Updated January 10, 2024
Peru: Country Overview and U.S. Relations
Peru is a geographically and ethnically diverse country of
Figure 1. Peru at a Glance
34 million inhabitants encompassing large portions of the
Amazon Basin, the Andean highlands, and the Pacific coast
of South America. Since the early 2000s, Peru has sustained
its democratic institutions and outpaced its neighbors in
terms of economic growth while reducing poverty and
improving security. Some observers argue that endemic
corruption and a growing center-periphery divide threaten
the future of democracy in Peru. Political instability also
appears to be dampening economic growth prospects. The
United States works 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 consider
U.S. options to further strengthen bilateral ties, support
Peru’s democratic institutions and anti-corruption capacity,
reduce rural healthcare and nutritional deficits, and counter
Castillo’s administration, staffed initially by Perú Libre
China’s growing influence in the economy.
party members, faced political and economic headwinds.
Right-leaning parties in Peru’s congress, led by the runner-
Political Situation
up in the 2021 presidential election, Keiko Fujimori
Peru’s 1993 constitution, written under the authoritarian
(daughter of former President Fujimori), alleged that
government of President Alberto Fujimori (1990-2000),
Castillo’s election had been fraudulent and filed an appeal
established a representative form of government with
that delayed the final election results. Threats by Perú Libre
independent executive, legislative, and judicial branches.
ministers to nationalize sectors of the economy rattled
Political and economic power historically have been
markets and contributed to a sharp devaluation of Peru’s
concentrated in the coastal capital of Lima, fueling
currency. Frequent Cabinet reshuffles by President Castillo
resentment among the country’s interior and Andean
did little to address domestic and international skepticism
populations. These groups assert they are excluded from
over his ability to govern Peru and manage its economy. In
decisionmaking with respect to how the wealth generated
mid-2021, anti-Castillo demonstrators held large rallies in
by the country’s export-led economy is distributed.
Lima and other major cities. Opposition parties in Peru’s
congress attempted unsuccessfully to impeach Castillo in
In recent years, Peruvian politics has been shaped by
December 2021 and again in March 2022.
ideologically charged debates over the distribution of
proceeds from the lucrative mining sector, representation of
On December 7, 2022, Castillo attempted what some
rural and Indigenous communities in national politics, and
analysts described as a “self-coup,” when he tried to
the legacy of the authoritarian Fujimori years. Frequent
dismiss congress and rule by decree, reportedly to preempt
presidential corruption scandals have shaken public trust in
a third impeachment vote. Instead, Peru’s congress met and
Peru’s political leadership. The 130-member unicameral
immediately impeached Castillo, who was facing numerous
congress is highly fragmented, and political party
corruption allegations. Castillo was later arrested and
affiliations are fluid, complicating Peruvian presidents’
charged with violating the constitution and corruption.
efforts to build governing coalitions. The constitution’s low
bar to impeachment and removal by congress has further
Boluarte Administration and the Political Crisis
weakened the presidency, leading to the impeachment or
After Castillo’s removal from office, Vice President Dina
forced resignation of four of six presidents since 2018.
Boluarte became Peru’s first woman president under the
constitutional rules of succession. Boluarte, a Lima-based
Castillo Administration and Impeachment
lawyer and civil servant, had been elected on the Perú Libre
General elections in April 2021 brought to office President
party slate. However, she distanced herself from Castillo
Pedro Castillo, of the far-left Perú Libre (Free Peru) party,
and the party once in office. Boluarte faced an immediate
and a new congress with representatives from 10 parties.
challenge to her authority from Castillo’s rural and
Castillo drew support mainly from Peru’s rural areas,
Indigenous supporters, who considered the former president
including the Andean south, where lower-income and
a champion of their rights. In the days following Castillo’s
Indigenous voters responded to his campaign pledges to
arrest, tens of thousands of his supporters staged protests
alleviate poverty and identified with his campesino (rural
across much of Peru’s interior. Protesters’ demands
peasant) background.
included Castillo’s release, President Boluarte’s
resignation, early elections, and the convening of a
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Peru: Country Overview and U.S. Relations
constitutional convention. In southern Peru, protesters set
fertilizer and food, Peru has seen its domestic food prices
up hundreds of roadblocks and occupied several dozen
rise in response to surging costs internationally.
regional airports, crippling much of the economy.
China’s Presence in Peru’s Economy
In response to the protests, Boluarte declared a state of
Foreign infrastructure investment in Peru by firms linked to
emergency in southern Peru and ordered the armed forces
China has grown substantially since the 2010s, a trend
and Peruvian National Police (PNP) to clear the roads and
accelerated by Peru’s accession to China’s Belt and Road
restore airport services. As the protests grew, clashes
infrastructure investment initiative in 2019. Chinese state-
between protesters and police became increasingly violent.
owned firms have gained controlling equity stakes in
In two separate incidents in December 2022 and January
several Peruvian critical infrastructure companies, including
2023, the PNP and soldiers allegedly fired live rounds at
in large-scale mining and electricity generation and
unarmed protesters and bystanders, killing dozens,
distribution companies. Of particular concern to U.S.
according to Human Rights Watch. In November 2023,
Peru’s attorney g
officials, the Chinese state-owned firm COSCO Shipping is
eneral, Patricia Benavides, filed a
building a $3.6 billion container port near Lima. Peru has
constitutional complaint against President Boluarte for her
acknowledged U.S. concerns and has placed some
alleged role in ordering the violent repression of protests.
Peru’s Justice Oversight Board
transactions with Chinese firms under anti-trust review.
later suspended Benavides
on suspicion of corruption, potentially derailing the
U.S.-Peru Relations
complaint.
The United States has maintained close bilateral ties with
President Boluarte also faced backlash from left-leaning
successive Peruvian governments, including that of
governments in the region that had supported former
President Boluarte. Bilateral U.S. assistance aims to reduce
President Castillo. The presidents of Argentina, Bolivia,
the production and trafficking of cocaine from Peru,
Colombia, and Mexico criticized Castillo’s impeachment
mitigate the impact of transnational crime, and increase
and detention and Peru’s handling of the protests. Those
citizen security by strengthening Peru’s criminal justice
governments also delayed their recognition of the Boluarte
system. It also seeks to combat food insecurity and promote
administration, straining diplomatic relations.
sustainable livelihoods, support Peru’s efforts to provide
humanitarian assistance and integration for the 1.5 million
Many analysts initially predicted that Boluarte would be
Venezuelan refugees and migrants residing in Peru, and
unlikely to complete the remainder of President Castillo’s
strengthen governance and social inclusion.
2021-2026 term, given her lack of party support and
widespread popular opposition. Some observers attribute
The Biden Administration requested $107.6 million in
the government’s survival to a political truce between
bilateral foreign assistance for Peru for FY2024, $1.5
Boluarte and the conservative parties in congress, as well as
million less than allocated to Peru in FY2022. The FY2024
to the military’s and PNP’s support for the government.
request includes $55 million in development assistance;
Responding to protester demands, some Peruvian
$8.5 million for Global Health Programs; $41.3 million in
lawmakers introduced bills to hold early general elections
International Narcotics Control and Law Enforcement
in 2024, including a proposal backed by Boluarte. The
assistance; $2 million in Nonproliferation, Anti-terrorism,
Peruvian congress, whose members cannot be reelected, has
Demining, and Related Programs; and $800,000 in
repeatedly rejected the early elections bills.
International Military Education and Training funding. In
mid-March 2023, the U.S. Agency for International
Economic and Social Conditions
Development (USAID) notified Congress it intended to
Since the early 1990s, Peru’s economy has been one of the
obligate $8 million in FY2023 support to Peru from the
strongest macroeconomic performers in Latin America,
Complex Crises Fund, which USAID employs to mitigate
characterized by an open investment environment, robust
conflict in the face of unforeseen crises or violence.
commodities exports, and low public debt. Under the 2009
Some Members of Congress have called on the Biden
U.S.-Peru Trade Promotion Agreement, U.S. trade with
Administration to halt all security assistance to Peru until
Peru more than doubled, from $9 billion in 2009 to over
the Administration can confirm that Peruvian officials
$22 billion in 2022. Peru also halved its poverty rate, from
responsible for human rights abuses are being held
42% in 2007 to 20% in 2019. Peru was one of the countries
accountable. In light of these and related allegations of
most affected by the Coronavirus Disease 2019 (COVID-
excessive use of force by Peruvian police and military,
19) pandemic in terms of health and economic impacts and
Congress may consider exercising additional oversight over
the erosion of the social gains achieved in the previous
U.S. law enforcement assistance. Congress also may
decade, according to the World Bank.
consider whether to revise U.S. economic and humanitarian
The pandemic caused a sharp rise in unemployment, a spike
assistance programs intended to support Peru’s efforts to
in poverty, and an 11% contraction in gross domestic
expand economic and social development, increase public
product (GDP) in 2020. The economy recovered in 2021,
integrity to reduce corruption, and strengthen sustainable
with 13.3% GDP growth, but growth slowed to 2.7% in
natural resource management.
2022 and an estimated 1.1% in 2023, according to the
International Monetary Fund. Observers attribute the
June S. Beittel, Analyst in Latin American Affairs
slowdown to tightening global financial conditions, reduced
Ramon Miro, Analyst in Latin American Affairs
private investment due to political instability, and cooling
IF12372
demand for Peru’s mineral exports. A major importer of


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Peru: Country Overview and U.S. Relations


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https://crsreports.congress.gov | IF12372 · VERSION 5 · UPDATED

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