20090324 – Hunger intensifies despite economic growth in Peru


32 percent of Peruvians get inadequate food

Slower economic growth likely to push up hunger rates

By Dana Ford

LIMA, March 24 (Reuters) – More Peruvians went hungry last year despite blazing economic growth, a sign that President Alan Garcia is stumbling in efforts to direct benefits of an impressive expansion to the poor.

The percentage of people in Peru with inadequate nutrition rose by more than 11 percent in 2008, faster than the economy’s 9.8 percent surge, according to the national statistics agency.

Now, 32 percent of Peruvians do not get enough to eat.

The results suggest the poor did not make gains during Peru’s economic boom last year. They also explain in part why the government is so unpopular in rural areas, where hunger rates are highest and leftist politicians like Ollanta Humala, who plans to run for office in 2011, draw support.

“The benefits of the economic boom have not been distributed equally,” said Federico Arnillas, president of a network of civic groups that works on poverty issues with the health and finance ministries.

Garcia, who embraced mainstream economic policies after his first term in the 1980s ended in runaway inflation that made adequate food too costly for millions of people, has said he wants to reduce poverty to 30 percent by the time he leaves office.

When he was re-elected in 2006, Garcia fervently pushed investment and free trade and his recipe to lift incomes seemed to work. Prices for Peru’s metal exports surged and domestic demand rose, contributing to rapid economic growth.

The national poverty rate fell 5 percent in 2007 to 39 percent, a year when inflation was low and public spending on food programs was relatively high.

But in 2008, hunger crept up, as inflation spiked on a global run up in food prices and aid spending fell. Peru’s poverty rate for last year is not yet available, but experts say the government may have lost ground. That could hurt Garcia’s approval rating, now at 34 percent.

“The numbers tell us there is a percentage of the population that is, quite literally, dying of hunger,” said Farid Matuk, a former director of the national statistics agency and a government critic.

In rural areas, where Garcia’s support is weak, the number of people not eating enough rose to 42.5 percent in 2008.

Arnillas said the increase stems from political decisions and pointed to cuts in social spending.

“It’s not a simple resource problem. It’s a political one,” he said of hunger in Peru.

LOOKING AHEAD

Advocates say slower economic growth this year will likely push hunger rates higher and are urging the government to adopt policies that prioritize food security.

Peru’s government is rolling out a $3 billion stimulus package meant to maintain investment and employment levels and increase public work projects. The plan, which aims for economic growth of at least 5 percent, also includes agricultural incentives to boost local food production.

Matuk, the former statistics agency head, said the government is too focused on high macroeconomic growth figures and should have paid more attention to the poor before the global economy entered a crisis.

Arnillas said Peru needs a bigger safety net as private economists forecast growth of less than 1 percent this year.

“We are worried the poor will wind up paying the cost of the crisis,” he said. “This is what happened in the past and we are working to make sure it does not happen again.” (Editing by Terry Wade and Vicki Allen)

http://www.reuters.com/article/idUSN24355472

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