President Alberto Fujimori of Peru faces probably the most difficult choice of his political career as he decides how to respond to the kidnap crisis in Lima. The capture of hundreds of guests at a Japanese embassy reception by members of the small Tupac Amaru guerrilla band challenges him to respond with the customary determination he has used to deal with this and larger guerrilla movements, such as the Maoist Shining Path organisation, during his term of office. Against that, he must balance the likelihood that many people would be killed in an assault on them. embassy, including political, business and diplomatic representatives who are important for Peru's international reputation and economic development.
President Fujimori is probably not overly concerned that he would lose popularity at home if he decides to storm the embassy. He was re-elected with a convincing win over the former United Nations Secretary General, Mr Javier Perez de Cuellar, in April 1995. This came after he won approval to change the constitution so that he could stand for another term. His successful anti-inflationary policy and the vigorous suppression of the Shining Path rebellion have maintained his popularity, despite the inequalities that have flowed from economic reconstruction and privatisation.
He has a well-deserved reputation as an authoritarian ruler. But it is countered by the fact that he remains an outsider, the son of Japanese immigrants and still seen popularly as an alternative to rule by the ex-colonial white elite. Investment and aid from Japan have been a marked feature of the last few years, explaining why this embassy should have been targetted.
Peru has had sufficient experience of political failure to tackle its underlying structural economic problems under successive presidents, that its citizens remain willing to support President Fujimori's policies even if they increase poverty and injustice. Such are the paradoxes of the neo-liberal economic development models that have been adopted throughout Latin America in the last decade, and which are highlighted by the propaganda of this guerrilla group. But if international investment and economic liberalisation turn the economy around - as has been the case in other parts of the continent - many people are willing to give such policies a chance.
The authorities would appear to have relaxed their preparedness for such an incident, probably because they assumed they had put paid to the Tupac Amaru group in recent years. The army is a central institution in Peru. It has used the successive threats from guerrillas to become more and more powerful and will want to see a quick resolution of this affair. This is a case study in terrorist action, which draws massive attention to the country and the group involved. Unfortunately the slogan "victory or death" used by the kidnappers leaves little room for optimism that the crisis can be resolved peacefully and without further loss of life.