Archive - May 9, 2008
Poverty Amid Progress in Peru

Peru has one of the fastest growing economies in Latin America. Over the past six years, the country’s GDP has grown more than 6 percent annually. This is largely due to high market prices for mineral exports, increases in private investment and liberal economic policies that have been put into place by President Alan Garcia and his predecessor Alejandro Toledo.
Yet Peru’s economic growth is having a limited impact on poverty rates. While the capital, Lima, and the northern and coastal regions are flourishing, over 70 percent of the Andean region still lives in poverty. A major factor in this persistent poverty is the fact that many Peruvians continue to work in the informal sector of the economy, writes the Economist:
These unwaged people are often more or less cut off from the market economy. And it is market connections that make economic growth “trickle down” to the poor, points out Richard Webb, a social researcher and former central-bank governor. Enabling that to happen is thus a job for public policy. Better roads, education and social policy are all needed.
President Garcia has worked to increase social spending on anti-poverty programs, and staunchly advocates market-based solutions to Peru’s poverty problem. However, Garcia’s ability to combat poverty continues to be hampered by his unpopularity (his latest approval rating is only 26 percent), his lack of a legislative majority, and fears of corruption in lower levels of government. Unless Garcia can find a way to make Peru's growth work for more Peruvians, his liberal economic policies may lose support from those who aren't seeing the benefits of market capitalism.
Street violence and frozen chicken
With so much media attention on Cyclone Nargis and the endgame of the Democratic Primary, one story getting inadequate attention is the latest turmoil in Lebanon.
Sectarian strife is nothing new to Lebanon, but at least one Lebanese blogger suggests that the current unrest is being triggered by the recent spike in food prices.
It Takes a Village

What do you do if you're a country that can't afford a big public infrastructure project? If you're Tajikistan, you ask your own citizens to chip in.
In Tajikistan's capital, Dushanbe, the mayor has asked residents to "donate" half their monthly salary this month and next to finish a Soviet-era dam that was never completed, according to EurasiaNet.
Tajikistan is Central Asia's poorest country. The guaranteed minimum monthly salary is barely above $10 — half the estimated monthly living expenses. Despite being Central Asia's poorest state, EurasiaNet reports that many residents are complying with the request out of fear of government reprisals. Rumors are that the government tracks who does and doesn't contribute.
The request follows a severe winter energy crisis that left most of the country in sub-zero temperatures without water, electricity or heat for four weeks. Eurasia Daily Monitor reports that Tajikistan is still importing most of its energy from its Central Asian neighbors, even though in most years it relies on its own energy production starting in mid-April.
In fact, Tajikistan has the water resources to actually export power to its neighbors. It's home to more than half of the region's hydropower potential, notes a blogger on neweurasia.net.
But with seemingly no one willing to invest in its neglected infrastructure — its ranking among the world's most corrupt countries poses one challenge — the government is left to try to collect loose change from the people themselves.


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