Editing Economy of Peru (section)

===Narcotics===

====Background====
[[Coca]] has a long history of cultivation in the Andes, and has always been a traditional part of Peruvian life. However, the [[narcotic]] properties of coca were known only locally until 1786, when [[Lamarck]] listed the leaf in his botanical encyclopedia.<ref name="McCoy">McCoy, Alfred W (2004). ''Dangerous Harvest.  The Stimulus of Prohibition: A Critical History of the Global Narcotics Trade'', p. 25. Oxford University Press, New York. {{ISBN|0-19-514319-1}}.</ref> After the arrival of the Spanish, coca cultivation increased and its use became more common and widespread.<ref name="MacGregor">MacGregor, Felipe E. (ed.) (1993). ''Coca and Cocaine: An Andean Perspective'', p.109. Greenwood Press, US.  {{ISBN|0-313-28530-6}}.</ref> Since 1543, coca has been internationally recognized for its trading value, and regulations imposed upon it have attached increasing economic importance to the plant.<ref name="MacGregor" /> Exchange of the coca leaf between consumers in the highlands and growers in the low-lying hills has gone on for at least the last millennium, strengthening local economic ties.<ref>Salisbury, D.S. and C. Fagan (2011).  "Coca and conservation: cultivation, eradication, and trafficking in the Amazon borderlands."  ''GeoJournal'' {{doi|10.1007/s10708-011-9430-x}}.  URL: http://upperamazon.org/ Retrieved 28 January 2012</ref>  Between 1884 and 1900, coca and cocaine grew in popularity for medical purposes and mass consumption in the United States.  From 1905 to 1922, anti-cocaine sentiments in the US resulted in criminalization of both coca and cocaine. It was not until the 1920s that US diplomats began to extend drug prohibitions internationally.<ref>Gootenberg, Paul (2004). "Secret Ingredients: The Politics of Coca in US-Peruvian Relations, 1915–65." ''Journal of Latin American Studies'' {{doi|10.1017/S0022216X04007424}} Retrieved 27 January 2012.</ref>

====Current trends====
The Peruvian coca and [[cocaine]] industry is as huge as it is today because of advanced industrial nations’ demand for drugs.  This high demand has created a framework of dependence on "coca-dollars" and on US drug policy.<ref>{{cite journal |last1=Morales |first1=Edmundo |year=1990 |title=The Political Economy of Cocaine Production: An Analysis of the Peruvian Case |journal=Latin American Perspectives |volume=67 |issue=4 |page=91 |doi=10.1177/0094582X9001700406 |s2cid=145443713}}</ref> Money from cocaine trafficking feeds local economies, supports inflation, and even causes social changes such as cocaine smoking among indigenous Peruvians.<ref>Morales, Edmundo (1989). ''Cocaine: White Gold Rush in Peru'', p. xv.  The University of Arizona Press, US. {{ISBN|0-8165-1066-0}}.</ref> Coca farming today is still a significant source of income for peasants, as it accounts for 48% of total net family income in the high coca-growing Apurímac River region.<ref name="Dammert">{{cite journal |last1=Dammert |first1=Ana C |year=2008 |title=Child labor and schooling response to changes in coca production in rural Peru |url=http://www.iza.org/conference_files/chldc2007/dammert_a3161.pdf |journal=Journal of Development Economics |volume=86 |pages=164–180 |doi=10.1016/j.jdeveco.2007.06.007 |citeseerx=10.1.1.175.2259 |s2cid=15767732}}</ref> In an effort to reduce drug use in America, for the past 50 years the US government together with the United Nations have been waging a [[war on drugs]].<ref name="McCoy" /> The US Drug Control Program maintains that "eliminating the cultivation of illicit coca and opium is the best approach to combating cocaine and heroin availability in the US."<ref>US Office of National Drug Control Policy (1998) 1, 23, 28.</ref>

With US government cooperation, the Peruvian Government installed the National Plan for the Prevention and Control of Drugs in 1995.<ref name="Dammert" /> This government prohibition of [[narcotics]] trafficking in Peru has resulted in a 70% reduction of coca leaf cultivation since 1995.  However the reduction in cultivation may not have actual effects on cocaine production, as recent advances in coca growing and more efficient processing methods allow for greater cocaine yield.<ref>United Nations. Office on Drugs and Crime. ''Peru Coca Cultivation Survey for 2005''. 2006. www.unodc.org/unodc/en/crop_monitoring.html. Retrieved 31 January 2012.</ref> The size of the narcotics industry as a part of the national economy is difficult to measure, but estimates range from $300–$600&nbsp;million. An estimated 200,000 Peruvian households have economies based on the production, refining, or distribution of coca.<ref name="Dammert" /> Many economists believe that large flows of dollars into the banking system contribute to the traditional depression of the dollar exchange rate vis-a-vis the sol.<ref name="PE" /> The Central Bank engages in open market activities to prevent the price of the sol from rising to levels that would cause Peruvian exports to become prohibitively expensive.

Hurt economically by [[Peruvian Air Force]] [[interdiction]] efforts in the mid-1990s,<ref name="PE">{{Cite web |title=Peru (04/01) |url=https://2009-2017.state.gov/outofdate/bgn/peru/14574.htm |access-date=2025-02-15 |website=U.S. Department of State}}</ref> drug traffickers are now using land and river routes as well as aircraft to transport [[cocaine]] paste and, increasingly, refined cocaine to consumers around and out of the country. The [[Air Bridge Denial Program]] was suspended in April 2001 after the Peruvian Air Force and strength of the U.S. DEA misidentified a civilian aircraft as a drug trafficker and shot it down, killing two American citizens on board. Peru continues to arrest drug traffickers and seize drugs and precursor chemicals, destroy coca labs, disable clandestine airstrips, and prosecute officials involved in narcotics corruption.

Working with limited aid of the [[U.S. Agency for International Development]] (USAID), the Peruvian Government carries out alternative development programs in the leading coca-growing areas in an effort to convince coca farmers not to grow that crop. Although the government previously eradicated only coca seed beds, in 1998 and 1999 it began to eradicate mature coca being grown in national parks and elsewhere in the main coca growing valleys. In 1999 the government eradicated more than 150&nbsp;km<sup>2</sup> of coca; this figure declined to 65&nbsp;km<sup>2</sup> in 2000, due largely to political instability.<ref>{{Cite web |date=June 2006 |title=COCA CULTIVATION IN THE ANDEAN REGION: A survey of Bolivia, Colombia and Peru |url=https://www.unodc.org/pdf/andean/Andean_full_report.pdf |access-date=2025-02-15 |website=United Nations Office on Drugs and Crime}}</ref> The government agency "Contradrogas", founded in 1996, facilitates coordination among Peruvian Government agencies working on counter-narcotics issues. Alternative crops, however, are not economically comparable to coca. 2004 prices indicate an annual income per hectare of $600 for coffee and $1000 for cocoa, versus up to $7500 for a hectare of coca.<ref>{{cite web|url=http://www.devida.gob.pe/|title=DEVIDA – Comisión Nacional para el Desarrollo y Vida sin Drogas|access-date=11 June 2015|archive-date=13 June 2015|archive-url=https://web.archive.org/web/20150613143959/http://www.devida.gob.pe/|url-status=dead}}</ref>

For the global push towards a green economy, sustainability depends on access to minerals such as copper, lithium, and rare earth elements. Peru, as one of the most resource-rich nations in the world, plays an important role.  Peru is currently considered the world’s second-largest exporter of minerals such as copper, silver, zinc, and lithium; these minerals are essential to the technologies that drive change in industry to a cleaner and more sustainable future. This year, in August 2024, Peru and the United States signed a memorandum of understanding (MOU) for greater foreign direct investment (FDI) and shared technological innovation. The MOU represents Peru as the US supply for the accessibility of essential minerals, guaranteeing responsible extraction processes. Peru has more than 6 t of lithium and managed 31 active copper projects with almost US$40 billion in potential investments. Thus, this partnership marks a new era for the Peruvian economy. (Owen, 2024)<ref>{{cite web | url=https://www.globalminingreview.com/mining/12112024/perus-critical-minerals-a-key-to-sustainable-growth-and-us-partnership/#:~:text=Our%20country%20is%20currently%20the,%2440%20billion%20in%20potential%20investments | title=Peru's critical minerals: A key to sustainable growth and US partnership | date=12 November 2024}}</ref><ref>{{cite web | url=https://www.trade.gov/country-commercial-guides/peru-mining-equipment-and-machinery | title=Peru - Mining Equipment and Machinery | date=30 December 2023}}</ref>

====Effect on family economies====
The anti-coca policies imposed in 1995 have had adverse effects on Peruvian's household economies.  Many families dependent on coca farming have been forced to send their children to work as eradication of crops has decreased their household income.<ref name="Dammert" /> In states where coca is grown, [[child labour]] increased by 18% in 1997 and 40% in 2000. Work hours and domestic work increased as well, with girls taking on 28% more domestic work with boys doing 13% more.  Wage work for adults also increased since 1995. As such, it can be inferred that the increase in child labour since eradication policies have come into effect is caused by children filling in for working parents.<ref name="Dammert" /> However, the issue of child labour in cocoa production is still present in Peru as reported in 2013 in the [[U.S. Department of Labor]]'s report ''Findings on the Worst Forms of Child Labor'' and in December 2014, in the [[Bureau of International Labor Affairs]]'s ''[[List of Goods Produced by Child Labor or Forced Labor]]''.<ref>{{Cite web |title=2013 Findings on the Worst Forms of Child Labor - Peru |url=https://www.refworld.org/reference/annualreport/usdol/2014/en/101989 |access-date=2025-02-15 |website=Refworld |language=en}}</ref><ref>{{Cite web |date=2014-12-01 |title=List of Goods Produced by Child Labor or Forced Labor |url=https://www.dol.gov/sites/dolgov/files/ILAB/reports/TVPRA_Report2014.pdf |access-date=2025-02-15 |website=The Bureau of International Labor Affairs}}</ref>