Chile–Peru relations and Angamos (Oct. 8, 1879) enabled Chile to control the sea approaches to Peru. A Chilean army then invaded Peru. An attempt at mediation by the United States failed in October 1880, and Chilean forces occupied the Peruvian capital of Lima the following January. Chile was also to occupy the provinces of Tacna and Arica for 10 years, after which a plebiscite was to be held to determine their nationality. But the two countries failed for decades to agree on what terms the plebiscite was to be conducted. This diplomatic dispute over Tacna and Arica was known as the Question
Economy of Peru and political stability, but it slowed again after the government delayed privatizations and as political uncertainty increased in 2000. President Alejandro Toledo has made investment promotion a priority of his government. While Peru was previously marked by terrorism, hyperinflation, and government intervention in the economy, the Government of Peru under former President Alberto Fujimori took the steps necessary to bring those problems under control. Democratic institutions, however, and especially the judiciary, remain weak. The Government of Peru's economic stabilization and liberalization program lowered trade barriers, eliminated restrictions on capital flows, and opened the economy to foreign investment, with the result