Tag Archives: FTA

Bagua, Peru – what you can do

Posted on by under Business & Economy, Life in Peru

I’ve seen a number posts with ways you can express your voice about the bloodbath that happened yesterday in Bagua, in the Peruvian Amazon. Some good sites are Peruanista, Amazilia’s blog and IKN.

But frankly, the most effective action a US citizen can take is to write your elected representative and tell them no amount of free trade or money can ever be justification for bloodshed. Tell your reps that sections 16, 17 (labor) and 18 of the US-Peru Free Trade Agreement are nothing but pie-in-the-sky promises that have no validity outside the wealthy areas of Lima. The US ought to demand the FTA is frozen or revoked until the government of Peru gets a dose of social equity.

Because of what happened, and Alan Garcia’s comments, there can be no other alternative: Alan Garcia must resign. If this kind of bloodshed had taken place in Bolivia or Venezuela, there would be international condemnation all the way from the White House. The accepted belief in the US and Europe that the government of Alan Garcia (30% approval rating) is somehow better than that of Evo Morales or Hugo Chavez (60% approval ratings) is perhaps understandable due to ideologies, but nevertheless completely false.

The macro-economic gains that Peru has enjoyed have not translated to improved quality of life for people in the provinces. The deep-rooted divisions between ethnic groups have only been amplified as the wealthy in Lima sell out the country’s natural resources with little or no benefit for indigenous people. And finally, all the so-called economic gains are extremely short-sighted. If the world economy experiences significant inflation for a few years – which is entirely possible – the large sums of foreign investment Alan Garcia and his cronies now rave about will seem like a pittance. But by then it will be too late, Peru’s vast natural resources will have been sold out. Future generations will work for pennies-on-the-dollar to pay for today’s windfall for a bunch of rich old guys in suits.

There are many great opportunities in Peru, the idea that bloodshed and selling out 72% of the Peruvian Amazon is somehow justifiable or necessary for progress is deplorable.

Leader of the Year: Alan Garcia ???

Posted on by under Business & Economy, Life in Peru

I just stumbled across this article in Latin Business Chronicle:

“What a year it has been for Peru. It managed to post its best economic performance in 14 years (and Latin America’s second-highest growth rate), post another jump in foreign direct investments, achieve investment grade and host key regional summits with Asia and Europe…Much of the credit goes to Alan Garcia…”

My first thoughts were something like “Madre de Dios… Ayude me pues!!!”. Now I have often said life in Peru has been great to me and there are a lot of wonderful opportunities here, but I find it disappointing that both the media and political / business establishment in Peru often view “progress” strictly in macro-economic terms, levels of foreign investment, nr of free trade agreements, etc.

The unfortunate reality is that the macro-economic gains Peru has made in the last 2 decades have not improved the quality of life of all Peruvians proportionately, hence Alan Garcia’s (and before him Toledo’s) low approval ratings. In addition, in light of the collapse in commodities prices I wrote about earlier, anyone who believes Peru won’t be affected by the global recession is dreaming.

The good news, I agree with Umair Haque that “this is no mere recession: it’s a tectonic global shift in savings, consumption, and investment”. There has never been a better time than now to tackle some of the issues that will improve the quality of life for all Peruvians, such as economy in the provinces, environmental protections, occupational safety, corporate culture, cost of home ownership, etc.

Finally, one of the accomplishments touted by Alan Garcia was the free trade agreement (TLC) between Peru and China signed at the APEC summit. Here’s a wildly speculative, yet extremely intriguing question about what will happen to La Oroya now that the Chinese are coming?