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| 1988 |
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| Peru's population reached 20.7 million. | 1 |
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| 1988–90 |
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| Sendero Luminoso plunged the country into civil war. The only economic sector immune to crisis was the cocaine trade, which amounted to a billion-dollar industry by 1990. | 2 |
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| 1989, July–Aug |
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| Sendero Luminoso renewed bombing attacks of electrical stations and urban areas, and assassinated certain peasant and political leaders, severely damaging the economy. The group controlled the Upper Huallaga Valley (where one-half the cocaine consumed in the U.S. was grown, earning Sendero $500 million annually in drug taxes), as well as parts of the economically vital Huánuco, Pasco, and Junín regions. | 3 |
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| 1990, April |
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| In the first round of presidential elections, novelist Mario Vargas Llosa, pledging economic “shock therapy,” won 30 percent of the vote to Alberto Fujimori's 29 percent. Fujimori opposed shock therapy, insisting that the people's basic needs must be met. | 4 |
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| June 10 |
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| FUJIMORI WON RUNOFF ELECTIONS easily. After the election, to the dismay of his followers, he initiated severe austerity measures that came to be known as “Fujishock.” | 5 |
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