Our research shows that a move towards a consensual politics would realise the economic potential and create an inclusive economy in Peru for all, opening the road to prosperity.
The Legatum Institute’s mission is to create a global movement of people committed to creating the pathways from poverty to prosperity and the transformation of society. Our research work is focused on understanding how prosperity is created, and to that end, with the generous support of the Templeton World Charitable Foundation, we have published a Global Index of Economic Openness to rank countries’ ability to interact with, and benefit from, both domestic and international commerce.
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This Peru case study is one of a number of in-depth reports which analyse an individual country’s performance on the key characteristics of openness to trade, investment, ideas, competition, and talent.
The 200th anniversary of Peruvian independence finds the country with 20 years of strong economic management, an open economy, international recognition from the financial markets, mineral wealth and free and fair elections. At the same time Perú has been hit by severe crises and the extreme political, social, and cultural polarisation of the June 2021 election. It showed a multi-ethnic and diverse population with contested national identity and with little national consensus on the most important issues. This has limited the political capacity of successive governments and undermined the possibility of creating a strong state and civil service.
The election of a new president, who aims to represent the influence of original/indigenous and rural populations, offers the possibility of starting a process of broad-based dialogue and conciliation to underpin a national agreement for political and economic stability. The potential for such conciliation would be to support the conditions for national transformation and prosperity, and the delivery of specific nationally-agreed policies in key areas such as political and judicial reforms, social protection, education, mining and the protection of the environment.
Thus, the 200th anniversary of Peruvian independence finds Perú with enormous economic potential but severe political constraints. A move towards a consensual politics would realise the economic potential and create an inclusive economy for all, opening the road to prosperity.
The goal of Pathway to Prosperity: Perú Case Study, is to outline a diagnosis of the challenges facing the political capacity, state capacity, and economic governance of Perú, including its openness to trade, investment, competition, and talent. It sets out the basis of a roadmap for transformation that is underpinned by political and social conciliation. Such a conciliation process could involve acknowledging the wrongs of the past, reframing the present, and envisioning a fair, mutually acceptable, and interdependent future. It is likely to require addressing power relations and should extend beyond addressing conflict and polarisation to include the drivers of economic and social wellbeing.
We are hopeful that the new government, the political opposition, and Peruvian society is able to find a national consensus that will lay the foundation for the nation’s future prosperity.