Poverty in Peru
According to the World Bank, Peru is among the world’s fastest growing economies due to its wealth deposit of minerals, which has reduced her poverty rate to about 28% from 42 % in 2011. Regardless, the gain has left a wide gap between the rich and poor as rural poverty rate staggers at 54%. The poor, mostly dark-skinned indigenous constitute two third of population and live in poverty as half percent of country’s wealth concentrates most in the capital Lima, home to the rich white who comprise only a third percent of the population.
How Poverty contributes to conflict in Peru
With about 19 percent of populace living in absolute poverty according to UNDP Report, it has not gone well with the natives as the feeling of being left out at the helm of country’s economic peak continues to sow seeds of frustration among the local Peruvian. This has sparked social unrest across the country with the dispute being heightened by an outcry that borders on social, economic, political, and environmental factors. Environmental disquiet includes pollution and inability to access natural resources mostly water. It is evident that 30% of Peruvians lack water in their homes. Also complaints such as failure to reap fruits by a community hosting minerals has over time fueled animosity between community and miners. Social conflicts in Peru have increased by 300% over the past five years, with 41.7% of conflicts related to social or environmental issues. These conflicts result in human suffering, with 2,312 civilians and police wounded and 195 killed between 2006 and 2011 (República del Perú 2012). Water, in particular, has been highlighted, with those opposing mining framing the choice for communities as a choice between water and gold (Cabitza 2011). While communities may have legitimate concerns over water quality and usage, allegations of pollution have also become politicized (World Economic Forum 2011). Mining companies may also be unfairly blamed for problems such as water availability or damage from artisanal mining (World Economic Forum 2011). Unlike formal mining sector, artisanal mining operates without environmental or worker protection and uses mercury to process ore, often resulting in significant environmental damage (Kuramoto 2001). Artisanal mining can also trigger social conflict as it can cause an influx of migrants from poorer areas, revenues may support illegal activities, and it can increase tensions between miners and existing title holders and local communities (Kuramoto 2001). Stakeholder surveys in Peru also found that opposition to mining based on environmental concerns often masks the real concern of communities -whether resource wealth is contributing to local development (World Economic Forum 2011). Political motives and tussle for equal distribution of the national cake especially the profits from the minerals make locals in rural areas feel sidelined. This dissatisfaction is evident when the community resorts to hostility whenever they feel that the very minerals in their land do no benefit them as most expect to see tangible fruits not merely paltry alms.
In this report, I did for my employer, I learned two key things about poverty and conflict in Peru. First, there is need to address root causes of social conflict in mining regions, which is poverty with involvement of the government so that mining revenues can be used to reduce poverty and meet development needs in rural communities. Second, civic involvement and conflict resolution should be involved towards educating communities in rural areas without use of violence. Thus social conflict can be stoked by discordant voices from the locals when they feel left out in resource distribution and negative impact of mining on environment is likely to derail development. Finally, based on what I learned, I recommend to my employer to go ahead and open retail outlets for there is enough security especially in the capital, Lima. Also there is ready man power in other provinces and requires development as long as he will involve with the community through CSR and provide job opportunities to the locals like other foreign investors have done. Peru is ideal place to invest with a revamped economy growth of up to 9% and continues to attract investors. More so, the incumbent president Ollanta Humala promised to look into social inequalities that have stirred unrest through dialogue and amicable resolution measures.
- Cabitza. Perú se debate entre el oro y el agua. BBC Mundo. (2011)
J.R, Kuramoto. Artisanal and Informal Mining in Peru. Mining, Minerals and Sustainable Development (MMSD).2001
República del Perú. Violencia en los conflictos sociales. Defensoría del Pueblo (2012).
Peru Poverty and wealth, Information about Poverty and wealth in Peru, Nations encyclopedia
World Economic Forum. Stakeholder Perceptions and Suggestions: Responsible Mineral Development Initiative 2010. World Economic Forum. (2011).
World Development Indicators. World Bank (2012).
International Council on Mining & Metals (ICMM). Peru: Country Case Study. The Challenge of Mineral Wealth: Using resource endowments to foster sustainable development. ICMM (2007).