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Another ticklish problem was what to do about the U.S.-owned International Petroleum Co., which has been operating the rich La Brea y Pariañs basin for 50 years under a series of contracts that many Peruvians consider unfair and illegal. Last year Belaúnde's government canceled the contracts amid leftist cries for an outright takeover. Belaúnde refused, and last week he was hammering out the final details of a new contract that will keep I.P.C. in Peru but give the government a greater share of profits.
No one pretends that everything is sweet harmony in Peru. Last week Belaúnde was embroiled in a major congressional fight over his 1965 budget, which runs $75 million more than this year's record. To avoid a deficit, Belaúnde wants to raise taxes; the opposition wants to leave taxes alone and slice the budget down to size. The result is likely to be a compromise. "Belaúnde is beginning to look like a statesman," says an opposition leader. "If we can only curb his tendency to spend more than he should, Peru may well have its revolution within the law."