December 5, 2013
For the Herald
Despite economic growth, inequality is still a threat
NEW YORK — Despite the rapid economic growth experienced by their country in the last two decades, Peruvians show signs of discontent. Though there is democracy, corruption scandals and the widespread perception that authorities are more concerned with their own well-being than with distributing the benefits of economic growth are eroding trust. Vigorous economic growth is welcome news in a country where one in every four people lives in poverty, but the inability to establish a well-functioning democracy that expands opportunities and reduces inequality remains a threat to Peru.
Since democratically-elected president Alberto Fujimori closed Congress in 1992 and drafted a new Constitution (promulgated in December of 1993), Peru has experienced sustained economic growth. For the 48 percent of the 31 million Peruvians born after 1990, guerrilla insurgency, counter-guerrilla violence and human rights violations are stories of a troubled past. They hold no personal memories of the years of hyper-inflation and violence that anteceded the period of authoritarian rule under Fujimori.
Fujimori’s neoliberal economic reforms were kept in place after he was forced to resign in 2000, when his attempt at modifying the term-limits provision in his own custom-made Constitution backfired. Proper democratic-rule was restored in 2001. Since then, presidents Alejandro Toledo (2001-2006) and Alan García (2006-2006) have completed their constitutional terms. Ollanta Humala (2011) is less than halfway into his 5-year term. Though they all campaigned to reform the neoliberal model, they implemented gradual reform and, for the most part, deepened and consolidated the market-friendly economic model. The continuity in policy priorities has resulted in solid economic growth. Since 2001, per capita income has more than tripled. Peru has been the fastest growing country in Latin America in the past 12 years. Democracy has also taken hold, though not as strongly as economic growth. Fujimori himself is serving time for human rights violations committed under his regime against indigenous and rural Peruvians.
It would seem that Peruvians should be satisfied with the direction their country has taken. However, Peru has one of the lowest levels of support for democracy in Latin America — higher only than Bolivia, Guatemala and Honduras. Peru ranks third in Latin America among people declaring to have participated in a protest in 2012 and also has the lowest levels of presidential approval in Latin America since 2001. President Toledo had single digit approval during a good part of his term while president García struggled in the low 30s. Humala started with higher numbers, but his approval has slipped recently. His support now stands at 27 percent, the lowest since he assumed office.
Peruvians are sour about their authorities and about the contrast between rapid economic growth and persistent levels of inequality. Corruption scandals have been common features in the three democratically-elected governments. There is a widespread perception that authorities are more concerned about themselves and paying back favours, than about improving the reach and quality of social programmes.
The capital city, Lima, stands as unquestionable evidence of the profound levels of inequality. The well-to-do sections of San Isidro and Miraflores are full of tourists. Hipsters flock Starbucks and Juan Valdés coffee stores in sharply designed commercial centres. Business people fill state-of-the-art Peruvian cuisine restaurants. High-rise office and apartment buildings are mushrooming everywhere. The airport is full of business people and tourists from neighbouring countries — who complain that their own countries are not as business-friendly as Peru. Yet, the city of more than eight million inhabitants also suffers from intolerably insufficient infrastructure. Public education is mediocre at best — there are not even any good instruments to assess the real extent of its shortcomings — and public health is severely inadequate. If you venture outside the safe confounds of the wealthy-districts, you immediately notice the absence of proper middle-class neighbourhoods. Just a few blocks separate the most modern architecture from seemingly endless shantytowns of precarious constructions that lack potable water and electricity.
For those who pay attention, the news media — increasingly more diverse and bravely inquisitive of government corruption — continuously reports on government scandals. The absence of functioning political parties makes accountability difficult to enact. Throwing the rascals out is a practical impossibility given Peru’s proportional representation system and widespread party-switching in the unicameral Congress. For those who care to vote, selecting candidates from among useless party labels — Love for Peru, Union for Peru, Peru Possible, Peru Wins — and an excessive number of candidates — 23 presidential hopefuls in 2006 and 11 in 2011 — becomes an intricate task.
Not surprisingly, a majority of Peruvians are discontent with the direction the country is headed. They value economic stability and growth. They see opportunities expanding. Yet, they also feel the political elite is excluding them from a festivity of growth and progress that benefits the same small and impenetrable ruling class. As it has happened in the past in other countries in Latin America, patience will eventually run short — especially if an economic slowdown worsens hopes of future inclusion. If the fruit of economic growth is not better distributed, the sweet sensation of growth and development will soon turn sour in Peru.