For the past five years, Peru's economy has had one of the most remarkable runs in Latin America. With the exception of recession-smothered 2009, the Andes nation has generated remarkable annual economic growth above 7% and as high as 10%. But even so, a third of Peruvians still live in poverty (although that's down from an appalling 54% a decade ago). And as the esteemed Peruvian economist Hernando de Soto said recently, they're “knocking on the door of the public's conscience. [They're] saying, ‘I am not happy because I am not participating'” in the Peruvian party.
They did, however, take part in Peru's June 5 presidential election, and not surprisingly they voted in the guy who they believe can help them get a bigger scoop of all that wealth. The fact that the guy is Ollanta Humala – a leftist who led a failed coup in 2000 as an army officer and has been an acolyte of Venezuela's socialist President Hugo Chávez – sent Peru's stock market plummeting this week, as expected. But what Humala-phobic investors didn't quite catch is that there's another big reason a majority of Peruvians elected him: they realize that poverty can't be reduced if prosperity declines as well, and they're convinced that Humala has renounced Chavista leftism for a more pragmatic, Third Way approach – the same development strategy they've seen work so impressively in neighboring Brazil and Chile.
Read Full Article »