Peru’s Globalization Problem

Debate, Vol. 23, No. 115, June/July 2002, Lima Peru moves at so many revolutions per minute that even its leading thinkers cannot keep pace. Just consider a recent issue of the bimonthly political magazine Debate (Peru’s news analysis source for brainy yuppies), which offers a spirited e-mail exchange between two of the country’s most respected ...

Debate, Vol. 23, No. 115, June/July 2002, Lima

Peru moves at so many revolutions per minute that even its leading thinkers cannot keep pace. Just consider a recent issue of the bimonthly political magazine Debate (Peru's news analysis source for brainy yuppies), which offers a spirited e-mail exchange between two of the country's most respected public intellectuals: Felipe Ortiz de Zevallos and Mirko Lauer. In their elevated debate, the two thinkers pick apart the here and now of globalization in Peru. Just one problem: In late June, a scant two weeks after the magazine hit newsstands, the populace in the southern city of Arequipa -- the country's second largest urban center -- dragged the government of Peru's struggling president, Alejandro Toledo, into an improbable alliance against globalization.

What happened in Arequipa? Faced with the imminent sale of two state-owned electricity-generating companies -- a process already well established in the government's privatization schedule -- the people of Arequipa poured into the streets. They tossed stones and set fire to public buildings; paralyzed the local airport for several days, forcing tourists to extend their stay in a city that is quite beautiful, except, unfortunately, for its airport; and prompted some local authorities to launch anti-privatization hunger strikes, including one congressman who, according to the rumors in this country so prone to gossip, religiously devoured a tasty pollo a la brasa (grilled chicken) each day as the cathedral bells tolled 6 o'clock in the evening. The common justification behind the revolt was that, during his 2001 presidential campaign, Toledo had promised to keep these electricity companies in state hands.

Debate, Vol. 23, No. 115, June/July 2002, Lima

Peru moves at so many revolutions per minute that even its leading thinkers cannot keep pace. Just consider a recent issue of the bimonthly political magazine Debate (Peru’s news analysis source for brainy yuppies), which offers a spirited e-mail exchange between two of the country’s most respected public intellectuals: Felipe Ortiz de Zevallos and Mirko Lauer. In their elevated debate, the two thinkers pick apart the here and now of globalization in Peru. Just one problem: In late June, a scant two weeks after the magazine hit newsstands, the populace in the southern city of Arequipa — the country’s second largest urban center — dragged the government of Peru’s struggling president, Alejandro Toledo, into an improbable alliance against globalization.

What happened in Arequipa? Faced with the imminent sale of two state-owned electricity-generating companies — a process already well established in the government’s privatization schedule — the people of Arequipa poured into the streets. They tossed stones and set fire to public buildings; paralyzed the local airport for several days, forcing tourists to extend their stay in a city that is quite beautiful, except, unfortunately, for its airport; and prompted some local authorities to launch anti-privatization hunger strikes, including one congressman who, according to the rumors in this country so prone to gossip, religiously devoured a tasty pollo a la brasa (grilled chicken) each day as the cathedral bells tolled 6 o’clock in the evening. The common justification behind the revolt was that, during his 2001 presidential campaign, Toledo had promised to keep these electricity companies in state hands.

The government’s reaction to the protests was disastrous. After unsuccessfully attempting a police response, the government established a "negotiating" commission whose sole purpose, apparently, was to capitulate in fewer than 24 hours and to concede everything to Arequipa’s philosophizing mayor, Juan Manuel Guillén. The privatizations in question were halted, and Peru’s overall privatization program was suspended. And, of course, the government issued an official apology to the good people of Arequipa. As a result of the crisis, the country lost the better half of its once strong cabinet, and Arequipa lost an estimated $85 million in privatization revenue, which, had the conflict ended differently, would have barely covered the damages suffered in the city. But don’t forget, the people of Arequipa upheld their sovereign dignity.

Only two weeks earlier, Ortiz de Zevallos and Lauer had discussed the merits of globalization in emerging economies (or "pygmy economies," as Lauer prefers), pondering whether the problem with globalization is its uneven advance, which leaves the illusion of deepening social and economic divides. According to Lauer (a brilliant social democrat with leftist leanings), globalization will only prove effective for Peru if it can serve local interests, an unrealistic goal today given the absence of a middle class capable of engaging with the rest of the world. Therefore, in Lauer’s opinion, globalization will remain an agent of poverty and backwardness rather than development and competitiveness. "Perhaps the globalization potion is too strong for us today," he suggests, "and it should be watered down with some measures of economic nationalism." 

Ortiz de Zevallos — an unusual combination of successful businessman and equally impressive thinker — agrees with Lauer but cautions that the result should not prove self-contradictory. He suggests, for instance, that Toledo should have capitalized on his brief inaugural fame in 2001 by challenging rich countries to offer $1 in aid to poor countries for every dollar’s worth of agricultural subsidies. "That is the battle we must wage," he says, "within the system, and with its own arguments." Lauer goes on to express that today’s globalization is but the latest form of national dependency on external decisions, with societies faithfully mimicking foreign dictates on economic and social policy. Ortiz de Zevallos counters that this condition should not prevent Peru and other developing nations from seeking to transform that dependence into a more benign interdependence. To this end, government leaders must seek to build a network-state (as in the categorization of Spanish sociologist Manuel Castells) that serves and integrates, rather than a pyramid-state, which knows only how to rule and grant favors.

Two weeks after this inspired discussion, national realities brought Peru back to normal. Arequipa installed an antiglobalist precedent that has been followed by similar movements across the country, particularly in regions that practice crop substitution as part of the effort to combat drug trafficking. Now, more self-satisfied local elites can settle down comfortably in front of their television sets and declare themselves on hunger strike against globalization. Just don’t forget that special delivery of pollo a la brasa.

Rafo León is a columnist for the Peruvian newsweekly Caretas.

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