The World Bank defines Peru as a country having upper-middle income, yet its capital city, Lima, is not free from the woes of poverty. With a population of more than 10 million, Lima is affected by a large income discrepancy and is susceptible to many natural disasters. To fully understand the circumstances, here are 10 facts about poverty in Peru’s capital:
10 Facts About Poverty in Lima
- The rate of poverty in Lima is currently 13.3 percent, which is 2.3 percent higher than the rate in 2016. However, compared to other Peruvian urban regions, Lima’s spike in the poverty rate is the lowest.
- Peru has an extreme poverty rate of 3.8 percent, which is defined as the inability to purchase a basket of basic food and beverages. However, this rate is only 0.7 percent in Lima, a lower number than the 1.2 percent prevalent in other urban areas of Peru.
- Lima’s slowing economic activity can be attributed to political turmoil. President Pedro Pablo Kuczynski, who was elected in 2016, was succeeded by Martin Vizcarra in early 2018 amidst allegations of corruption. Big banks, such as JP Morgan, claim that this “political noise” has made it difficult for investors to trust businesses in the region.
- While malnutrition continues to be a problem in Peru, Lima combatting this occurrence through community kitchens. Such kitchens provide food to half a million people in Lima alone and is organized by the local effort of over 100,000 women. These kitchens are a big part of Peru’s efforts to reduce hunger and malnutrition.
- Another fact about poverty in Lima is that there is a large income disparity, which has led to problems with access to clean water. While the rich have cheap water pumped into their homes, the poor pay almost ten times more for water to be delivered by lorries.
- Lima has to cope with heavy rainfall and floods due to its coastal location. These are often responsible for destroying most of the infrastructure, which was the case with the most recent flood — dubbed “coastal El Nino” — that inflicted $3.1 billion worth of damage. Lima, like many other coastal cities, had to share the burden, which was approximately 0.5 percent of Peru’s GDP in 2017. These natural disasters make it harder for residents to break out of the poverty cycle by capitalizing on infrastructure.
- Lima’s geography also poses as a restriction for city expansion. The city is a desert strip bounded by the Pacific Ocean, the Andes and three valleys. There is hence limited space available to build infrastructure and increase efficiency.
- Lima had a high employment rate of 93.4 percent in 2017. Of the employed population, however, 34.3 percent were still underemployed, suggesting that many did not have a job matching their skill level. Interestingly, Lima has experienced a 0.5 percent decrease in unemployment.
- Another important fact about poverty in Lima is that the divide between the rich and the poor has led to the rise of several squatter settlements, called “pueblos jovenes” (young towns) or “barriadas” (shantytowns). Currently, over 35 percent of Lima’s population lives in such squatter settlements.
- Despite many challenges, Lima’s residents are well-educated. About ninety-eight percent of the population older than 15 years are educated, of which 43 percent have higher education from post-secondary institutions.
Although Peru itself faces several issues related to poverty, Lima has found ways to ameliorate the conditions and overcome difficulties. In the changing political and economic landscape of Lima, residents prove that there is both hope and a means to achieve such statuses. These 10 facts about poverty in Lima are but a testament to this city-wide occurrence.
– Sanjana Subramanian