A second international arrest warrant has been ordered for the former Peruvian president Alejandro Toledo amidst allegations that he received up to $20m in bribes from the Brazilian construction giant Odebrecht. The former president would, in return, have granted a lucrative contract to build a transoceanic highway between Brazil and the Peruvian coast. Toledo would not be the first Peruvian president to be found guilty of corruption. In 2006, ex-president Alberto Fujimori (1990-2000) fled to Japan with an alleged $600m of public assets. He has been sentenced to more than 30 years in prison.
The corruption scandals in Peru contrast starkly with the widespread poverty. Although Peru’s GDP has steadily increased since 2000, official figures show that, in 2015, over 20% of the population lived below the national poverty line. For the Peruvian economist, Hernando de Soto, the inability of Peru, and other third world countries, to benefit from capitalism arises from their inability to produce capital.
I have been several times to Peru to spend time with the family of my Peruvian wife. Far from the enchanting images of Cusco, I have witnessed, at first hand, the daily struggles of ordinary Peruvians, people I have come to love. In the land of the Incas, who worshipped the sun, the same sun should shine for everyone, “El mismo sol”. But does it?
Pisco, Ica region of Peru
Pisco is a small town situated 240 km south of Lima. In Quechua, Pisco means “bird”, and the area is often visited because of the concentration of marine animals and birds at the Paracas National Reserve. You can take a boat trip to the Islas Ballestas, a collection of islands off the Peruvian coast, where many bird species can be seen as well as sea lions. The boat trip takes you past El Candelabro, a giant lamp dug deep in the rough sand, as are the Nazca Lines.
My wife’s parents, affectionately known to us as Papito Pablo and Mamita Tina, have lived all their lives in a small adobe bungalow surrounded by more or less cultivable land, not far from Pisco. Adobe is a building material made from earth and often organic material. In fact, on the land there are 2 such bungalows. The first comprises just one room equipped with a fridge since, until recently, it was the only habitation supplied with electricity. We did manage to get her parents’ main quarters connected, but due to a lack of space, the fridge stays where it is, 70 meters from the kitchen. The toilet is also some distance away from the main bungalow, and as in most of Peru, you cannot flush used toilet paper directly down the sewage. Papito Pablo turned 90 last year. Full of energy and still managing to share with us funny stories about his youth, it’s a real pleasure to converse with this man, and we even mentioned Brexit. He, like the rest of my wife’s family cannot see any sense in it. With the advancing years, Papito Pablo has had to diminish the amount of work he carries out on the land. Most of the land is now rented and the crops consisting mainly of corn, are sold at the regional markets. But he still wakes up the crack of dawn and, when my son and I finally wake up at around 9, he is hard at work tending sweet potatoes and bean-plants, so essential for their survival.
But Papito Pablo loves the life he leads in “el campo” (the field), despite being far away from his 3 daughters, son and grandchildren, all living in Lima. I’m sure that the secret of his longevity is him not living in Lima.
We also visited Mamita Tina’s father, who at 96 years of age, lived nearby. Her sister looked after him, and they lived together, also in an adobe bungalow. It is sad to see that senility had taken over but in rare instances of lucidity he managed to tell me what he thinked of the present day government of Peru. “They should all be put in a bus, petrol poured over the bus, and bang…“, he said, rubbing his two hands together as if striking a match. You can understand his feelings and even agree with him. How can one contradict a 97 year old man who gets practically no government help and who survived an 8.0 earthquake in 2007. He happened to be outside the bungalow at the time and could only sit and watch the disintegration of his entire dwelling in under 10 seconds. After the earthquake, he slept in a tent for weeks on end until his bungalow was reconstructed. At the age of 98, Abuelo (grand-father) passed away peacefully, last Monday.
The Two Faces of Lima
With its population of just under 11 million, Lima is the 30th city in the world in terms of population density, ranking just above London. Lima is an endless array of imaginative driving, short tempers and intuitive entrepreneurship. Practically every building in the less wealthy districts of the capital seems to be some sort of business. Whether these businesses are legal and registered is doubtful. In his widely acclaimed study entitled “The Mystery Of Capital”, the Peruvian economist Hernando de Soto believes that the lack of paperwork testifying to the value and ownership of private enterprises and private land, is the root cause of Peru’s inability to benefit from the capitalist system. Many other third world countries suffer from the same problem. De Soto travelled through farmlands in Indonesia and was at a loss in ascertaining who owned what. The only thing that could guide him in defining land boundaries was the barking of dogs.
As I strolled through the rice fields, I had no idea where the property boundaries were. But the dogs knew. Every time I crossed from one farm to another, a different dog barked. Those Indonesian dogs may have been ignorant of formal law, but they were positive about which assets their masters controlled. – Hernando de Soto – The Mystery of Capital
For de Soto, “most of the poor already possess the assets they need to make a success of capitalism”. They, along with everyone else, just don’t know about it and have no way of proving the value of what they own. Because the assets are not documented, they cannot be used for investment purposes either as a loan or as shares by bankers and investors, respectively. My wife’s younger sister, Angelica, has set up a “corner shop” in an annex adjoining the flat that she shares with her elder sister, her husband and daughter. It’s one of those shops so typical of the poorer parts of Lima, where you cannot actually enter the shop and have to exchange goods and money through an iron trellis door, for security reasons, no doubt. The flat is situated in the Los Olivos district of Lima, officially described as one of the most “up and coming” districts in Lima. “Up and coming” it may be, but from what I saw, poverty is still very much part of life in Lima, even in Los Olivos.
Since my first visit to Lima, in 2004, nothing seems to have changed. A few buildings may have been completed but on the whole Lima remains, with the exception of wealthier districts such as Miraflores, one gigantic construction site. Peruvian flags fly high on many an uncompleted building, and it seems that the Peruvians love their country despite the circumstances.
Whilst in Lima, we slept by my wife’s eldest sister and her husband. Their flat is also situated in Los Olivos. The building, comprising 4 flats is quite elegant from the outside, clean and modern on the inside. The busy road at the street corner was unfinished the last time that I was in Lima. This time around, 2 years later, nothing had changed. It did strike me, though, that one side of the street was vaguely approaching what we in Europe would qualify as finished. The explanation for this curious situation is that the 2 sides of the street belong to different districts and come under their own set of rules and timetable.
Papito Pablo and Mamita Tina came back to Lima with us, to see us off at the airport. We spent the last day in Miraflores, Lima’s wealthiest district. The JW Merriot Hotel stands majestically on the seafront, and for €400 a night, you are entitled to a panoramic view on the pacific ocean. The gardens and parks along the seafront are impeccably maintained, as is the Jorge Chavaz International Airport, on the other side of town. It’s the stuff in-between that needs mopping up.
Time flies, and we were soon homeward bound. Before we disappeared along the corridor leading to the security checks, we turned around one last time to wave goodbye to the family we were leaving behind. I noticed a few tears running down my son’s cheeks. He was holding back his emotions, but the tears betrayed him.
“Why are you sad?” I asked, “We’re going back home to your Play Station and your buddies.”
“I’ll miss Papito Pablo,”he said.
I put my arms around him to comfort him and whispered into his ear, “I know you will, and I’ll tell you something, so will I.” We all made our way to the departing plane and flew off on time, on a 20 hour journey back to reality, our reality to be more precise. Out of Peru, back into Europe, closer to Brexit, the importance of which was firmly put back in its place by my short stay in Peru.