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Presidents Alejandro Toledo and Ollanta Humala ran on moderate leftist platforms but once elected turned quickly to centrist economic and social policies. Economic power in Peru today is also diffuse. But both groups exaggerate. The Fujimori period was good for the private sector. Some of these new economic titans are very wealthy, and some have direct influence on the communications media, but no Peruvian business group can yet rival in wealth and political power their counterparts in Chile, Brazil, Colombia or even Ecuador, nor can they be considered an overweening power structure to which all other groups in Peru are necessarily subservient.

Foreign investment now comes from a larger number of countries—including China, Chile, Brazil, Colombia, Spain and Australia as well as the United States and Canada—particularly in mining, banking and telecommunications, traditional and non-traditional agriculture, fishing, construction and consumption of goods for domestic markets.

Financial power has shifted: two of the four largest banks in Peru are based on Peruvian capital. Extractive industries, largely financed from abroad, are strong, but must contend with labor and indigenous pressures reinforced by international NGOs, mainly from Europe, that focus on human and indigenous rights and environmental issues. Although the mining companies are often adept at negotiation, these conflicts raise important issues, including air and water pollution and water scarcity; several important investments have consequently been delayed.

Evelyne Huber & John Stephens

Peru has spawned many noteworthy political ideas and movements in the past century, but has done poorly at building enduring political institutions. But it failed badly in Peru within less than a decade and the experience left the Armed Forces weakened and discredited. In the elections, Peruvians turned to Kuczynski, an experienced technocrat and financial expert, with long-held political aspirations, who gave up his U.

He won his place in the runoff election very narrowly, and then won the runoff by a tiny margin—39 thousand votes out of over 17 million cast. The main challenge in Peru is not to limit power but to create and channel it. The collective potential of the oft-changing individuals who are considered powerful in Peru to help transform the nation depends less on individual prowess than on building institutions able to provide more effective representation, assure accountability, curb corruption, and improve the quality of public services, including health and education.

The past few years have shown that Peru has the physical and human resources to achieve impressive economic growth while also addressing poverty and inequality. There is significant entrepreneurial ability in both the business and informal sectors, and there is increased awareness of and responsiveness to social issues.

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Poverty was reduced from Peru has diversified its exports and made peace with its neighbors. Its democratic institutions have functioned resiliently, if unevenly, for several decades. Although international comparative polling data shows very high public rejection in Peru of politics, politicians and parties, support for democracy has increased somewhat over the past decade. Peru still lacks strong institutions, however, in part for reasons that we think are captured by our observations of auto traffic in Lima.

Cars, trucks and motorcycles all jockey for position, at every intersection and between, darting in and out, inches from each other, competing for very small advantages that drivers hope will accumulate. Alienation from politics is the norm in Peru. No institution or social sector commands broad popular respect. What Peru needs to achieve sustained economic growth, improved social equity and effective democratic governance are better educated citizens; improved physical infrastructure; and, especially, stronger and more representative political institutions: parties and civil society organizations, able to make connections, articulate interests, build coalitions and design, develop support for, and implement reforms.

Jane S. She was president of the Latin American Studies Association in Abraham F. Lowenthal was a Ford Foundation official in Lima from and has published on Peru, democratic governance and U.


The government of Peru awarded him the Orden del Sol in As the U. Liberal or rogue? The 80s and 90s: Democracy in the making? Contemporary Peru: Extreme fragmentation Political power in contemporary Peru is highly fragmented.