Second presidency (1980–1985)
In April 1980, with Peru's economy in deep depression, the military administration permitted an election for the restoration of constitutional rule. Belaúnde won a five-year term, polling an impressive 45 percent of the vote in a 15-man contest. One of his first actions as president was the return of several newspapers to their respective owners. In this way, freedom of speech once again played an important part in Peruvian politics. Gradually, he attempted to undo some of the most radical effects of the agrarian reform initiated by Velasco, and reversed the independent stance that the Military Government of Velasco had with the United States.
At the outbreak of the 1982 Falklands War (Spanish: Guerra de las Malvinas) between Argentina and the United Kingdom, Belaúnde declared that Peru was ready to support Argentina with all the resources it needed. This included a number of fighter planes from the Peruvian Air Force, ships, and medical teams. Belaúnde's government proposed a peace settlement between the two countries, but the Argentine military junta rejected it and the British launched an attack on the Argentinian forces deployed around the islands. In response to Chile's support of Britain, Belaúnde called for Latin American unity.
In domestic policy, he continued with many of the projects that were planned during his first term, including the completion of what is considered his most important legacy, the Carretera Marginal de la Selva, a much-needed roadway linking Chiclayo on the Pacific coast with then isolated northern regions of Amazonas and San Martín.
After a promising beginning, Belaúnde's popularity eroded under the stress of inflation, the War on Housing's continuation, economic hardship, and terrorism: per capita income declined, Peru's foreign debt burgeoned, and violence by leftist insurgents (notably Shining Path) rose steadily during the internal conflict in Peru, which was launched the day before Belaúnde was elected in 1980. He was president during the peak of the Lost Decade, in which unemployment rose above 50% and homelessness rose above 30%.
Regarding Shining Path, Belaúnde was aware of how serious the threat was, he failed to develop solid policy to combat the group and military officers under his administration reportedly committed human rights violations. States of emergencies were declared in the Ayacucho and Apurímac regions. When mass graves were discovered, mainstream media in Peru defended Belaúnde, instead directing attacks at left-wing opposition. In 1984, General Luis Cisneros Vizquerra said that no human rights existed during a period of war, criticizing human rights groups and the media condemning abuses by the military. When Amnesty International raised concerns to Belaúnde, he chose to ignore reports of hundreds of civilians being killed in summary executions. Congress, controlled by Belaúnde's Popular Action party, was also aware of human rights abuses, refusing to investigate them. Thousands would die during the conflict during Belaúnde's tenure.
During the next years, the economic problems left over from the military government persisted, worsened by an occurrence of the "El Niño" weather phenomenon in 1982–83, which caused widespread flooding in some parts of the country, severe droughts in others, and sharply reduced the schools of ocean fish that are one of the country's major resources.
