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Country Profile: Peru

Peru
Economics

The affluent boardwalk on Lima’s Pacific Ocean is littered with professional dog-walkers huffing to keep up with their charges. Signs warn owners of heavy fines for not picking up the pooches’ solid bodily functions. The lush flower gardens and manicured green parks must be kept clean for the high-income residents.

Meanwhile, in the city’s dusty shanty towns and the country’s interior, many children work collecting fares on buses or hawking wares in the market to help feed their families. The ambitious go to school in second-hand uniforms, often without breakfast.

Demo against government clampdown on social protest

S Boyd, Guarango, GRUFIDES

Such are the daily contradictions in Latin America’s latest boom economy. Peru led the region with 6.9 per cent economic growth last year but underneath the glowing statistics is a country divided between rich and poor.

Instead of combating poverty by investing in social programmes, successive governments have concentrated on the art of statistical manipulation. Last year the government lowered the poverty line, based on the skewed logic that, despite rising prices, Peruvians actually need less money to cover their basic needs. Anyone earning more than $102 a month is now considered ‘middle-class’, even though the legal minimum wage is $300 a month. Even by the government’s suspect figures, over eight million Peruvians live in poverty, with nearly two million in extreme poverty, on less than $1.25 a day. 

Nevertheless, the World Bank, in its infinite wisdom, has labelled Peru an ‘Upper Middle Income’ country and aid organizations have left in a mass exodus for more grant-rich pastures. The sudden drop in non-profit organizations, coupled with lack of government spending on essential services like healthcare and education, has increased the divisions in society.

Protest against a US mine in Cajamarca, with communal food

S Boyd, Guarango, GRUFIDES

Ironically, most of Peru’s wealth comes from its neglected countryside. The economy is based on resource extraction, led by mining and followed by oil, gas and timber. But the profits have never gone to local communities.

The looting and pillaging of Peru began 500 years ago with the Spanish conquest, fuelled by Europe’s lust for gold. More recently, a military government in the 1970s, hyperinflation in the late 1980s and a 20-year civil war made Peru a virtual pariah for foreign investors.

As the country was emerging from this crisis in the early 1990s, then-President Alberto Fujimori began a full-scale auction of natural resources. Once again foreigners stampeded to a new El Dorado.

Fujimori is currently serving a 25-year prison sentence for corruption and crimes against humanity, including torture, kidnapping and murder. According to the country’s Truth Commission, at least 70,000 people were killed or disappeared during the civil war. But the Commission’s recommendations have not been implemented, especially in the area of reparations for victims. Many perpetrators of abuses remain at large.

Presidents since Fujimori have continued his neoliberal economic policies. Peru is now the world’s sixth-largest producer of gold and second-largest of copper, but the benefits have failed to trickle down to mining communities, who are instead left with contamination and social conflict.

Last year discontented voters elected Ollanta Humala to the presidency on a promise of bringing about a ‘Grand Transformation’, with development and equality for Peru’s indigenous and marginalized peoples.

Humala passed a law on the rights of indigenous peoples to prior consultation, but loopholes allow the government to approve new concessions on indigenous land even if communities are opposed. Moreover, his first year in office has seen a major clampdown on protest and violent repression by police and military.

It seems as though Peruvians are going to have to wait a bit longer for the Grand Transformation.

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  • Income distribution
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  • Position of women
  • Freedom
  • Literacy
  • Sexual minorities
  • NI Assessment (Politics)