The contentious relationship between Indigenous communities, mining companies and the state came to a head last week in Peru. Mines and Energy Minister Jorge Merino persuaded Peruvian President Ollanta Humala to exclude Quechua-speaking communities from a law that gives Indigenous groups the right to be consulted about major mining and infrastructure projects that would directly affect them. 

At issue is the country’s consulta previa (prior consultation) law—based on ILO Convention 169—which requires that Indigenous and native communities be consulted prior to the establishment of any policy and development processes that would directly affect them. President Humala formally signed ILO 169 into national law in 2011 in a symbolic ceremony in the town of Bagua—the location of the fatal 2009 clash between law enforcement and native communities in the Amazon that killed 33 people and cast a shadow on then-President Alan García. 

Yet just one and a half years after ILO 169 became Peruvian law, it appears the state is rolling back what was once a win for the Indigenous communities. The cabinet battle being led by Merino prompted Deputy Culture Minister Iván Lanegra to resign from his post on Friday. Lanegra, who was responsible for overseeing the implementation of consulta previa and improving relations with Indigenous communities, announced his resignation via Twitter.

Peruvian President Ollanta Humala concluded a five-day visit to the People’s Republic of China after meeting with Chinese Prime Minister Li Keqiang and representatives of top corporations on Monday. The objective of the meetings is to boost bilateral relations and attract strategic Chinese investments in Peru.

China is Peru’s main source of foreign investment, and the two countries signed a Free Trade Agreement on April, 2009. For Peru, increasing trade with China is a key way of diversifying its export economy. For China, Peru is an important source of minerals, primarily copper. Noting the mutual interests of the two countries, Li Keqiang called on the Peruvian leader to enhance collaboration in fields such as trade and investment, finance, infrastructure, technology and human resources.

Peru still has a lot of room to grow in terms of non-traditional exports such as squid, grapes, seaweed, wood, liver and frozen foods. According to the Chamber of Chinese-Peruvian Commerce (Capechi), Peruvian exports to China are expected to increase by 25 percent in 2013. China’s growing demand for energy has led to plans to build and operate a natural gas pipeline—the Southern Peruvian Gas Pipeline—which will provide gas to Cusco, Arequipa, Puno, Moquegua and Tacna.

A stronger partnership with Peru is part of a greater Chinese effort to consolidate its presence in Latin America. During his tour through Brazil, Argentina, Uruguay and Chile in 2012, former Chinese premier Wen Jiabao advocated for the creation of a China-Latin America cooperation forum, a platform to improve market conditions and increase political trust between China and Latin American nations. Today, China is the leading commercial partner of Brazil, Chile, Peru and Argentina; and the second of Costa Rica, Mexico and Uruguay.

Nosotras estamos en la calle, or We Are on the Streets, is the name of an arts and politics festival that took place earlier this month for the fifth year in a row to promote female participation in the public sphere. Organized by different social collectives interested in highlighting women’s participation in street art, music, theater, and politics, Nosotras estamos en la calle was about women “occupying” spaces that have always been dominated by men.

Some men and women believe that International Women´s Day should not exist because it promotes more gender division. However, according to Peruvian newspaper El Comercio, 97 Peruvian women were killed in 2012 as a consequence of femicide. In a country where gender violence is seen as normal, being a woman is dangerous. Fighting for women’s rights and gender equality is still a necessity.

The arts have always been a good way to discuss such topics. Women are hardly ever recognized as street artists or muralists, as drummers and bandleaders, as hip-hop singers or improvisers, or as strong political figures. Nosotras estamos en la calle brought together female artists to share their knowledge with others.

As the world grapples with generating employment, growth and innovation, a new club of countries has emerged as an engine of regional growth. Through improved governance, liberalized trade and stable macroeconomics, the economies of Mexico, Colombia, Peru, and Chile have rallied in recent years.

Rather than following the lead of the increasingly protectionist and interventionist Mercosur countries, these Pacific economies have taken their cues from the Asian tigers of the 1980s, quietly becoming economic overachievers. Given the rise of China and the American pivot to the East, the Puma countries are poised to play a significant role in the emerging Pacific century. 

Statistically, the Pumas are growing by leaps and bounds. They have averaged 4.69 percent annual growth since 2005. The Colombian, Chilean and Peruvian middle classes expanded more than 10 percent between 2000 and 2010, while some estimate that the Mexican middle class already accounts for more than half the population. Inflation, a great scourge of Latin American economies, has been held within central-bank bands across the Puma economies. Puma sovereigns are investment grade, and their issuances are hot.

On paper, the Pumas roar. But what is driving these figures, and are they sustainable?

In October 2010, for the first time in history, voters in Lima elected a female mayor. Susana Villarán was a seasoned political figure who had long been involved in politics and human right issues—helping to establish Lima’s vaso de leche (glass of milk) program to combat child malnutrition and serving as a member of the Inter-American Commission on Human Rights. Villarán also served as Peru’s Minister of Women’s Affairs and Human Development and as Police Ombudsman.

She is now in full campaign mode again ahead of a March 17 vote on whether to recall her as Mayor of Lima. The movement to recall her is not due to any type of negligence or misuse of funds; in fact, she has focused on cleaning up Lima. Instead, her efforts to move Lima forward have enraged certain constituencies—and they are now fighting back.

But with less than two weeks before the recall vote, it increasingly looks like Mayor Villarán may keep her job. A poll conducted by Ipsos Perú (February 20–22) reveals that 54.5 percent of limeños still intend to vote to recall her with a “yes” vote, while 45.5 percent will vote against the recall. But that 9 percentage point advantage for the “yes” campaign reveals a tendency where opinion polls increasingly show the “yes’ vote losing steam. Just one week earlier, the “yes” campaign had a 16 percentage point lead. Last November, 65 percent of voters in Lima said that they would vote to recall Villarán.

If she stays in office, the Lima Mayor will work to finish the job she started over two years ago.

Villarán came into office with three top agenda items: security, transportation, and the rights of children. She and her team worked to create new social programs and initiatives, such as the Warmi Wasi center for women fleeing domestic violence, the “Barrio Mio” (My Neighborhood) social services program, and CicloLima, which included a serious and long-term reorganization of Lima’s chaotic and overburdened public transportation system. Villarán also made a special effort to promote transparency in public management and to sanction any sort of corruption in the municipal government.

Under her tenure, the Metropolitan Municipality of Lima launched a highly-regarded web-based transparency portal in 2011 to provide public access to information. The city also launched an investigation of the Relima–Comunicore case, a corruption scandal that involved Villaran´s predecessor, Luis Castañeda Lossio.

From the beginning, Villarán did not have the full support of all sectors of Lima: she was elected mayor with a narrow 38 percent to 37 percent victory over her nearest rival, Lourdes Flores Nano. Villarán´s two-year government also has involved some mistakes, including the collapse of one of the walls of the Via Parque Rímac, a traffic-management development project, and delays in the construction of the Costa Verde coastal boardwalk project. Despite her background as a leftist political leader and her willingness to tackle the long-term problems of Lima, such as transportation and insecurity, Villarán’s crackdown on Lima’s informal economy—by relocating merchants to a new wholesale marketplace—has made her more unpopular among the middle, lower-middle and lower socioeconomic classes.

As a result of Villarán’s low approval rates, Marco Tulio Gutiérrez, the director of the Instituto Peruano de Administración Municipal (Peruvian Institute of Municipal Management), launched a signature-gathering campaign to recall Villarán at the beginning of 2012. Gutiérrez successfully gathered the 400,000 signatures needed to prompt a recall vote, and last October, the Jurado Nacional de Elecciones (National Elections Jury—JNE) scheduled a referendum for March 17, 2013, on whether to recall Villarán.

The campaign to recall Villarán is unsurprisingly backed by Solidaridad Nacional, the party of Villarán’s predecessor, Castañeda Lossio (2003–2010), who has denied any involvement in the Relima-Comunicore scandal. The two-term former mayor of Lima leads the list of mayoral candidates that voters would elect to take over if Villarán loses her job. Meanwhile, referendum leader Gutiérrez has openly expressed his interest in working with Castañeda if he runs for public office in the next election.

The confrontation between the two sides of the campaign has intensified as the referendum date approaches. The “yes” campaign has described Villarán as incapable of governing Lima, while the “no” campaign, led by Luis Favre, a famous Argentinian political advisor who directed the political campaigns of former Brazilian President Luiz Inácio Lula Da Silva and Peruvian President Ollanta Humala, argues that Villarán represents the change that Lima needs. Not a day passes without a representative of either side reinforcing the “yes” or the “no” perspective in the news.

Less than a month away from the referendum, Villarán´s campaigners have a few more weeks to keep reversing the polls. Nevertheless, the high economic, political and social costs of the referendum reveal the city’s deep social divisions and conflicting political goals. As long as limeños lack a commonly-conceived idea of what is best for the city and its future, the possible recall of Villarán will do little to create agreement among Lima’s diverse sociopolitical actors.

Natural resource extraction is a key contributor to economic growth in various parts of the Western Hemisphere, but governments, businesses and civil society are faced with how to improve extractive activity and its effects on broad-based socioeconomic development in respective communities. A special section in the Winter 2013 issue of Americas Quarterly, released today, includes photo essays and analysis to look at these challenges and compare the potentials and pitfalls for the natural resource industry in Chile, Colombia and Peru in four critical areas: community relations and consulta previa (prior consultation); value-added economic development; the nature of governance and public management; and the environment.

In the case of consulta previa, although Convention 169 of the International Labour Organization—on the right of Indigenous and tribal peoples to prior consultation—has been ratified by 20 countries, most of which are Latin American nations, the accord is still subject to competing interpretations by community leaders and governments.To maximize success and mitigate conflict, the AQ special section urges all stakeholders to view consulta previa as a regular process throughout the life of the exploration or exploitation project, and for businesses to broaden the scope of consultative mechanisms beyond extraction’s original impact zone.

The special section also suggests that governments and businesses work together to ensure a positive impact of extractive industry over national economies. By leveraging tax and royalty resources, governments can attract investment and promote local innovation. It cites Chile as a model in terms of its Fondo de Innovación para la Competitividad (Innovation Fund for Competitiveness). However, clear priorities for social policy and investment must be in place to ensure an equitable resource distribution.

In addition, despite some progress in economic and community development over the life of extractive industry in the three countries, governments and businesses still lag behind in protecting the environment from the negative effects of mining exploration. The AQ section asks governments to boost the capacity and strengthen the authority of federal environment ministries and for businesses to monitor energy consumption levels and seek creative ways to reduce them. 

In addition to the photo essays and analysis, an exclusive AQ documentary looks at a proposed project by the coal mining company Cerrejón to move an entire river 16 miles (26 kilometers) and the effects that would have on the Wayúu Indigenous community that lives alongside it .

A new financial transactions law, Ley de Dinero Electrónico, signed this week by President Ollanta Humala will make it easier for Peruvians to conduct financial transactions using their mobile phones.  The law, which goes into effect this July, will help the estimated 65 percent of poor Peruvians who lack access to formal banking services or ATMs.

More than 32 million mobile phone users will be able to securely pay invoices, transfer money, purchase goods and deposit money to their phone from their checking and savings account, greatly increasing both their financial and social inclusion. The electronic funds will be offered by banks, savings and loans institutions, and new companies that specialize in mobile transactions, such as the Empresas Emisoras de Dinero Electrónico (EEDE).

Currently, only 28 percent of the adult population use formal bank accounts.  The new law has the potential to reach 95 percent of the districts in Peru that have mobile coverage.

Humala also announced that this new strategy allows the Pensión 65 recipients (government stipend program for the marginalized, elderly population) receive their monthly stipend of 125 soles ($49) through mobile transactions.

According to Scotiabank’s innovation channels manager in Lima, Miguel Arce, “Approximately $15 billion moves in the retail business per year.  About 6 percent of these transactions are done through banks, which means that $10 billion moves in cash through grocery stores, hardware stores and others, all of which use cell phones.” 

President Ollanta Humala is on a three day visit to France, Spain and Portugal as part of his effort to strengthen Peru’s ties with European countries. On Thursday, Humala met with his counterpart in France, François Hollande, where both leaders signed agreements related to student exchanges programs and mutual recognition of diplomas. 

On Thursday, the Peruvian government agency Registro Nacional de Identificación y Estado Civil (National Identification and Civil Status Registry –RENIEC) finished validating over 400,000 signatures supporting a referendum to recall the mayor of Lima, Susana Villarán.

Villarán, the first woman to take office as mayor of Lima in January 2011, has received extensive criticism for the launch of a new wholesale marketplace that opened on September 23.

The backlash against Villarán started when she announced plans to relocate merchants of La Parada and La Victoria markets to the new wholesale market of Santa Anita. Merchants were not content with the new market and began violent protests against the mayor’s initiative in La Parada marketplace. Lima’s public transportation was forced to bypass two central metro stops for the safety of the passengers.

With the signatures validated Thursday, Lima’s Jurado Nacional de Elecciones (National Elections Board—JNE) can now announce a citywide recall referendum. The elections board will have 90 days to set a date for the referendum.

If Mayor Villarán is removed from office, her successor would be city councilman Fidel Gregorio Ríos Alarcón. The new mayor would serve until December 2014.

Peruvian President Ollanta Humala indicated Wednesday that his government had received no formal request from former President Alberto Fujimori’s family for an official humanitarian pardon from the state. However, according to Fujimori’s lawyer, César Nakazaki, Fujimori is planning to ask for a pardon sometime this week, with legal documents expected to be submitted this Friday.

Fujimori is currently serving a 25-year prison sentence for human rights violations that occurred during his 1990-2000 presidency. The sentence was handed down in 2009 after Fujimori was linked to the massacre of 25 people by the Grupo Colina paramilitary death squad in the early 1990s and the kidnapping of a businessman and a journalist in 1992. About 70,000 people died in Peru’s internal conflict, which occurred as the government launched an offensive against the Maoist-inspired Shining Path rebels.

Fujimori, 74, is currently suffering from oral cancer and has undergone five operations since 1997, according to his daughter, Keiko Fujimori, who ran for president in 2011. In September, Fujimori’s family said that the former president would seek a humanitarian pardon. “I will continue to fight for my health, my liberty and my innocence,” the elder Fujimori said in a letter.

Humala has said he will not grant the former president a pardon unless he or his family expressly requests one. “There’s nothing written on this topic, and therefore, it’s not on the government’s agenda right now,” said Humala during a press conference at a hotel in Miraflores.

Fujimori’s son, Kenji Fujimori, said his father would not ask for forgiveness for crimes that he didn’t commit, but that he may be willing to admit he was at fault for certain “errors” during his administration.

The Fujimori family says that the former president is focusing on his health, but some Peruvian politicians have speculated that the elder Fujimori could re-enter politics in 2016. “For grave crimes against humanity, Fujimori was only sentenced to 25 years; there was no permanent disqualification [from politics]because the Public Ministry never asked for one,” said Congressman Heriberto Benítez.