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Corporate Conquistadores: Peru’s Mineral Extraction Industry Boosts Economy While Rural Poor Continue To Suffer – Analysis

Cindy Arnson

This analysis on Peru’s reliance on the mining sector cites a Wilson Center report, “China, Latin America, and the United States: The New Triangle.”

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When promoting the industry, many mining companies advocate employment opportunities for rural peoples. However, such opportunities do not provide sufficient wages, and workers are exposed to hazardous conditions. Since the physical capital used in mineral extraction is often imported and not developed within Peru, the industry fails to generate significant direct and indirect employment. Today, locals increasingly question whether mining corporations will follow through on their enticement of employment opportunities as, historically, the companies have not kept their promises of a bounty of jobs to follow. They began to doubt that jobs would materialize in 1992 when the Peruvian government, then under the control of President Alberto Fujimori, initially privatized their holdings on the mineral extraction industry. At that time the Shougang Corporation, a Chinese firm that purchased Hierro Peru in the Marcona region, fired local employees and brought in 350 of its own workers, causing widespread anger and distrust by local governments. [7] While companies have since pledged to prioritize jobs for local populations, the suspicion over promises of employment lingers and the nature of the business remains a disappointing source of quality employment opportunities. Simple government quotas or company employment policy cannot easily remedy the lack of available jobs in the mining industry, as it is an inherent complication of an economic system dominated by the extractive sector.

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About the Author

Cindy Arnson

Cynthia J. Arnson

Distinguished Fellow, Latin America Program
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Latin America Program

The Wilson Center’s prestigious Latin America Program provides non-partisan expertise to a broad community of decision makers in the United States and Latin America on critical policy issues facing the Hemisphere. The Program provides insightful and actionable research for policymakers, private sector leaders, journalists, and public intellectuals in the United States and Latin America. To bridge the gap between scholarship and policy action, it fosters new inquiry, sponsors high-level public and private meetings among multiple stakeholders, and explores policy options to improve outcomes for citizens throughout the Americas. Drawing on the Wilson Center’s strength as the nation’s key non-partisan policy forum, the Program serves as a trusted source of analysis and a vital point of contact between the worlds of scholarship and action.  Read more