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The curious case of Peru: Stability amid uncertainty

SA Expeditions’ Co-Founder and CEO, himself an American-Peruvian, writing from Peru, gives context to the recent social strife in the country. It’s much more complicated than it seems – and the western press coverage is barely skimming the surface.

Last month, Peru instated its sixth president in the past four years, Dina Boluarte. Her predecessor, Pedro Castillo, had just attempted a Hail Mary to stay in office by unconstitutionally trying to dissolve the congress, which was hours away from removing him. He also claimed, with nervous hands, in a televised address that he wanted to reform the state institutions and put in place a 90-day curfew. 

He has since been given 18 months of preventive imprisonment for the attempted coup and has claimed as a defense that he doesn’t remember giving such a ludicrous decree. Regardless, the instability has kicked off social convulsions across the country at a level of intensity rare even for Peru, where protests are a common thing.

Castillo, a teacher from the rural Andes had a weak mandate at best, having won by only 45,000 votes in a tight run-off. He ran as an extreme left-wing candidate and received only 19% of the first-round votes. He burned through 80 government ministers in his eighteen months of office, and struggled even to communicate clearly, let alone lead a country of 33 million people. Boluarte, who got the job by default as his Vice President, is also a leftist, but has a better command of language, and has promised new elections. Having these elections as soon as possible, dissolving the congress, and rewriting the constitution are just some of the disparate demands of protesters.

A stable economy

The instability that has wracked Peru for the past five years and especially the last week, seems almost unbelievable, but a deeper look shows a different picture. Through these five years, Peru, as a major economy in Latin America, has clocked inflation at 7.8% (that’s lower than the US), with GDP growth of 2.7% (around the average of its regional neighbors) and bolsters of some of the healthiest foreign reserves ($69.4 billion currently) in its recent history. Even its currency, the Peruvian Sol, was barely affected by the tumult of the past week. 

Major Economies of Latin America
Data source: Economist / Graph: Nick Stanziano

Peru is a mineral, agricultural, and maritime rich country that feeds a global thirst for commodities. The steady behavior of its star central bank president, Julio Velarde, over the past 16 years, seems to view the musical chairs of the presidency as nothing more than a distraction that feeds the salacious political reporting consumed nightly by Peruvians. This is coupled with a relatively effective armed forces, whose guns, discipline, and support have been the final arbiter of constitutional matters of the highest order – like whether the president or the congress was constitutionally correct in their actions last week. 

Ingrained inequality

But the circus that is Peru’s executive and legislative branch can also be viewed through an alternative lens. This lens focuses on the country’s deep class divisions, running along geographic and cultural lines, that go back to the country's colonization by Spain in the 16th century. Deep-seated ethnic and economic inequality means that today far too many Peruvians live a life of struggle. Colonialism’s legacy is a hard thing to kick, and in Peru, skin color, language, and the proportion of European blood in one’s veins dictate much of how society organizes itself. One quarter of the country of 33 million people speak Quechua, the main pre-Columbian language, and 30% of the population lives in poverty. Peru even codifies this distinction of class and wealth, by categorizing its society into economic segments from A to D, with A being the most affluent, and D, representing the poorest of the poor masses. 

Many on the left, often those from the indigenous hinterlands, who are seemingly in favor of rewriting Peru’s constitution, like to say that the current situation is a rebuke of neoliberalism. But this ignores the fact that many illiterate people in the hinterlands are subject to traditional forms of community power. These people are often pushed to the front lines of protests by opaque forces that generically call themselves “united social groups.” It seems hard to fathom why such a significant number of Peruvians would risk life and income to paralyze their country in support of Castillo, who was in office for such a short stint. Especially seeing Boluarte is also a leftist. 

Also consider that the regional fiefdoms of Peru’s rural south have been the center of the protests, which included attacking and burning down police stations and public records. Not coincidentally, the first convulsions erupted in the region of Apurimac, which is precisely the main route for raw coca paste that’s trafficked out of the growing regions of the high jungle, and the stronghold of narco-terrorists over past decades. Narcotrafficking undeniably influences the situation in some way, and it also infects much of civil society. Precisely measuring narcoterrorism’s influence is tricky as it’s always hidden from view – either in inaccessible regions of the jungle or dressed up as professional politicians. The fact that Peru’s battle against the cartels seems almost non-existent suggests that there’s a deep underbelly that’s constantly getting pushed under the rug. All this puts doubts on the left’s claim that there is an authentic political reawakening of the masses, or even a broad-based political movement of any cohesion based in democracy.

Haves and have-nots

This goes along with the thinking of Peru’s affluent classes who are quick to blame the political and societal instability on the ignorance of a populace who are under the influence of communists, cartels, and supposed terrorists. But even if the elites are right, logic suggests that if there weren’t so many Peruvians struggling for opportunity, there wouldn’t be such vulnerability to manipulation by opaque forces attempting to destabilize democratic institutions for political gain.

It would be a mistake to believe that the societal convulsions rocking the country are purely the result of manipulation from terrorists dressed up as leftist forces. Those touting Peru’s economic stability also need to realize that the impressive economic figures mentioned above are largely the result of extractive enterprises that do not distribute wealth very well. The “haves” need to give more of a lifting hand to the “have-nots”, through real political and societal reform … Or risk what they “have” being taken away through chaos and dictatorship, as happened in Venezuela.

A wake-up call?

The strain on the population is real and seemingly growing. Peru's affluent and technocratic classes need to wake up to the reality that they have as much responsibility as anyone to provide pathways of opportunity for their downtrodden countrymen and women. The vast majority of Peruvians just want a society that lets them put food on their plates, educates their children, and gives them opportunity. They want a homeland that gives them optimism for a future among the world's democracies. 

The simplistic paradigm of right versus left does not apply to the current situation in Peru. This is a country where people still bang pots and pans on their balconies and use literal town squares to chant and display their displeasure at the government. One can only hope that the town squares in Peru’s rural hinterlands have not been co-opted by those looking to diminish the state and its democracy to serve their own needs. And that the haves finally wake up and consider ways to put more energy into developing a more equal society for the benefit of all Peruvians.

Real-time update: SA Expeditions is monitoring the situation with our on-the-ground team to ensure travelers are up to date, and to help decipher generalized international media reports. As of March 8, 2023, Machu Picchu and the Inca Trail is open and fully operable, with trains running to the archaeological site. As well, all other touristic activities in the Cusco region are operating as normal, with passengers right now from around the world exploring and enjoying their visit to the country.

The week of March 6 – March 10, 2023: During the last 30 days, Peru has been moving firmly in the direction of stability, and a country with welcoming arms to visitors. The government has bolstered security as well as implemented a massive social program aimed at stimulating regional economies. Those responsible for the violence, corruption and other non-democratic form of protest and government activity are now being held accountable for their illegal actions. The Peruvian Congress is still trying to find a consensus and vote to move up elections (President and Congress) to 2023, and there continues to be demands for social reform. Peru now needs to continue the harder job of working to give all Peruvians an equal place in society.

About the author: Nick Stanziano co-founded SA Expeditions and currently serves as its CEO. Originally from California and nationalized citizen of Peru, he straddles two worlds. Nick has a BA in Global Studies from the University of California. Nick believes wholeheartedly that tourism has the potential to bring dignified income to the forgotten people of South America and the world.

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