April 4, 2023
Peru: Country Overview and U.S. Relations
Since 2001, Peru has emerged from a period of domestic
campaign pledges to alleviate poverty and identified with
terrorism, authoritarian rule, and erratic economic
his campesino (rural peasant) background.
performance to one of improved citizen security,
democratic—though often unstable—governments, and
sustained market-oriented economic growth. The United
States has worked closely with Peru to stem narcotics-
related transnational crime, promote bilateral trade and
sustainable livelihoods for Peruvians, and advance shared
democratic values. Members of Congress may be interested
in considering U.S. options to strengthen democratic
institutions and address rising poverty and food insecurity.
Political Situation
Peru’s 1993 constitution, written under the authoritarian
government of President Alberto Fujimori (1990-2000),
established a representative form of government with
independent executive, legislative, and judicial branches
and strong protections for individual rights. The
constitution maintains a centralized state structure, which

historically has contributed to the concentration of political

and economic power in the coastal capital of Lima and has
President Castillo took office amid a fragile recovery from
fueled resentment among the country’s interior and Andean
the Coronavirus Disease-2019 (COVID-19) pandemic. By
populations. These groups assert they are excluded from
mid-2021, Peru had experienced the world’s highest
decisionmaking with respect to how the wealth generated
COVID-19 mortality rate, a ranking it maintained at the end
by the country’s vibrant, export-led economy is distributed.
of March 2023 with over 650 deaths per 100,000
population, according to Johns Hopkins University’s
In recent years, Peruvian politics have been characterized
Coronavirus Resource Center. Castillo’s government also
by ideologically charged debates over the distribution of
faced political headwinds, including allegations by the far-
proceeds from the lucrative mining sector, representation of
right parties in congress that his election had been
rural and Indigenous communities in national politics, and
fraudulent. Castillo’s first Cabinet, dominated by far-left
the legacy of the authoritarian Fujimori years. Widespread
Perú Libre members, collapsed after three months amid
corruption and inadequate public services have diminished
political uncertainty and nationalization threats that rattled
public trust in Peru’s political leadership. The 130-member
markets and sharply devalued Peru’s currency (the Sol).
unicameral congress is highly fragmented, and political
Subsequent Cabinets included more moderate ministers
party affiliations are fluid, complicating Peruvian
from other parties of the Peruvian left, as well as
presidents’ efforts to build governing coalitions. The
independent members. Nevertheless, critics derided
constitution’s low bar to impeachment and removal by
Castillo’s repeated Cabinet reshuffling—a minister was
congress has further weakened the presidency, leading to
replaced every six days, on average—and his appointment
the impeachment or forced resignation of four of six
of controversial political figures, including some under
presidents since 2018.
investigation for corruption. In December 2021, Peru’s
congress launched the first of three impeachment attempts
Castillo Administration and Impeachment
against Castillo on the grounds of “moral incapacity.”
General elections in April 2021 brought to office President
Pedro Castillo, a little-known teacher and union leader from
During 2022, Peruvian farmers and poorer households were
Peru’s north, and a new congress with representatives from
hit by soaring prices for fuel, fertilizer, and other imported
10 parties. Castillo had been one of 18 presidential
commodities whose supply was disrupted due to spillover
candidates competing in the 2021 elections. He won a
effects from Russia’s invasion of Ukraine. In late March,
runoff in June 2021, leading the far-left Perú Libre (Free
large anti-government protests erupted in Lima as many
Peru) party to a narrow victory over Keiko Fujimori
Peruvians blamed their economic hardship on the president.
(daughter of former President Fujimori) of the far-right
Opposition members of congress attempted a second,
Fuerza Popular party. Castillo drew support mainly from
failed, impeachment, again alleging that Castillo had
Peru’s rural areas, including the Andean south, where
engaged in corruption and was morally unfit to govern. On
lower-income and Indigenous voters responded to his
December 7, 2022, facing a third impeachment vote, which
he was widely expected to survive, Castillo attempted a so-
https://crsreports.congress.gov

---

Peru: Country Overview and U.S. Relations
called self-coup. In a move that observers likened to former
public spending. Under the 2009 U.S.-Peru Trade
President Fujimori’s assumption of dictatorial powers 30
Promotion Agreement, U.S. trade with Peru more than
years earlier, Castillo addressed the nation to announce the
doubled, from $9 billion to over $22 billion in 2022. Peru
dissolution of congress and the judiciary and his intention
also halved its poverty rate, from 42% in 2007 to 20% in
to rule by decree. Instead, within hours, the Cabinet
2019. The pandemic caused a sharp rise in unemployment,
resigned, the Supreme Court invalidated Castillo’s
a spike in poverty, and an 11% contraction in gross
declaration, and congress voted to impeach Castillo for
domestic product (GDP) in 2020. According to the
violating the constitution. Unlike Fujimori, Castillo failed
Economist Intelligence Unit, the economy recovered in
to gain the support of the armed forces, which, together
2021, with 13.6% GDP growth, but slowed to 2.7% growth
with the Peruvian National Police (PNP), refused to move
in 2022 and a projected 1.9% in 2023. Economic activity
against congress. Instead, the PNP arrested Castillo as he
has faltered because of supply disruptions associated with
attempted to flee to the Mexican embassy. Peru’s attorney
the war in Ukraine, tightening global financial conditions,
general ordered Castillo placed in pretrial detention for up
and Peru’s political crisis. As a major importer of fertilizer
to 36 months while authorities investigate his actions on
and food, Peru has seen its domestic food prices rise in
December 7, as well as his alleged role in corruption.
response to surging costs internationally. Until early 2022,
Russia supplied half of Peru’s fertilizer imports; shortages
Boluarte Administration and the Political Crisis
pose a major risk to the agricultural sector. About half of
With Castillo’s removal from office, Vice President Dina
Peru’s population, according to a November 2022 United
Boluarte became Peru’s first woman president under the
Nations study, currently suffers from lack of reliable access
constitutional rules of succession. Boluarte, a lawyer and
to food, and poverty remains above pre-pandemic levels.
civil servant from the outskirts of Lima, had been elected
on the Perú Libre party slate but had distanced herself from
U.S.-Peru Relations
Castillo and the party once in office. She faced an
The United States has maintained close bilateral ties with
immediate challenge to her authority from Castillo’s rural
successive Peruvian governments, including that of
and Indigenous supporters, who considered the former
President Boluarte. Bilateral U.S. assistance aims to reduce
president a champion of their rights. In the days following
the production and trafficking of cocaine from Peru,
Castillo’s arrest, tens of thousands of his supporters staged
mitigate the impact of transnational crime, and increase
protests across much of Peru’s interior. Protesters’ demands
citizen security by strengthening Peru’s criminal justice
included Castillo’s release, President Boluarte’s
system. It also seeks to combat food insecurity and promote
resignation, early elections, and the convening of a
sustainable livelihoods; support Peru’s efforts to provide
constitutional convention. In southern Peru, protesters set
humanitarian assistance and integration for the 1.5 million
up hundreds of roadblocks and occupied several dozen
Venezuelan refugees and migrants residing in Peru; and
regional airports, crippling much of the economy.
strengthen governance and social inclusion.
In response to the protests, Boluarte declared a state of
The Biden Administration requested a total of $107.6
emergency and ordered the armed forces and PNP to clear
million in assistance for Peru for FY2024, $1.5 million less
the roads and restore airport services. In her early public
than requested in FY2023. The FY2024 request includes
remarks, Boluarte appeared to accept the Peruvian far-
$55 million in development assistance; $8.5 million for
right’s interpretation of the protests as a terrorist assault on
Global Health Programs; $41.3 million in International
democracy instigated by foreign agents. As the protests
Narcotics Control and Law Enforcement assistance;
grew, clashes between protesters and police became
$2 million in Nonproliferation, Anti-terrorism, Demining,
increasingly violent. On December 15, 2022, PNP and army
and Related Programs; and $800,000 in International
units defending an airport in the southern city of Ayacucho
Military Education and Training funding. In mid-March
allegedly opened fire on civilians attempting to occupy the
2023, the U.S. Agency for International Development
facility, resulting in 10 civilian deaths. In January 2023, in
(USAID) notified Congress it intended to obligate
the southern department of Puno (see map), the PNP and
$8 million in FY2023 support to Peru from the Complex
soldiers allegedly fired indiscriminately on protesters,
Crises Fund (CCF), which USAID employs to mitigate
killing 17, with one officer killed. In response to alleged
conflict in the face of unforeseen crises or violence.
excessive use of force by the armed forces and PNP, on
January 10, Peru’s attorney general opened an investigation
Some Members of Congress have called on the Biden
into President Boluarte and selected Cabinet members’
Administration to halt all security assistance to Peru until
alleged role in the violence. By mid-March, Peru’s human
the Administration can confirm that Peruvian officials
rights ombudsman estimated that 66 people had died and
responsible for human rights abuses are being held
more than 1,300 were injured as a result of anti-government
accountable. In light of these and related allegations of
clashes and blockades.
excessive use of force by Peruvian police and military,
Congress may consider seeking additional oversight over
Economic and Social Conditions
State Department-provided law enforcement assistance.
Since the early 1990s, Peru has pursued market-oriented,
Congress also may consider whether to review USAID
export-led growth policies and measures to narrow income
assistance levels to ensure funding adequately supports
disparities and address social exclusion. Peru’s economy
Peru’s efforts to expand economic and social development,
has been one of the strongest macroeconomic performers in
increase public integrity to reduce corruption, and
Latin America, characterized by an open investment
strengthen sustainable natural resource management.
environment, robust commodities exports, and moderate
https://crsreports.congress.gov

---

Peru: Country Overview and U.S. Relations

Ramon Miro, Analyst in Latin American Affairs
IF12372
June S. Beittel, Analyst in Latin American Affairs


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF12372 · VERSION 1 · NEW

---