A Country Advances
By Alejandro Toledo
eru’s economic growth between 2001
and 2006 surpassed the region’s al-
ready impressive growth over the
past 10 years. And in 2006, our country
soared to an impressive 7. 5 percent GDP
growth rate. By 2008, it reached 9. 8 percent.
How can we explain the recent success of Peru
and Latin America? On the one hand, exogenous
factors have favored us. International markets
have paid high prices for our traditional exports,
such as mineral resources. But the region has also
reaped the fruits of a 60-year internal effort to
put its economic house in order. We have delib-
erately opened new markets to the world and ad-
opted responsible macroeconomic policies.
This economic progress has substantially reduced
poverty in Latin America. However, income inequality (as measured by the Gini coefficient) has fallen to a
much lesser degree.
In the late 1990s, Peru did not seem on course to arrive where it is today. Alberto Fujimori was well into
his second term as president. In the midst of a domestic insurgency, Fujimori had taken advantage of
the country’s vulnerable situation to subvert Peru’s
democratic institutions. His regime tightened its authoritarian grasp on power by systematically hijacking the national parliament, the judicial system, the
armed forces, the electoral board, and most media. In
addition to unprecedented levels of corruption, Peru
suffered from grave human rights violations, drug
trafficking and arms smuggling.
By 1997, Peru was a dangerously high-risk country in
the eyes of investors. The nation became isolated from
the international financial community. Private and
public investment dropped steeply. The fiscal deficit
ballooned, and the country stumbled into recession.
The end of the Fujimori regime left Peru deeply
wounded and disappointed, but it also gave us an opportunity to come together in new ways. Although
modern Peru never had a national leader of Indigenous origin, it was just such a person who led this de-
Americas Quarterly SPRING 2012
ENRIQUE CASTRO-MENDIVIL/REU TERS