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Hunger is entrenched in Peru


The Andean economy has doubled the number of people in a condition of food insecurity: there are already 16.6 million

Hunger is an old acquaintance.

We are used to feeling it at least three times a day: "There is nothing more frequent, more constant, more present in our lives," says Martín Caparrós in his book

About him Hunger


There is, however, a whole world between those who can satisfy it and those who are left with a half-empty or half-full stomach, wanting more or wanting something better to put in their mouths.

And in the latter is Karina Vilchez and her family in Cura Mori, a district in northeastern Peru.

Since the pandemic broke out, this 30-year-old woman and her husband (the breadwinners of a family of seven: two daughters, a grandfather, a sister and a niece) have reduced the food they put on the table.

"We have to minimize expenses," she says over the phone.

There are days when they only have two full meals (breakfast and lunch) and dinner is half.

"Now we make a lunch: we buy or make tortillas and make an infusion, which is a little cheaper than coffee."

Other days she buys less rice, oil or sugar.

Today —with rampant inflation and high internal political uncertainty— the situation for Karina and many others is even more complicated.

Peru has become the country with the highest food insecurity in South America.

Some 16.6 million people are in this condition (50.5% of the population), twice as many as before the pandemic, according to the FAO.

"A vertiginous increase never before observed in the country," says the institution.

"There is talk of food insecurity when there is a lack of regular access to enough nutritious and safe food for normal growth and development," explains Mariana Escobar, representative of the organization in the Andean country.

Some 10 million people suffer from moderate food insecurity: “The quantity of food decreases,

you skip meals and have less and less access to healthy foods because they are very expensive,” Escobar highlights.

At the extreme are more than six million Peruvians whose situation is serious: "No food is consumed for a day or more."

"Peru is experiencing the highest level of hunger in the last seven years," according to an analysis by the NGO Ayuda en Acción, which in recent months has helped Karina with training so that she could be employed.

"We see more hunger, and as such, greater needs of population groups in vulnerable situations," says William Campbell Falconi, director of the organization in Peru.

The accelerated increase in poverty, which has not yet returned to pre-pandemic levels, is taking its toll on those most in need.

"The toughest years of the health crisis left us with 30% of citizens [3.3 million people] without the ability to supply themselves with the minimum," says Carolina Trivelli, principal investigator at the Institute of Peruvian Studies (IEP).

Currently, that percentage stands at 28.3%, still well above its 2019 level (20.2%),

After a strong recession in 2020 (GDP fell 11%, the biggest decline in 30 years), the economy rebounded 13.3% in 2021. But it was not enough to overcome its poor level.

The expectation is that the country will take time to recover from the blow.

“Our central scenario places us on a poverty trajectory between 26% and 27% (although closer to 27%) for the 2022-2023 period, assuming a growth of 3.3% in 2022 and 2.1% in 2023″, warns Álvaro Monge, an economist at the consulting firm Macroconsult.

Starting next year, if growth is 2.5%, the poverty rate could be 24% in 2026. But if growth is zero, the percentage will rise to 28%, says Monge.

“Although GDP growth is a necessary condition to help reduce poverty levels, this alone has not been enough to mitigate the social and labor effects of the pandemic, which are profound and closely linked to the structural problems of inequality, informality and vulnerability”, explains Mario Cimoli, Acting Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC).

In Peru, although the number of employed persons has practically returned to its pre-crisis levels, this fact is largely associated with low-quality jobs in the informal sector, where more than 73% of workers are employed.

In the countries of the area that have recovered the pre-pandemic employment rate, or are very close to it, such as Argentina, Colombia or El Salvador,

the informality rate is not higher than in 2019, according to the ILO.

Peru is the exception, since its informality rate before the health emergency was 71.1%.

This low quality of employment has led to a reduction in income at the household level.

At the end of 2021, the average salary was still 13% below that recorded in 2019, says the World Bank.

“The problem is one of purchasing power”, highlights Trivelli.

“We earn the same and everything costs more.

If before it was not enough, now less”.

the average salary was still 13% below that recorded in 2019, says the World Bank.

“The problem is one of purchasing power”, highlights Trivelli.

“We earn the same and everything costs more.

If before it was not enough, now less”.

the average salary was still 13% below that recorded in 2019, says the World Bank.

“The problem is one of purchasing power”, highlights Trivelli.

“We earn the same and everything costs more.

If before it was not enough, now less”.

Political instability

The economic scenario, say the experts consulted, is further complicated by a government, that of Pedro Castillo, that has not yet come together.

“We are seeing the costs of improvisation.

With multiple changes of ministers.

We have a government that does not articulate its public policy in a competent manner.

There is no cohesion in their agenda”, assures Jaime Reusche, an analyst at Moody's.

Above all, the rating agency's expert highlights, political instability is holding back the arrival of investments in mining, one of the pillars of the economy, and which in the last decade has represented 23% of foreign direct investment (FDI) in the country. country.

Peru is the second producer of copper and zinc, the third producer of silver and the tenth of gold.

According to IEP estimates, for each direct job in mining activity, an additional 6,

25 jobs in the rest of the economy: one due to the indirect effect, 3.25 due to the induced effect on consumption and 2 due to the induced effect on investment.

"Political instability is inhibiting growth, that there is greater dynamism in the private sector, which is what generates more jobs and amplifies the challenges that may come from the external context," emphasizes Reusche.

External risks stemming from ongoing geopolitical tensions, continued supply chain disruptions and an abrupt slowdown in China, Peru's main trading partner, could dampen the country's growth, according to the IMF.

But while a new blow to the economy arrives (or not), Karina Vilchez does not lose hope that her situation will improve: "We hope that at the end of the tunnel we can see the light," she concludes.

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Source: elparis

All business articles on 2022-09-27

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