Peru: Redefining Independence

On July 28th, the 189th anniversary of Peru’s independence from Spain, Peruvians both at home and abroad could not help but feel a heightened sense of pride over their country’s prosperity. Peru has been identified as possessing the fastest-growing Latin American economy in 2010 and has achieved a commendable reduction in poverty and inequality, with its income per capita Gini coefficient decreasing from 0.54 in 1997 to 0.49 in 2006. Despite the global economic meltdown and domestic social and political instability affecting the country, these improvements in poverty and inequality signal a promising future. However, as the country continues to implement neo-liberal policies that have contributed to a 9.8% GDP increase in 2008, Peru must continue to guarantee its independence against economic opportunism through effective use of existing bilateral free trade agreements. These agreements should be seen not so much as ends in themselves, but rather as tools for promoting economic prosperity and higher living standards.

The Free Trade Agreement (FTA) signed with the United States in April 2006 reaffirmed the economic progress of Peru by laying a groundwork for future neo-liberal expansion. It secured access to the largest world economy, which would increase and diversify exports and eliminate trade distortions caused by tariffs, import quotas, subsidies, and non-tariff barriers. Furthermore, free trade would even out market competitiveness through a process of gradually lifting barriers.

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This analysis was prepared by COHA Research Associate Andrea Cornejo

Friday, August 06, 2010 | Research Memorandum 10.1