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Lima Consensus

The "Lima Consensus", a term attributed to Harvard University's government professor, Steven Levitsky, refers to a set of economic policies that have predominated in Peru starting from the presidency of Alberto Fujimori. This term was fashioned analogously to the "Washington Consensus." Defined by its neoliberal, deregulatory stance and a export-led growth emphasizing raw materials, the Lima Consensus is based on free market capitalism. Peru's economic elites expressly support these economic policies.

Background
The belief of limited state intervention held by the elite is due to frequent commodity booms, the weakness of the government, social disparities and the lack of national economists. The Government of Peru displayed little interference in the public sector throughout the nation's history since Peru frequently experienced commodities booms that benefitted white elites on the coast instead of the indigenous majority in rural areas, with businesses focusing on bringing commodities from inland Peru to export on the coast. Political scandals resulted in the end of the junta and the Lost Decade of the 1980s began, with President Fernando Belaúnde Terry failing to develop an effective economic policy and his successor Alan García experienced the complete deterioration of the state due to corruption, hyperinflation and the internal conflict in Peru. According to Peruvian sociologist and political analyst Fernando Rospigliosi, Peru's business elites held relationships with the military planners, with Rospigliosi writing that businesses "probably provided the economic ideas which [the military] agreed with, the necessity of a liberal economic program as well as the installment of an authoritarian government which would impose order". Thus, Plan Verde was drafted at the end of the García presidency; the objectives evolved into establishing a civilian-military government with a neoliberal economic policy, the genocide of impoverished and indigenous Peruvians in an effort to remove a drain on resources and the control or censorship of media. Peruvian magazine Oiga reported that following the election, the armed forces were unsure of Fujimori's willingness to fulfill their objectives outlined in Plan Verde and it was reported that they held a negotiatory meeting with him to ensure that Fujimori followed their direction. Fujimori would go on to adopt many of the policies outlined in Plan Verde. == Implementation ==
Implementation
The Lima Consensus as established by the Fujimori administration focused on deregulation and privatization with the goal of establishing a neoliberal economy. The Lima Consensus is a more radical manifestation of Washington Consensus due to its proactive push for economic liberalization and a limited—and often ineffective—level of state regulation or institutional fortification. In 2020, the Congress of Peru refused to ratify the Escazú Agreement regarding environmental rights due to the beliefs surrounding the Lima Consensus, arguing that it would violate the sovereignty of Peru. == Analysis ==
Analysis
The majority of the growth that occurred following the Lima Consensus occurred due to commodity booms, not due to deregulation and free trade. Successful Peruvian politicians often espouse center-left ideas while campaigning to gain the electoral majority and later turn to support the powerful right-wing elites after taking office. The lack of state intervention as promoted by the Consensus has resulted with a weak government with poor performance, with many Peruvians experiencing insufficient basic services such as education, justice and security. The lack of state intervention has also resulted with the increase of corruption, crime, crony capitalism and inequality, with many political officials frequently moving between business and government positions without oversight. Regarding organization, Peru's weak government has also caused poor urban planning throughout the nation. The Consensus has also resulted with environmental degradation as businesses take advantage of deregulation in order to attain more growth. Such shortcomings of the government – promoted by the economic elite – result in a cycle of citizen dissatisfaction with the weak government while the government remains weak due to poor political support. == References ==
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