A South American country with an untested nationalist military leader who rose to notoriety though a failed and deadly military coup against his democratically elected government. "El Comandante!!" Clichéd? Characteristic? Predictable? The World shrugs and grins. "It’s so... South America!"
Okay, Ollanta Humala will be the new president of Perú. We need to give him the respect and opportunity to prove that he can accomplish all he has promised. And he has promised a lot! Most would say, including me, he has promised the impossible. But, it should be interesting to watch the political contortions it will take to attempt the implementation of his grandiose plan, remain a free democratic society and an economically vibrant and solvent country.
Humala's main economic proposals and pledges are:
- A revised constitution for a "new economic model" that keeps sectors including water and sanitation in public hands.
- Review existing free trade agreements, possibly renegotiate them.
- Keep annual inflation at about 2.5 percent with a stable exchange rate.
- The fiscal deficit not to exceed 1 percent of GDP.
- Raise monthly minimum wage to 750 soles ($268) from 600 soles ($214).
- A gradual reduction of the national sales tax to 14 percent or 15 percent, down from current 18 percent.
- Increase total tax intake to 18 or 20 percent of GDP, (currently below 15 percent).
- Reorganize government pro-investment agency PROINVERSION to promote domestic rather than foreign private investment.
- Create internal markets for raw materials and manufactured goods rather than prioritizing exports.
- Greater role for state-run companies.
His other proposals include:
- Community-based control of coca farms rather than eradication of coca leaf crops in the world's No. 2 cocaine producer.
- Give regions and municipalities greater control of finances and social programs.
- Local communities have right to consultation before concessions for extractive industries are granted.
- Strategic alliances with Brazil, Bolivia, Ecuador and Colombia to further Andean integration.
- Create a national reparations fund for victims of political violence in the 1980s and 1990s.
- Guarantee minimum pension to all individuals over 65.
- Create an independent anti-corruption commission.
- Propose media law increasing number of print and broadcast licenses to encourage diverse perspectives.
- Increase education and healthcare spending.
- Find new energy sources, consider nuclear power.
- Export natural gas produced at Camisea fields only when domestic energy needs have been met.
- Guarantee principle of no re-election, one term limit.
Okay! Stop laughing! It's not funny! Humala's proposals are very ambitious!
I know! Comandante Humala says he will follow Brazil’s Luiz Inácio Lula da Silva’s model. Although, as I predicted, there was an appearance and election interview of Huge Chavez on Perú’s nightly newscast last night. But I digress. Little of the above plan resembles Brazil. I know Brazil is often held up as a model of social and economic success in South America but there are many convenient oversights.
Brazil is still a developing country while Perú is on her way out of that designation. Brazil is very much involved in the world marketplace. In recent years Brazil has been experiencing rapid growth, but more recently beginning in late 2010 it has begun to experience escalating inflation and a slowdown. Much of Brazil’s prior growth can be attributed to the exportation and exploitation of natural resources and the rape and pillage of the Amazon rainforest that has been a major international crisis. Much of the workable land is controlled by a handful of wealthy families. Only some parts of Brazil are wealthy while some parts are very poor. There is a very clear borderline where the rich people stop and the poor people live. It goes from small shacks to large towering buildings that the most wealthy people in Brazil live in. Poverty has been greatly reduced in Brazil (still currently at 16 million) mostly by government programs that lift people just above the current statistical definition of poverty. It is decidedly third world in lifestyle and appearance. A third of the population lives in shanty towns called "favelas" which far outnumber middle class and upper class communities, and crime and graffiti is among the worst in the entire world.
Perú is rapidly on her way to first world status. I hope that continues. For that would truly help the poor. Viva Perú. I pray for you!
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Amid Poverty and Decaying Neighborhoods the Drug Business Is Thriving in Brazil
Instead, the area behind the Grajaú Bus Terminal has become a vacant spot accumulating garbage and being occupied by Favela Minhoca (Earthworm Shantytown).
If you would like to buy any sort of drug, like crack, cocaine or marijuana, you can simply go behind the busy bus terminal and talk to one of the many minors selling drugs throughout the day .
Many of them live in the shantytown behind the bus terminal and have dropped out of school in order to support families in a profitable business: drug selling.
Grajaú is not the only point in São Paulo where many minors work for extended shifts selling drugs. Old Downtown São Paulo for decades now has been one of the centers of illegal actions varying from child prostitution to drug dealing. Continued...
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The Humala market reaction. Peru ETF
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