignations of Prime Minister Jorge del Castillo and other ministers and appointed Yehude Simon as prime minister.
Aftermath
The scandal damaged the government's credibility and increased pressure for cabinet renewal.
2006
Continue market-oriented economic policyStrategyBackground
Peru entered the administration after economic liberalization and improved macroeconomic stability under preceding governments.
Action taken
García preserved the broad neoliberal framework, emphasized fiscal restraint, promoted investment and pursued export-market agreements.
Aftermath
The policy coincided with rapid growth and rising reserves, while critics highlighted inequality and social conflict around extractive industries.
2006
Reduce senior public officials' salariesOtherBackground
The new administration sought to signal austerity and distinguish itself from perceptions of excessive political privilege.
Action taken
García presented bills and decrees reducing the salaries of political officeholders.
Aftermath
The measure became an early symbol of the administration's austerity policy.
2006
Propose a death-penalty referendumOtherBackground
García campaigned on tougher responses to serious crime, including crimes against children.
Action taken
He proposed consulting voters on restoring the death penalty for child rapists and later raised the issue of terrorism-related offenses.
Aftermath
Congress rejected the terrorism-related proposal, and constitutional and Inter-American human-rights constraints prevented the initiative from becoming law.
Recent events
- 2010
Peru maintains strong growth despite global crisis[5]
Other
After a sharp slowdown in 2009, Peru returned to strong economic growth in 2010.
- 2006
Alan García begins his second presidency[1]
Leadership change
García assumed office on 28 July after being certified as president-elect following the 2006 election.
- 2006
Government launches national literacy program[1]
Campaign
The administration introduced a large-scale literacy initiative intended to reduce illiteracy by 2011.
Sources5 sources
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