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A Free Sol. No rich, aristocratic Limeño, Odria is a provincial of Basque, Italian and Indian blood, from a little Andean town. Except for a trip to the U.S. and neighboring countries, he has traveled little. His tastes run to bullfighting, Italian opera and the raising of fighting cocks. But taciturn Manuel Odria knows how to get sound advice and has the nerve to carry it through. To establish an economic policy, he called in U.S. Economists Julius Klein and Julien M. Saks. They studied Apra's food subsidies, price ceilings, and artificial efforts to hold up the value of the sol, Peru's monetary unit. Their advice: dump the controls and give the economy a fair chance to run free. Odria did.
The sol slid nerve-rackingly from the pegged 6.50 per dollar to 15; Beltrán and his exporting friends began to get more than twice as much for their incoming dollars; other businessmen, who had learned to like the controls system, took a beating. But the freed economy, providentially aided by the Korean war demand for metals and cotton, soon stopped rocking. The graft and black markets inevitable with controls disappeared. With restrictions on remitting profits gone, foreign investors showed new interest in Peru, and Odria welcomed them in with new laws opening up oil and mining concessions.
Now foreign oil companies are ranging northern Peru, spending heavily to find new oilfields (with little success, so far).
Down the coast, at Marcona, the Utah Construction Co. is mining 1,800,000 tons of iron ore a year. In the south, American Smelting and Refining Co. is investing $200 million (half of it from the U.S. Export-Import Bank) in huge new copper mines at Toquepala. Exports—mainly cotton, wool and minerals—have nearly doubled. Government revenues, tripled since 1948, are building schools, hospitals, roads, vital irrigation projects, public housing and a joint power-dam and steel-plant project on the Santa River. The sol stays free and steady at 19. Price levels are 79% higher than 1948, but wages—though still low—have kept pace.
An Unfree Soul. Unfortunately, Odria's economic success has not been accompanied by any comparable growth of freedom or democratic political maturity. His law for the Security of the Republic, the most dreaded instrument of the regime, empowers the Minister of Interior to "take whatever preventive measures he may consider necessary to safeguard political and social order . . . and the courts shall not intervene until the guilty party has been placed at their disposal." Odria explains that the law is "a stick I keep hanging over my door, not for use, but just so people will see it. I am like a Father who wants his son to behave properly, and keeps a whip handy." Nevertheless, everyone can see it.