This is a huge vein of Peruvian creation and inquiry. For the time being, I am throwing up some obvious ideas, but it's worth exploring more thoroughly. This few lines barely do justice to the theme, but it's one of those issues that you have to spend time thinking through.
Mario Vargas Llosa: novelist, essayist and failed presidential candidate. His most famous line comes from Conversación en la Catedral - ¿"Cuando se jodió el Perú?" (When did Peru get fucked up?) A list of his most prominent books at the BBC, but he's filed under Llosa, not Vargas.
Julio Ramon Riberyo: Many critiques regard Riberyo as the greatest pure writer of this century. His short stories tapped into new areas and techniques.
José Maria Arguedas: the Peruvian novelist-anthropologist who captured the contradictions and potential of Peru. He was a mestizo that was raised by campesinos and gained a special insight into both the Andean world and the cultural crosscurrents that tortured many cholos. He killed himself just before the 1968 military coup, which moved to reinsert Andean culture into the mainstream.
Alfredo Bryce Echenique: Un Mundo para Julius was a novel that signified the early 1970s and the sensibilities of a generation. I read it early during my residence in Peru and it influenced my feel for the society.
Miguel Gutierrez: his novel La Violencia del Tiempo is the most important creation out of the violence of the 1980s.
My closest experience has been with Peruvian poets. You can see my translations.