Peru leads South American growth rates but social benefits remain stagnant
Sunday, August 2, 2015
By Sebastián Lacunza
Editor-in-Chief
Editor-in-Chief
No South American country has grown as much as Peru in the last fifteen years. The country experienced a boom quite similar to Argentina or Uruguay in the period 2003-2011 but Lima had not experienced such a severe collapse as that seen of 1999-2002 in the economies of the Río de la Plata. If Latin America is divided between the so-called populist and pro-market economies, Peru — an icon of the latter — had a much better performance than other darlings of the investment consultancy Standard & Poor’s, such as Chile and Colombia. As mining prices fall, growth has slowed in recent years but Peru’s economy is far from those dangerous ghosts that have beset some of its neighbours.
The boom in the country has co-existed with a great paradox. Peru’s last three presidents, the centrist Alejandro Toledo (2001-06); the ex-leftist, now conservative and always skilled Alan García (2006-11); and inhibited populist Ollanta Humala (2011-16) faced the final stretch of their governments with approval ratings between 10 and 20 percent, and were unable to influence the elections for their upcoming colleague. They were (Humala is going to be in 2016) commentators of a script that did not include them.
“All three share a problem of legitimacy and corruption as Peru runs on autopilot, which leaves a huge distaste among people,” sociologist and writer Irma del Águila says to the Herald from Lima. Revenues from “the extractive strategy could have led to diversification in the economy and that has not happened, another missed opportunity,” Del Aguila says.
Coming from very different backgrounds, Toledo, Garcia and Humala share eloquent features. They faced their terms with remarkable weakness in Congress; faced personal accusations of corruption; and in the darkest side of their administration, they clashed with with social protests, especially when it involved Andean and indigenous communities, causing dozens of deaths during the mandates of the last two presidencies.
The similarities extend to a central aspect of the Peruvian economy. All opened doors to highly profitable mining projects, and pairing the opportunity with meager tax revenues.
While recent presidents have sailed on an economy with an annual investment for mining exploration of around $USD 500 million since 2003 (with a peak in 2012 and a subsequent sharp decline), the creator of the model, the king of corruption, lawlessness and repression Alberto Fujimori (1990-2000) remained in prison faking illnesses to go free.
There are statistics for all tastes. Some, like Alberto Adrianzén (an Andean parliamentarian, former teammate in Humala’s Nationalist Party and now a harsh critic) indicate that 70 percent of Peruvians live in the informal economy, with health care and university systems marginalizing large part of the population. But the official poverty rate shows a number that would amaze those who play the game of figures in Argentina: 22.7 percent, a difficult thing to reconcile with the fact that the minimum wage is barely US$240 and only four out of ten Peruvians over 60 years old are pensioners.
“If Humala had won in 2006 (when he was defeated by García), Peru would have entered a process similar to that of Bolivia,” Adrianzén cries for something that never, ever happened. That year, the accusation of “Chavista” worked as an effective stigma against Humala. Five years later, Humala left the troublemaker behind and was elected president. The campaign found the staunchly conservative Mario Vargas Llosa accusing El Comercio media group of demonizing Humala. All of Vargas Llosa’s allegations against the abuse of dominant position by El Comercio — its influence is even greater than the power wielded by Clarín in Argentina — would sound familiar to that blitz against the “real power” fired daily from the Kirchnerite TV show “6,7,8” .
Adrianzén defends the Humala who was lost in the arms of Vargas Llosa and laments that his former ally is no “Cristina, or Evo, or the PT in Brazil, who call for demonstrations, move their party apparatus and confront with the media and the opposition.”
Next year there will be presidential elections in Perú. No clear leadership or alternative appears rise in the horizon, but many anticipate that Fujimori’s daughter, Keiko, will have a clear opportunity this time. The twice-elected president García is rehearsing his eternal return.
If Keiko wins, the one who will celebrate is Juan Luis Cipriani, Archbishop of Lima, leader of the ultra-conservative Opus Dei group, a friend of Fujimori and also a tenacious opponent of Pope Francis. Many wondered in Peru last month why the Argentine pope, as part of his plan to visit the poorest countries in South America, started in Ecuador, flew over the Peruvian sky, landed in Bolivia and ended his tour in Paraguay.
“Our governments live with mafias that have always been reproducing themselves since the times of Fujimori and Alan Garcia's APRA, with a very aggressive message from the media and a very conservative Church,” Del Águila says.
@sebalacunza