Lima Consensus

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The term 'Lima consensus' (created by

deregulatory, primary-exports-based model of economic growth, and free-market orientation. They are staunchly supported by the country's economic elite.[1] The nomenclature 'Lima Consensus' was attributed to Steven Levitsky, a professor of government at Harvard University.[2][3]

These measures have been instrumental in making the country an appealing destination for

market liberalization and capital interests.[2][3]

Proponents of the Lima Consensus are often labeled as free-market fundamentalists. They typically resist any form of economic interventionism, quickly branding such measures as socialist or communist in nature.[2][4] The Lima Consensus is considered a more radical iteration of free-market policies due to its aggressive promotion of liberalization, coupled with a minimal—and frequently ineffective—level of state regulation or institutional reinforcement.[1]

In contrast to the broader Latin American trend during the early 2000s, known as the '

pink tide,' which saw the ascent of several left-wing governments, the Lima Consensus has faced no substantial political opposition since its inception in the early 1990s. The presidencies of Pedro Castillo[5] and–to a lesser extent–Ollanta Humala[6] are often cited as exceptions, although the Consensus continued to prevail afterwards.[6][7]

Background

According to José Carlos Orihuela, the belief of limited state intervention held by the elite is due to frequent commodity booms, the weakness of the government, social disparities and the lack of national economists.

Plan Verde

The Peruvian armed forces grew frustrated with the inability of the García administration to handle the nation's crises and began to draft a plan to overthrow his government.

neoliberal economic policy, the genocide of impoverished and indigenous Peruvians in an effort to remove a drain on resources and the control or censorship of media.[14][15][11]

During his campaigning for the 1990 Peruvian general election, Alberto Fujimori expressed concern against the proposed neoliberal policies of his opponent Mario Vargas Llosa and promised not to use shock therapy on Peru's economy.[8][16] Peruvian magazine Oiga reported that following the election, the armed forces were unsure of Fujimori's willingness to fulfill their objectives outlined in Plan Verde and it was reported that they held a negotiatory meeting with him to ensure that Fujimori followed their direction.[17][12][13] Fujimori would go on to adopt many of the policies outlined in Plan Verde.[12][13]

Implementation

The Lima Consensus as established by the Fujimori administration focused on

technocrats that existed in Fujimori's government would go on to promote the Consensus and dominate politics in Peru.[18]

As the

social democrat Alan García took implementation of the consensus even further, adopting policies similar to Augusto Pinochet and combatting with indigenous groups opposed to mining in their communities, events culminating with the 2009 political crisis that saw civilians against an oil development in the Amazon rainforest massacred.[2][4] The Consensus effectively paralyzed the government of Ollanta Humala.[4] Keiko Fujimori, the daughter of Alberto Fujimori, has been a major proponent for the Lima Consensus, utilizing the support of neoliberal economist Hernando de Soto to support her position during her elections.[20] In 2020, the Congress of Peru refused to ratify the Escazú Agreement regarding environmental rights due to the beliefs surrounding the Lima Consensus, arguing that it would violate the sovereignty of Peru.[2]

Following the

Fitch Solutions warned that his election posed "substantial risks to the 'Lima Consensus', the investor-friendly economic policy framework that has persisted over the last 20 years".[7]

Analysis

The majority of the growth that occurred following the Lima Consensus occurred due to commodity booms, not due to deregulation and free trade.

social programs.[19] Successful Peruvian politicians often espouse center-left ideas while campaigning to gain the electoral majority and later turn to support the powerful right-wing elites after taking office.[4]

This lack of state intervention as promoted by the Consensus has resulted with a weak government with poor performance, with many Peruvians experiencing insufficient basic services such as education, justice and security.[18] The lack of state intervention has also resulted with the increase of corruption, crime, crony capitalism and inequality, with many political officials frequently moving between business and government positions without oversight.[2] Regarding organization, Peru's weak government has also caused poor urban planning throughout the nation.[3] The Consensus has also resulted with environmental degradation as businesses take advantage of deregulation in order to attain more growth.[2][19] Such shortcomings of the government – promoted by the economic elite – result in a cycle of citizen dissatisfaction with the weak government while the government remains weak due to poor political support.[18]

References

  1. ^ , retrieved 2024-01-02
  2. ^ a b c d e f g h i j k l Tegel, Simeon. "How Peru Laid the Groundwork for an Oil Spill Disaster". Foreign Policy. Retrieved 2022-02-23.
  3. ^ a b c Tegel, Simeon (8 May 2020). "The Health Crisis is Changing Peruvian Politics". Americas Quarterly. Retrieved 2022-02-23.
  4. ^
    La Republica
    (in Spanish). 2013-05-11. Retrieved 2022-02-23.
  5. ^ "Peru's Election Of Pedro Castillo Will Pose Substantial Risks To Policy Continuity". Fitch Solutions. 2021-06-11. Retrieved 2024-01-02. Castillo's presidency will threaten [...] the 'Lima Consensus'.
  6. ^ a b "Police Repression Legalized as Mining Protests Grow in Peru". NACLA. Retrieved 2024-01-02. Despite the fact that Ollanta Humala's administration has sometimes sought more political and negotiated means, [the Lima consensus] remains in place
  7. ^
    Fitch Solutions
    . 2021. p. 45.
  8. ^ a b c d e f g h i Orihuela, José Carlos (January–June 2020). "El consenso de Lima y sus descontentos: del restringido desarrollismo oligarca a revolucionarias reformas estructurales". Revista de historia. 27 (1). Concepción, Chile: 77–100.
  9. ^ .
  10. ^ "Commanding Heights: Peru". PBS NewsHour. Retrieved 2021-10-14.
  11. ^ . the military's growing frustration over the limitations placed upon its counterinsurgency operations by democratic institutions, coupled with the growing inability of civilian politicians to deal with the spiraling economic crisis and the expansion of the Shining Path, prompted a group of military officers to devise a coup plan in the late 1980s. The plan called for the dissolution of Peru's civilian government, military control over the state, and total elimination of armed opposition groups. The plan, developed in a series of documents known as the "Plan Verde," outlined a strategy for carrying out a military coup in which the armed forces would govern for 15 to 20 years and radically restructure state-society relations along neoliberal lines.
  12. ^ . important members of the officer corps, particularly within the army, had been contemplating a military coup and the establishment of an authoritarian regime, or a so-called directed democracy. The project was known as 'Plan Verde', the Green Plan. ... Fujimori essentially adopted the 'Plan Verde,' and the military became a partner in the regime. ... The autogolpe, or self-coup, of April 5, 1992, dissolved the Congress and the country's constitution and allowed for the implementation of the most important components of the 'Plan Verde.'
  13. ^ .
  14. ^ Rospigliosi, Fernando (1996). Las Fuerzas Armadas y el 5 de abril: la percepción de la amenaza subversiva como una motivación golpista. Lima, Peru: Instituto de Estudios Peruanos. pp. 46–47.
  15. S2CID 234586692
    . a government plan, developed by the Peruvian army between 1989 and 1990s to deal with the Shining Path insurrection, later known as the 'Green Plan', whose (unpublished) text expresses in explicit terms a genocidal intention
  16. ^ "La frugalidad de "Cambio 90" y el derroche de Fredemo" (in Spanish). El Proceso. 14 April 1990. Archived from the original on 20 September 2018. Retrieved 27 December 2017.
  17. ^ "El "Plan Verde" Historia de una traición". Oiga. 647. 12 July 1993.
  18. ^ a b c d e Levitsky, Steven (Fall 2014). "First Take: Paradoxes of Peruvian Democracy: Political Bust Amid Economic Boom?". ReVista. Archived from the original on 22 November 2014.
  19. ^ a b c Holland, Lynn (30 July 2014). "The House on the Mountain: How Mining Corrodes Democracy in Peru". Council on Hemispheric Affairs. Retrieved 2022-02-23.
  20. Fitch Solutions
    . 2021.