Lima Consensus

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The "Lima Consensus" (Spanish: consenso de Lima), a term attributed to Harvard University's government professor, Steven Levitsky,^[1][2] refers to a set of economic policies that have predominated in Peru starting from the presidency of Alberto Fujimori. This term was fashioned analogously to the "Washington Consensus."^[1] Defined by its neoliberal, deregulatory stance and a export-led growth emphasizing raw materials, the Lima Consensus is based on free market capitalism. Peru's economic elites expressly support these economic policies.^[3]

In 1990, Fujimori's government applied a shock therapy prescribed by Hernando de Soto, colloquially known as "fujishock."^[4] Consequently, these measures bolstered Peru's attractiveness for foreign portfolio investment. While the early 2000s saw a regional shift towards left-wing governments, termed as the 'pink tide,' the Lima Consensus remained largely unchallenged since its inception in the early 1990s. Notwithstanding, the presidencies of Pedro Castillo^[5] (2021-2022) and, to some extent, Ollanta Humala (2011-2016), are noted for their opposition.^[6] Yet, the prevalence of the Consensus persisted.^[6][7]

Critics argue that it has amplified economic inequality, crony capitalism, contributed to rising crime rates, and political corruption in Peru. They also argue that labor rights have suffered,^[3] and been sidelined in favor of market liberalization and capital interests,^[1][2] while supporters, often referred to as free market fundamentalists, consider economic interventionism to be socialist or communist.^[1][8]