The gangrene of corruption
Let's sum it up this way: over the past 30 years, regardless of the profile of the president elected and the campaign promises made, they have all applied more or less the same policy: economic pragmatism, ineffective public policies and corruption scandals at the end of their term of office. Alberto Fujimori, Alejandro Toledo, Alan Garcia, Ollanta Humala, Pedro Pablo Kuczynski and Martin Vizcarra have all played their part. While the former were able to govern with a strong Congress, the elections of 2016 and 2021 resulted in a divided Congress which, depending on the alliances involved, is either in favor of the President or in opposition. Threats of impeachment of one or other of these bodies are constant, as are rumors of corruption, and this little game is poisoning Peruvian political life, preventing any new coherent decisions. The demonstrations of November 2020, a genuine popular uprising driven by youth and social networks, were quickly stifled. The famous Bicentennial generation seems once again to have lost interest in a sclerotic political game.
Pedro Castillo, a trade unionist and teacher from the province of Cajamarca, came to shake up the political landscape, while in Lima the media and ruling circles had not seen him coming. He too was soon caught up in suspicions of corruption fuelled by the partisan media. The party that brought him to power, Peru Libre, distanced itself from him because, according to their leader Vladimir Cerrón, his policies were too timid. The new president finds himself cornered, in a precarious situation. He is multiplying his visits to the provinces and appeals to the little people who elected him, but many sections of the population are deeply discouraged by the political game. The dollar, an economic marker, climbs every time the situation weakens. The local currency, the sol, devalues, making daily life more expensive. On December 7, 2022, following an improvised coup d'état that closely resembled political suicide, Pedro Castillo was finally deposed and joined the list of corrupt presidents under judicial investigation. Dina Boluarte, his vice-president, took over, becoming the first female president in Peruvian history. Protected by her office, she still made a name for herself when she took over the reins of power, taking a heavy-handed approach to the protests. The death toll fluctuates between 50 and 100. She also made headlines around the world for the Rolex scandal, with 15 watches appearing on her wrist with no corresponding declaration or assets. Congress is too busy dividing itself and passing laws that protect it. Similarly, corruption scandals are recurrent, one of the most common being MPs demanding financial retribution from their teams, who are obliged to deposit part of their salary as a thank-you for the position they hold.
The heavy price paid to Covid
In the midst of the political crisis, Peru had to face up to the global health crisis rather ill-prepared, given the fragility of its public structures. Public health has been malfunctioning for years, managed by separate entities that don't work together: the Minsa (Ministry of Health), Essalud (Peru's social security system, which only benefits legal workers, i.e. 12.6 million members in a country of 34 million people) and, lastly, various private networks that operate via mutual insurances subscribed on an individual basis or partially subsidized by employers. President Vizcarra opted for the radical measures of border closure and social isolation, which were initially widely welcomed but failed to halt the spread of the virus and impoverished a precarious population living from hand to mouth. State subsidies took too long to be distributed, people had to go out again, and the crisis hit the country hard, first and foremost among the poorest populations, but more widely too. With 87 deaths per 100,000 inhabitants, Peru was declared, at the end of the first wave, the country with the highest mortality rate linked to Covid. With no more medical oxygen, no more respirators, no more intensive care beds (1,600 in total), the reality was very difficult, and in almost every family an aunt, uncle or relative died. Some left staggering debts in private clinics, while others preferred to die at home to avoid incurring them.
Another stark figure underlines the scale of this crisis: 10 out of every 1,000 children have lost their father, mother or referring grandparent, leaving 98,975 children in orphanages. The government pays them 200 soles (50 euros) a month. If we add to this a total closure of schools in favor of virtual teaching over two full school years, 2020 and 2021, the health crisis has only contributed to widening inequalities. How can you attend a virtual class when there's no electricity or Internet at home? Children from precarious rural and urban populations have paid a very heavy price, with many dropping out of school.
Finally, one of the solutions facilitated by the government was the withdrawal of private pension funds for retirement, which enabled those who had them to reinject these sums into the immediate economy, but impoverished them in the long term to take care of their old age. This is why, despite the mourning, Peru once again appears as an active country with a booming economy, where street vendors have reappeared, buses are full again and new small businesses (especially online) have sprung up. We had to reinvent ourselves, and fast. The vast majority of people have been very disciplined about vaccinations and booster shots. A few masks can still be seen outdoors, but economic urgency has prevailed over fear and the country has resumed its rhythm.
A country to reinvent
The 2020 figures are obviously those of a major recession. In 2020, Peru experienced an 11% recession before rebounding in 2021, with growth of 13.4%, falling to -2.7% in 2022 and -0.6% in 2023, and a projection of 3% for 2024. The extreme poverty rate has fallen over the past 25 years and now stands at 2.7% (people living on less than US$2.15 a day), according to the World Bank. However, the local statistics institute defines poverty as an income of less than S/ 360 per month, which was the case for 29% of the population in 2023, a figure that has not decreased since 2020. While the country ranks in the top third of the world's economies in terms of GDP (48thplace in 2023 according to the World Bank), it only ranks 90th in terms of GDP/capita, at just under US$7,789.
Many jobs remain precarious or informal, but it is estimated that over 17 million people are employed, a figure that is gradually rising post-Covid.
The crisis has also given rise to numerous small, often virtual, businesses. Cities are criss-crossed by motorcycle deliverymen, easy payment methods via apps have exploded, and Peru has once again demonstrated its spectacular capacity for resilience and reinvention. At the very least, the pandemic has shown the population's unfailing energy. At a time when institutions are collapsing, it is the community spirit that has re-emerged to help them cope. In the Andes and the Amazon, this situation has been accompanied by a legitimate withdrawal and mistrust, but one that has enabled rural populations to be better protected. The situation is now returning to normal, but some people are feeling stronger, legitimately proud of what the crisis has enabled them to demonstrate. In a burst of pride, the country is recovering economically. It's time for the institutions to reach out to these people, and provide a framework and foundation for this momentum, which often goes hand in hand with social insecurity. We work hard and countless hours, we never stop inventing, but we still have trouble building for the long term, and that's the main challenge for this young country with its richly promising territory.
