Peru Boom Spurs Growth of Middle Class (Assignment 1)
Michael Davis
SOC 300
January 3, 2012
Professor Ruben E. Saroukhanian

Peru Boom Spurs Growth of Middle Class
Peru is a middle country in Latin America; it was not one of the superrich or really poor countries. Now Peru is one the fastest growing Latin countries; in the city of El Salvador which uses to be known for indigenous Peruvians is now a mega city. This city has all the bells and whistle, the main attraction is the Mega Plaza Express shopping center. The Mega Plaza Express shopping center has movies, dinner, lights, electronic stores and much more; the local’s lover the current scene and life the city has now.
Over the last couple of years the price of gold and copper has raise and the demand has become very popular with Asian countries. “The Andean country’s gross domestic product rose 6.7 percent year on year in October 2012, marking 38 consecutive months of growth” (Schipani, 2013). Peru growth has notice a letdown in 2010 to 8.8 but that has not stop Peru from becoming one of the top growing Latin American countries. “Sales in 2012 topped $5.3 billion, an increase of 20 percent over the previous year. The increase was due not only to the existence of centers such as Mega Plaza Express” (Schipani, 2013). The Peruvians average $2 dollars a person in his or her pocket has reduced to 28 percent over the last ten years. One of the goals of the Peru President is to reduce/cut poverty to least then 15 percent before 2015. The president also has set other goals such as increasing minimum wages and retirement pension. “Overall, wages have grown at an annual rate of between six and seven percent in the past decade” (Schipani, 2013).
Just a short 20 years age this same area was a lonely hilly deserted area made up of blue collared jobs like factory and non-commodity exporters. Under the current president the city has seen great growth with sales, cheaper auto loans and mortgages. The largest bank in the city has seen great increase also; now they average one new customer daily and more cash in there pockets.
The reality to this story is a couple of things; yes it is great to see Peru growing but a t what cost and are they really monitoring the state of the growth. Some economists are still wary about the Peru financial growth; saying the growth is too fast. The economists are looking at the internal mechanism and see that much of the economy is still untaxed and remains informal. The hand writing is on the wall for a strong collapse because the currency has risen too fast too quickly. The sudden but strong growth in 16 years can really be the downfall by hurting the blue collar labor force in the factories and non-commodity exporters. When you see the banks borrowing large amounts of money (13 billion dollars), just to try to keep up with the currency growth; that is the recipe for a depression.
Will is depression happen maybe not but the risk is there and the signs are there. Recent history in the United States; the homes boom is a good example of the economy growing too fast. The United States has drawn the blueprint for the rest of the world on what not to do when your economy looks too good to be true. Every country wants there economy to prosper and the poverty rate to be at low percentage; but at what cost. With fast financial growth you have to monitor the growth to ensure the system becomes unbalance. When your dollar has no value but everything else around the dollar continue to grow; that is your first red flag.
Financial growth, every country wants the money but can your country handle the growth. Do you have the right leaders in your government; do you have the right internal mechanism to make the right choices? Last but not least; will your country embrace the financial growth and be able to handle the growth or will they be out of control?

References
Andres Schipani, (2013), Washington Post, “Peru Boom Spurs Growth of Middle Class” http://www.washingtonpost.com/world/the_americas/peru-boom-spurs-growth-of-middle-class/2013/01/09/7d80faf8-5a7f-11e2-beee-6e38f5215402_story.html