How Peru’s Drug Trade Is Threatening Its Economic Growth

Peru’s recent economic boom and political stability mask a series of severe long-term challenges. And the country’s role in the international narcotics trade is a special cause for concern.

Peru has been hailed an emerging market success story, with more than a decade of GDP growth in excess of 6 percent. While booming mining exports have been the overwhelming driver of this, the shopping malls and SUVs in Lima and other major cities are evidence that domestic demand has also been buoyant.

Since the fall of the authoritarian government of Alberto Fujimori in 2000, Peru has enjoyed an unusually long period of political stability, with orderly changes of democratically elected government in 2006 and 2011, and continuity in economic policy.

Today, Peru is the world's second largest producer of coca, after Colombia.