October 23, 2017

The Evolution of Peru

Despite the vast Westernisation and positive effects felt by globalisation on Peru since the 1990s, there is still a slight sense that this is all a facade to the underlying issues which still remain. The most prominent evidence of this lies visible to anyone who ventures out of the main heart of any town or city. A procession of poverty abundant housing and small communities live with merely survival at the heart of their existence. Home upon home is unfinished, whilst stay dogs roam the towns, roaming the streets with authority.

Housing is the biggest issue that I have personally seen across the outskirts of the main urban areas of Peru. Driving towards Cusco, this scene was not too dissimilar to that of an epidemic. Steel rods tower above each main support whilst many buildings lack simply a roof and are left abandoned and unfinished. But this theme of poorly built and incomplete housing hasn’t happened by chance.

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Speaking to my guide Juan Andrés, he vividly recalls a not too distant past. It was no more than 30 years ago that as a child he would be uncertain whether his parents would return home or not after work. Hyperinflation, corruption and political unrest led to a government with a dearth of support. These issues were too much for many and led to considerable civil uprising. Daily terrorism, mostly in the form of car bombs, was used in protest of the government leading to extreme hostility and need for change in Peru.

At the start of the 1990s, new government leadership was called and voted upon by the Peruvian people who elected Alberto Fujimori. Of Japanese heritage, Fujimori would bring calm, peace and love back to Peru through political, social and economic reforms; a more tranquil Peru was set to be built on this new political leadership and reform allowing the county grow primarily through exploiting its scenery and heritage to tourists.

As part of Fujimori’s socialist government, in 1992 – once the Peruvian Sol had been stabilised – he brought in an interesting act: whilst one is constructing a new building, one is not required to pay tax whilst it remains incomplete. This fiscal policy was supposedly introduced to stimulate aggregate demand and therefore growth within Peru. It created new jobs within construction (adding to the circular flow through the multiplier effect) and also buildings for businesses and shops to be set up; all whilst reducing Absolute Poverty by providing homes and shelter.

On the face of it, this – one of many new reforms under the Fujimori regime – was a strong injection and opportunity for Peru to grow and construct a more prosperous outlook. Which, in some cases it did, however the act was greatly vulnerable to abuse and led to an insidious and lasting issue. Homes were half built. The ground floor is habitable whilst the upper levels remain unfinished, allowing owners to claim no tax to be paid. This has left Peru strewn with what may be interpreted by the benighted as a derelict, third world country, contradicting its success elsewhere.

Despite Fujimori’s salvation of Peru, he ended as a fallible leader. His leadership ended in despair; ridden with underlying, deceitful corruption that when exposed, imprisoned Fujimori and once more led Peru to seek reform of its troubled government. Although there was initial revival, acts like the one previously mentioned (since abolished) and corruption only stimulated further desire from Peruvians for a new, better way of life which they only half received from Fujimori.

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My initial accusation of an evolved Peru to be a facade would be harsh, yet not overly critical. Developed areas such as Puno, Cusco, Arequipa and Lima are all such places now benefiting from, and driving tourism in Peru. Globalisation is certainly visible within these areas shown by the likes of McDonald’s and Subway being erected in continuous succession, which is inevitable and germane to globalisation.

These areas are certainly a minority however. Tourism is attracted to places of interest: Cusco for Machu Picchu; Puno for Lake Titicaca and so on, but the vast majority of Peru is, in effect, untouched, poverty ridden land. I am not one to say this is necessarily a bad thing – money and wealth is far from a quintessential part to life for many in Peru. Poverty may seem to be the initial case from my Western perspective, but to those living on the outskirts and in basic conditions are living the simple and happy life.

Every country wants to increases standard of living for its inhabitants and Peru is no different. The aid of tourism over the past twenty years has had a defining effect on the profile of Peru today and this continuous outside injection – along with the correct government supervision – will continue to profit, grow and prosper Peru into a strong country that is able to provide education, housing and healthcare to all.

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