Exchange rate overvaluation under hyperinflation: The case of Peru

This dissertation examines the behavior of the exchange rate under two different scenarios. The first one is characterized by, relatively, low inflation or a situation where prices adjust sluggishly. The second is a high inflation economy where prices respond very rapidly even to unanticipated shocks. In the first one, following a monetary expansion, the exchange rate overshoots, i.e. the nominal exchange rate depreciates at a faster pace than the price level. Under high levels of inflation, prices change faster than the exchange rate so the exchange rate undershoots its long run equilibrium value.^ The standard work in this area, Dornbusch (1976), explains the overshooting process in the context of perfect capital mobility and sluggish adjustment in the goods market. A monetary expansion will make the exchange rate increase beyond its long run equilibrium value. This dissertation expands on Dornbusch's model and provides an analysis of the exchange rate under conditions of currency substitution and price flexibility, characteristics of the Peruvian economy during the hyper inflation process that took place at the end of the 1980's. The results of the modified Dornbusch model reveal that, given a monetary expansion, the change in the price level will be larger than the change in the exchange rate if prices react more than proportionally to the monetary shock.^ We will expect this over-reaction in circumstances of high inflation when the velocity of money is increasing very rapidly. Increasing velocity of money, gives rise to a higher relative price variability which in turn contributes to the appearance of new financial (and also non-financial) instruments that report a higher return than the exchange rate, causing people to switch their demand for foreign exchange to this new assets. In the context of currency substitution, economic agents hoard and use foreign exchange as a store of value. The big decline in output originated by hyper inflation induces people to sell this hoarded money to finance current expenses, increasing the supply of foreign exchange in the market. Both, the decrease in demand and the increase in supply reduce the price of foreign exchange i.e. the real exchange rate. The findings mentioned above are tested using Peruvian data for the period January 1985-July 1990, the results of the econometric estimation confirm our findings in the theoretical model. ^

Literatura femenina en el Peru decimononico. La cuestion del naturalismo y el feminismo en la obra de Mercedes Cabello de Carbonera

Women writers in the nineteenth century were often underestimated and in some cases completely ignored. At the end of that century, a considerable group of Peruvian women writers had a significant influence in the development of Lima's cultural life. Either together in the “veladas literarias” or individually in their own work, they showed a common interest in women's concerns and especially in the problems regarding women education or, better to say, the lack of it. Although frequently these writers just followed the paths men have marked for them, they often tried to find their own ways of expression in their works. ^ This dissertation examined the cultural life in Lima at the end of the century and concentrated in one of these writers, Mercedes Cabello de Carbonera (1845–1909), whose work was analyzed from a feminist point of view. American critics had been chosen for the analysis and especially the feminist theories of Sandra Gilbert, Susan Gubar and Elaine Showalter. They were applied to three of Cabello de Carbonera's novels: Sacrificio y recompensa, Las consecuencias and Blanca Sol. ^ The study attempted to prove how often women opinions were distorted by the male tradition and how they tried a different way of expression through the metaphors and symbols referring to the state of repression women were in. Beneath the surface of their work lies a determined feminine consciousness. ^

Molecular phylogenetics of the palm tribe Geonomeae, and differentiation of Geonoma macrostachys western Amazonian varieties

Phylogenetic analyses were performed on six genera and 46 species of the Neotropical palm tribe Geonomeae. The analyses were based on two low copy nuclear DNA sequences from the genes encoding phosphoribulokinase and RNA polymerase II. The basal node of the tribe was polytomous. Pholidostachys formed a monophyletic group. The currently accepted genera Calyptronoma and Calyptrogyne formed a well-supported clade with Calyptronoma resolved as paraphyletic to Calyptrogyne. Geonoma formed a strongly supported monophyletic group consisting of two main clades. ^ An evaluation of the genetic distinctness between Geonoma macrostachys varieties at a local and regional scale using inter-simple sequence repeat (ISSR) markers was performed. Clustering, ordination, and AMOVA suggested a lack of genetic distinctness between varieties at the regional level. A hierarchical AMOVA revealed that the genetic diversity mainly lies among the four localities sampled. A significant genetic differentiation between sympatric varieties occurred in one locality only. The current taxonomy of G. macrostachys, which recognizes only one species, was therefore supported. ^ The preferred habitat of sympatric G. macrostachys varieties with respect to edaphic, topographic, and light factors in three Peruvian lowland forests was studied. The two varieties were mostly encountered in different physiographically defined habitats, with variety acaulis occurring more often in floodplain forest and variety macrostachys in the tierra firme. Comparison of means tests revealed that nine to eleven of the 16 environmental variables were significantly different between varieties. Edaphic factors, mainly soil texture and K content, were better contributors than light conditions to distinguish the habitats occupied by the two varieties in all three study sites. It is concluded that habitat differentiation plays a role in the coexistence of these closely related species taxa. ^

The importance of marine subsidies for terrestrial consumers in coastal Peru

The Peruvian coast is one the best examples of cross-ecosystem food web exchanges, in which resources from one of the richest marine ecosystems subsidize consumers in one of the driest deserts on Earth. Marine subsidies are resources that originate in the marine ecosystem, and that contribute to increase the density of consumers in the recipient ecosystem. I examined the effects of marine subsidies on animal populations in the Peruvian coastal desert. ^ I combined several approaches to study the linkages between marine resources and terrestrial consumers, such as surveying the spatial distribution and estimating the relative abundance of terrestrial consumers, studying the diet of geckos and lizards through stomach content analyses, and examining the desert food web with carbon and nitrogen stable isotope analyses. ^ I found that the distribution and diet of desert consumers were tightly coupled to the availability of marine subsidies. I revealed linkages along two pathways of nutrient fluxes: tidal action that washes ashore macroalgae and cadavers of marine organisms, and animal transport in places where pinnipeds and seabirds congregate for reproduction. In the first pathway, intertidal algivivores made marine resources available to terrestrial consumers by moving between the intertidal and supratidal zone. The relative contribution of terrestrial and algal carbon sources varied among terrestrial consumers, because scorpions assimilated a lower proportion of energy from macroalgae than did geckos and solifuges. In the second pathway, I found that pinniped colonies influenced the diet of desert consumers, and contributed to support large populations of lizards and geckos. By combining field observations, and stomach and stable isotope analyses, I constructed a simplified food web for a large sea lion colony, showing the number of trophic levels that originate from pinniped-derived nutrients. ^ My study demonstrates the enormous importance of marine resources for the diet of desert consumers. The near absence of rainfall along the Peruvian coast promotes an extreme dependence of terrestrial consumers on marine resources, and causes permanent food web effects that are affected by temporal variability in marine productivity, rather then temporal patterns of desert plant growth. ^

Environment, culture, and medicinal plant knowledge in an indigenous Amazonian community

Diminishing cultural and biological diversity is a current global crisis. Tropical forests and indigenous peoples are adversely affected by social and environmental changes caused by global political and economic systems. The purpose of this thesis was to investigate environmental and livelihood challenges as well as medicinal plant knowledge in a Yagua village in the Peruvian Amazon. Indigenous peoples’ relationships with the environment is an important topic in environmental anthropology, and traditional botanical knowledge is an integral component of ethnobotany. Political ecology provides a useful theoretical perspective for understanding the economic and political dimensions of environmental and social conditions. This research utilized a variety of ethnographic, ethnobotanical, and community-involved methods. Findings include data and analyses about the community’s culture, subsistence and natural resource needs, organizations and institutions, and medicinal plant use. The conclusion discusses the case study in terms of the disciplinary framework and offers suggestions for research and application.

In God we trust: Faith-based development, spiritual transformation, and economic change in southern Andean indigenous communities

In communities throughout the developing world, faith-based organizations (FBOs) focus on goals such as eradicating poverty, bolstering local economies, and fostering community development, while premising their activities and interaction with local communities on theological and religious understandings. Due to their pervasive interaction with participants, the religious ideologies of these FBOs impact the religious, economic, and social realities of communities. This study investigates the relationship between the international FBO, World Vision International (WVI), and changes to religious, economic, and social ideologies and practices in Andean indigenous communities in southern Peruvian. This study aims to contribute to the greater knowledge and understanding of (1) institutionalized development strategies, (2) faith-based development, and (3) how institutionalized development interacts with processes of socio-cultural change. Based on fifteen months of field research, this study involved qualitative and quantitative methods of participant-observation, interviews, surveys, and document analysis. Data were primarily collected from households from a sample of eight communities in the Pitumarca and Combapata districts, department of Canchis, province of Cusco, Peru where two WVI Area Development Programs were operating. Research findings reveal that there is a relationship between WVI’s intervention and some changes to religious, economic, and social structure (values, ideologies, and norms) and practices, demonstrating that structure and practices change when social systems are altered by new social actors. Findings also revealed that the impacts of WVI’s intervention greatly increased over the course of several years, demonstrating that changes in structure and practice occur gradually and need a period of time to take root. Finally, results showed that the impacts of WVI’s intervention were primarily limited to those most closely involved with the organization, revealing that the ability of one social actor to incite changes in the structure and practice of another actor is associated with the intensity of the relationship between the social actors. The findings of this study should be useful in ascertaining deductions and strengthening understandings of how faith-based development organizations impact aspects of religious, economic, and social life in the areas where they work.

Peru’s Shining Path: Recent Dynamics and Future Prospects

Although soundly defeated in the early to mid-1990s, Shining Path (Sendero Luminoso) did not disappear. Over the past five years, it has reemerged in a substantially different form, with both a military and a political component. The organization, once again coordinated by jailed leader Abimael Guzmán Reynoso, has eschewed shorter-term military objectives in favor of a longer-term strategy of slowly rebuilding popular support and establishing a party within the Peruvian political system. In so doing, it has also moved from extreme Maoist ideological rigidity to a more pragmatic, though perhaps only tactical, approach. Financial support is derived once again from cocaine production and trafficking in the Upper Huallaga Valley (UHV). Although there may be some individual exceptions, Shining Path is not a narcoterrorist organization. At the same time, Sendero is still very small, in no way a threat to the Peruvian state, and divided. The Lima-based political organization and the military wing in the UHV continue to follow Guzmán‟s leadership, while the Apurímac-Ene Valleys (VRAE) group remains committed to the armed struggle. The Government of Peru (GOP) response to date, both military and civilian, has been inadequate. VRAE military operations are hampered by poor leadership, ill-trained troops, and an outdated strategy. VRAE development resources have been cut, and the long-promised paved road remains in the planning stage. Without significant GOP adjustments, Shining Path is likely to continue to grow.

Consolidating Security and Development in Colombia: Lessons for Peru and Panama

Colombia's increasingly effective efforts to mitigate the power of the FARC and other illegitimately armed groups in the country can offer important lessons for the Peruvian government as it strives to prevent a resurgence of Sendero Luminoso and other illegal non-state actors. Both countries share certain particular challenges: deep economic, social, and in the case of Peru ethnic divisions, the presence of and/or the effects of violent insurgencies, a large-scale narcotics production and trafficking, and a history of weak state presence in large tracts of isolated and scarcely-populated areas. Important differences exist, however in the nature of the insurgencies in the two countries, the government response to them and the nature of government and society that affects the applicability of Colombia's experience to Peru. The security threat to Panama from drug trafficking and Colombian insurgents --often a linked phenomenon-- are in many ways different from the drug/insurgent factor in Colombia itself and in Peru, although there are similar variables. Unlike the Colombian and Peruvian cases, the security threat in Panama is not directed against the state, there are no domestic elements seeking to overthrow the government -- as the case of the FARC and Sendero Luminoso, security problems have not spilled over from rural to urban areas in Panama, and there is no ideological component at play in driving the threat. Nor is drug cultivation a major factor in Panama as it is in Colombia and Peru. The key variable that is shared among all three cases is the threat of extra-state actors controlling remote rural areas or small towns where state presence is minimal. The central lesson learned from Colombia is the need to define and then address the key problem of a "sovereignity gap," lack of legitimate state presence in many part of the country. Colombia's success in broadening the presence of the national government between 2002 and the presence is owed to many factors, including an effective national strategy, improvements in the armed forces and police, political will on the part of government for a sustained effort, citizen buy-in to the national strategy, including the resolve of the elite to pay more in taxes to bring change about, and the adoption of a sequenced approach to consolidated development in conflicted areas. Control of territory and effective state presence improved citizen security, strengthened confidence in democracy and the legitimate state, promoted economic development, and helped mitigate the effect of illegal drugs. Peru can benefit from the Colombian experience especially in terms of the importance of legitimate state authority, improved institutions, gaining the support of local citizens, and furthering development to wean communities away from drugs. State coordinated "integration" efforts in Peru as practiced in Colombia have the potential for success if properly calibrated to Peruvian reality, coordinated within government, and provided with sufficient resources. Peru's traditionally weak political institutions and lack of public confidence in the state in many areas of the country must be overcome if this effort is to be successful.

Mining in Peru: Indigenous and Peasant Communities vs. The State and Mining Capital

The Peruvian economy depends for its growth on the export of natural resources and investment in the mining and hydrocarbon sectors. Peruvian governments and mining corporations have confronted anti-mining protests in different ways. While the current government has introduced policies of social inclusion to soften the negative effects of the operations of mining capital and policies of dialogue to engage social actors with the essence of governmental policies, mining companies use corporate social responsibility programs as a cover for the devastating effects of their operations on the environment and the livelihoods and habitats of the indigenous and peasant communities. Curiously, in the current context of the declining commodity prices and export volumes the Peruvian government strengthens its extractivist model of development. This article argues that whatever government that follows the rules of capital cannot but favor the corporations. It points out the main adversaries of the indigenous and peasant communities and the problems to transform the locally and/or regionally struggle into a nationwide battle for another development model.

Metahistoria nacional y metaficción biográfica en Historia de Mayta, de Mario Vargas Llosa

The thesis explores Mario Vargas Llosa's Historia de Mayta in light of recent studies of Latin America's new historical novel (Menton, Juan-Navarro) and in connection with contemporary literary theory (Waugh, Stonehill) and new trends in the philosophy of history (White, Foucault). In my study, I focus on three major levels of analysis: 1) significant events in Peruvian history to which the novel alludes; 2) biographical elements that strongly evoke the lives of Ernesto "Che" Guevara, Jacinto Rentería, and Vargas Llosa himself; and 3) the self-referential devices that aim at questioning the validity of empirical analysis in both fiction and history. The allegorical dimension of the novel's view of modern Peruvian politics, its biographical component, and the self-consciousness of its historiographic approach make of Historia de Mayta both a metahistory of Perú and a biographical metafiction. The thesis ultimately reveals the problematic borderline between fiction and reality, the novel and history.

Environment, Culture, and Medicinal Plant Knowledge in an Indigenous Amazonian Community

Diminishing cultural and biological diversity is a current global crisis. Tropical forests and indigenous peoples are adversely affected by social and environmental changes caused by global political and economic systems. The purpose of this thesis was to investigate environmental and livelihood challenges as well as medicinal plant knowledge in a Yagua village in the Peruvian Amazon. Indigenous peoples’ relationships with the environment is an important topic in environmental anthropology, and traditional botanical knowledge is an integral component of ethnobotany. Political ecology provides a useful theoretical perspective for understanding the economic and political dimensions of environmental and social conditions. This research utilized a variety of ethnographic, ethnobotanical, and community-involved methods. Findings include data and analyses about the community’s culture, subsistence and natural resource needs, organizations and institutions, and medicinal plant use. The conclusion discusses the case study in terms of the disciplinary framework and offers suggestions for research and application.

Distribution of opal and quartz in surface sediments from the subtropical southeastern Pacific (Table 1)

The distribution patterns of opal and quartz on the ocean floor of the subtropical southeastern Pacific have been defined by analyzing 59 surface-sediment samples. The opal distribution resembles that of primary productivity in the surface waters, except along the Peruvian and northern Chilean coasts, where dilution reduces opal values. The distribution pattern of quartz represents both eolian and fluvial transport. Quartz distribution extends out as a tongue in the same direction and position as the prevailing southeast trade winds. Along the South American coast, high quartz concentrations are found in patches near shore and decrease rapidly seaward.