November 15, 2008 [LINK / comment]
Earlier this month, protests in southern Peru got out of hand, and a state of emergency was declared, authorizing the Army to restore order. Three people were killed and several dozen were injured when workers in the city of Tacna gathered to voice anger at a law passed by the Peruvian Congress that would shift a great share of the proceeds from state-owned mines to the central government in Lima. See CNN.com. "Renting mobs" for the purpose of staging protests is very common in Latin America, and it would be interesting to find what political organizations or labor unions were financing that street battle. Historically, the Peruvian economy (and the economies of Bolivia, and other mineral-exporting countries in Latin America) has been held back by corrupt, inefficient state-owned mining enterprises. Whether the government of Peru stands up to the mercantilistic "mafias" (exposed and denounced by Peruvian economist Hernando de Soto) will make a big difference in whether Peru continues to lead the way in Latin American economic growth, as it has in recent years. Peru has managed to overcome political calamity stemming from the Fujimori era, and has stayed on the path of growth, contrary to the expectations of many observers (like me).