LIMA, Peru — The world’s top finance officials lavished praise on Peru’s “economic miracle” this week, lauding it for cutting poverty by half during a decade-long bonanza of record-high prices for gold, copper and other metals it mines.
In a gleaming $160 million convention center built for the meeting of the World Bank and International Monetary Fund, policymakers called Peru a prize pupil of their prescriptions for financial stability.
World Bank President Jim Yong Kim deemed it a “growth star.” IMF chief Christine Lagarde likened Peru’s economic growth recipe to its world-famous cuisine. Unfortunately, the praise may have come too late.
Plunging prices for minerals, Peru’s economic backbone, have cut annual growth to less than half the 6.3 percent that made it the envy of Latin America from 2002-2012, a period when per capita income doubled to more than $6,600.
Several mammoth mining projects have been stalled by violent protests and declining mining revenues threaten to force cuts in the social spending.
That means many of the Peruvians lifted out of extreme poverty are at risk of falling back.
“The reality is that The World Bank and International Monetary Fund fiesta is happening when everyone says the party’s over,” said Jose de Echave, an economist and former deputy environment minister. He said the country squandered a golden opportunity during the boom to diversify an economy long dependent on mining for most of its export earnings.
Twenty-three percent of Peruvians are poor by IMF definition. Many of the 40 percent in the next bracket — the “emerging middle class” earning $4 to $10 a day — are now at risk of joining them.
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