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Machu picchu ruins AS THE CRADLE of South America’s most advanced native American civilizations, Peru has a rich and unique heritage among the nations of the southern continent. It encompasses a past that reaches back over 10,000 years in one of the most harsh and inhospitable, if spectacular, environments in the world--the high Andes of South America. The culmination of Andean civilization was the construction by the Incas, in little more than one hundred years, of an empire that spanned a third of the South American continent and achieved a level of general material wellbeing and cultural sophistication that rivaled and surpassed many of the great empires in world history. Paradoxically, Peruvian history is also unique in another, less glorious, way. The Andean peoples engaged the invading Spaniards in 1532 in one of the first clashes between Western and non-Western civilizations in history. The ensuing Spanish conquest and colonialism rent the rich fabric of Andean society and created the enormous gulf between victors and vanquished that has characterized Peru down through the centuries. Indeed, Peru’s postconquest, colonial past established a historic division--a unique Andean "dualism"--that formed the hallmark of its subsequent underdevelopment. Peru, like its geography, became divided economically, socially, and politically between a semifeudal, largely native American highland interior and a more modernized, capitalistic, urbanized, and peru/pe_glos.asp#mestizo">mestizo (see Glossary) coast. At the apex of its social structure, a small, wealthy, educated elite came to dominate the vast majority of Peruvians who, by contrast, subsisted in poverty, isolation, ignorance, and disease. The persistence of this dualism and the inability of the Peruvian state in more recent times to overcome it have prevented not only the development but also the effective integration and consolidation of the Peruvian nation to this day. Another unique feature of Peru is the role that outsiders have played in its history. Peru’s formal independence from Spain in 1824 (proclaimed on July 28, 1821) was largely the work of "outsiders," such as the Venezuelan Simón Bolívar Palacios and the Argentine José de San Martín. In 1879 Chile invaded Peru, precipitating the War of the Pacific (1879-83), and destroyed or carried off much of its wealth, as well as annexing a portion of its territory. Foreigners have also exploited Peru’s natural resources, from silver in the colonial period to guano and nitrates in the nineteenth century and copper, oil, and various industrial metals in the twentieth century. This exploitation, among other things, led advocates of the dependency theory to argue that Peru’s export-dependent economy was created and manipulated by foreign interests in a nefarious alliance with a domestic oligarchy. Although foreigners have played controversial roles throughout Peruvian history, internal demographic changes since the middle of the twentieth century have shaped contemporary Peru in other fundamental ways. For example, the total population grew almost threefold from over 7 million in 1950 to nearly 20 million in 1985, despite slowing down in the 1970s. This reflected a sharp jump after World War II in fertility rates that led to an average annual increase in the population of 2.5 percent. At the same time, a great wave of out-migration swept the Sierra. Over the next quarter century, Peru moved from a rural to an essentially urban society. In 1980 over 60 percent of its work force was located in towns and cities, principally the capital, Lima (one-third of the total population), and the coast (threefifths ). This monumental population shift resulted in a dramatic increase in the informal economy, as Peru’s formal economy was unable to expand fast enough to accommodate the newcomers. In 1985 half of Lima’s nearly 7 million inhabitants lived in informal housing, and at least half of the country’s population was employed or underemployed in the informal sector. These demographic changes during the previous quarter century led anthropologist José Matos Mar to describe the 1980s as a great desborde popular (overflowing of the masses). Once the proud bastion of the dominant creole (American born) classes, Lima became increasingly Andeanized in ways that have made it virtually unrecognizable to a previous generation of inhabitants. In some ways, this trend of Andeanization suggests that the old dualism may now be beginning to erode, at least in an ethnic sense. Urbanization and desborde popular also tended to overwhelm the capacity of the state, already