My employer--open retail outlets in Peru

My employer – Walmart - is interested in opening up several retail outlets in Peru. However, top management is concerned. Peru has a reputation for being a difficult place to do business. Although it is a democracy, democratic governance is weak and the country is bedeviled with social conflicts. I have been tasked by my employer to do a descriptive analysis of a fundamental factor in Peru that has contributed to social, cultural and economic conflict in the country. Fortunately, when I was in college, I took governments of the world course that prepared me to accomplish such a task. I identified poverty as a key element in understanding conflicts in the country. In this short essay, I will describe poverty in Peru and briefly analyze how it ties into socio-economic conflicts. In the first paragraph, I provide an overview of poverty in Peru and in the second paragraph I link the poverty to the inequality between ethnic groups and regions as a source of conflict.

Peru’s economic growth has lasted for fifteen years. The country enjoyed its GDP growth of 5.3%. According to the analytic report by IMF, the rate is estimated around 5.5% in 2014 and 7.5% in 2015. Peru becomes the most rapid-growing country in South American countries. With its rapid-developing economy, poverty became the biggest problem of the country. There are severe inequality problems among urban and rural areas. Rural poverty is nearly 60 percent and extreme poverty in rural areas is 23 percent. The country’s half wealth is accumulated in the capital, Lima while the population of the city only accounts for a third of the whole country. And half of the population doesn’t have access to sanitation, while nearly a third doesn’t have potable water at home. From 2006-2013, ten thousand people can be only allotted 15 ward beds and 12 doctors on average. In 2013, People with middle-class or upper-class monthly income only occupy 20% of the whole population. 

The poverty issue leads to many social conflicts in Peru. Because of the extremely unbalanced economy, there is large gap between the rich and the poor. Accordingly, crimes such as drug trafficking, smuggling, stealing or robbing were ubiquitous in the country especially in metropolis like Lima. Gun problem is also a big issue because many individuals’ guns are not registered even though they are entitled to purchase only by permission. Conflicts among ethnic problems were serious either. Peru is a country with multi-ethnic peoples. Native Indians makes up 45% of the whole population. To reduce poverty, the government allows companies to develop natural resources in tropical rainforest, which greatly threatens the country’s ecological environment. To preserve the land where they have been raised for so many generations, the Indian people have initiated numerous protests against the government’s decision. Many native people and policemen have lost their lives in the violent conflicts. 

With the stubborn poverty issue and other conflicts resulting from poverty, Peru has bearing fastest economic growth in South Africa and the government have made strenuous efforts to reduce poverty. The cabinet has worked out many reform policies to tackle the problem. Besides, Peruvians have large potential in consumption. In 2013, individual Peruvians consumed 351.6 billion sols, which accounts for 63% of the country’s GDP. To sum up, I recommended to my employer to open retail outlets in Peru. 

  The statistics mentioned in my essay is from “Guide to Investment in Peru” in the official website of Chinese Outward Investment and Economic Cooperation.
URL:http://fec.mofcom.gov.cn/gbzn/guobiezhinan.shtml?COLLCC=2503242495&COLLCC=1462524082&

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