Dr. Yasmin Calmet

In recent months, the Peruvian sol has strengthened to become the region’s most stable currency, outperforming its Mexican and Colombian counterparts. However, macroeconomic indicators of stability mask a far more complex and contradictory reality. While controlled inflation, robust foreign reserves, and 4.2 percent GDP growth in 2024 would suggest a thriving economy, nearly 30 percent of Peru’s population lives below the poverty line, with 5.7 percent in extreme poverty, according to the National Institute of Statistics and Informatics (INEI). A strong currency guarantees neither equitable development nor social justice. On the contrary, Peru’s exchange-rate stability conceals deep inequalities that reveal the limits of an economic model that prioritizes financial resilience at the expense of productive inclusion.

How Peru’s Strong Sol Conceals Deep Social and Economic Divides

Currency Paradox:

Peru is among the countries in Latin America that have experienced a series of political developments that could threaten the stability of their democratic system. Over the past ten years, Peru has had six presidents, only two of whom were democratically elected, while three were impeached, and one was forced to resign due to popular pressure. The current situation in 2024 is no exception, as political instability seems to have become the norm in Peru. In the past two months, there have been allegations of illicit enrichment against President Boluarte and mass resignations of the ministers of education, the interior, agrarian development and irrigation, foreign trade and tourism, and women’s affairs. There have been violations of the constitution committed by both Congress and the judiciary, while the government also refused to release data on poverty rates.

What Are the Roots of Peru’s Political Instability?

Democracy in Peril:

Peru is known for the stability of its instability. In the last six years, it has weathered countless political crises and six presidencies, four of which led to impeachment or ended due to societal pressure. There have been numerous riots driven by various political, social, and economic factors, while the country is also struggling with weakened democratic institutions, economic recession, and an ongoing clash between executive and legislative branches. Peru enters 2024 facing familiar challenges that need to be resolved urgently. Without immediate solutions, the country’s fragile democratic institutions could collapse under authoritarianism.

Understanding Peru's Political Turmoil

Deepening Crises:

Peru is reeling in the midst of a political crisis as its democratic system is rocked by both peaceful and violent demonstrations. These protests shed light on the political polarization and social rifts within Peruvian society.

How Peru’s Demonstrations Reflect the Country’s Failing System of Governance

Political Instability:

The current Latin American political situation is too complex to discuss fully in a single article. However, we might begin by highlighting the political and social complexity that exists in both Peru and Brazil, which have struggled to establish democratic societies.

How Can the Recent Protests in Peru and Brazil Erode Democracy?

Violent Unrest:

Since the election of Pedro Castillo as the President of Peru in 2021, a huge uncertainty has dominated the political scene of the country that has, for years, been grappling with internal divisions, tensions between its institutions, and external challenges, including an economic recession. On December 7th, Peru captured the world’s attention with an attempted coup led by now-former President Pedro Castillo, who was subsequently impeached by the congress and arrested for attempting to undermine democracy.

Peru

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