Page last updated at 22:58 GMT, Tuesday, 27 May 2008 23:58 UK

Peru's poor left behind as growth soars

By Dan Collyns
BBC News, Lima, Peru

The last of the limousines has left the streets of Lima. The road blocks have been removed.

Street vendor
Street vendor Rudas lost money during the summit

Left are a series of statements made in presidential speeches during the recently-ended summit of Latin American, Caribbean and European Union nations, amongst them this from the country's president, Alan Garcia.

"Peru at this moment is the brightest star in the firmament of humanity," President Garcia declares at the summit. "No-one doubts that."

Yet as the dust settles and the Limenos - or Lima residents - return to work, many are still worrying about their futures.

"Our president said the summit was to advance our country, to have more connection with other countries, to have a free market," says Edgar Rudas, 30, as he returns to sell calculators, scissors and digital alarm clocks to motorists waiting for the lights to change at a major junction on one of Lima's arterial roads.

"It seems a good idea," he continues. "But the government needs to do something here to create employment, build factories that give us work. Because the other effect of this free market is that prices have risen."

Illegal sales

As he returns to peddle good-luck plastic rats for the Chinese calendar year, Mr Rudas is no stranger to economic sacrifice.

For him, the summit meant less income because of a three-day national holiday declared in its name.

On a good day, Mr Rudas reckons he can earn up to 30 Peruvian soles ($10; 5), though "the municipality workers sometimes confiscate our goods because it's illegal to be an unregistered street vendor", he says.

"So we come here with just a little and try to sell it as quickly as we can," he explain, all his wares stashed away in a backpack, save for what he has pinned to a piece of cardboard.

"We come here to sell because there's no work," he adds.

Urban boom

The majority of Peruvians, like Mr Rudas, work in what economists call the informal sector. Like millions of others he supports a family.

woman in Peru
Single mother Dioses says children are starving while food is exported

"As Peruvians we all have the desire to move forward," he says. But he also believes in solidarity, and wants Peru to develop "step by step without leaving others behind".

With the economy having grown at a rate of 9% and exports having tripled in the last five years, they have reasons to be optimistic. A tenth of Lima's residents have emerged from poverty in the last five years.

Shopping malls and new high-rise blocks of flat are springing up as part of a construction boom and the rising middle class is quickly developing an appetite for shopping.

Fainting children

But consider Peru region by region and a more nuanced picture emerges.

Leader of the Peruvian Socialist Party, Javier Diez Canseco
Socialist leader Diez wants long-term solutions

Much of the growth has emerged from the country's largely urban coast, a world apart from the impoverished rural highlands where poverty has become an increasingly big problem in recent years.

For them, promises made by world leaders at the summit - to reduce poverty, to reduce the impact of rising food prices, and to tackle climate change - offer little hope.

"Nothing has really changed for the poor, especially in the provinces, except that the food prices have gone up," says Noemi Dioses, a 34-year-old single mother who works as a carer in Lima.

Ms Dioses earns 700 Soles a month ($250; 125), well above Peru's minimum wage, yet she still struggles to make ends meet.

"He's not governing for us," she says, accusing President Garcia of "governing for the big businessmen and the foreign investors".

Free trade

While children in Ms Dioses' son's school are fainting from hunger, the search for a solution remains desperate and urgent.

But those in power cannot agree.

The World Bank's vice president for Latin America and the Caribbean, Pamela Cox, believes European-style tax reform and public spending could help reduce the gap between rich and poor.

Others, for instance Peruvian Socialist Party leader Javier Diez Canseco, is wary of "neo-liberal" economic models that fail both to help Peru advance technologically and to help reduce poverty.

Europe's trade commissioner Peter Mandelson, meanwhile, is urging Latin American countries to "embrace the benefits of globalisation".

"I don't know of a country anywhere in the world that has lifted itself or its people out of poverty by turning its back on international trade," he declares, as Peru, which has already signed a trade deal with the US gets ready to sign another with the European Union.

But Ms Dioses is not convinced the poor will benefit.

"All the lovely fruit and vegetables that are grown here get exported," she says.

"We're not enjoying the fruits of this boom."

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