Friday, April 10, 2026.
Peru
As we’ve reported recently, Peru is heading into elections on April 12, with a most certain runoff in June. It’s a country worth paying attention to right now, not because of who’s likely to win, but because of the environment going into it. The field is highly fragmented, with no clear frontrunner and no indication that whoever emerges will have strong political backing.
That matters, because in Peru the issue isn’t just the election, it’s governability. The country has already gone through multiple leadership changes in recent years, and a divided outcome increases the likelihood of continued tension between the presidency and congress. In that kind of setting, decisions slow down, policies shift, and execution becomes less predictable.
For companies operating in or looking at Peru, the exposure is not tied to the result itself, but to the level of uncertainty surrounding it. Peru remains a key market in sectors like mining, energy, and infrastructure, but the gap between what exists on paper and how things function in practice tends to widen in periods like this.
Here’s what’s worth paying attention to as we head into the weekend elections.
Brett Mikkelson
Founder, B.M. Investigations, Inc. – Private Investigations in Panama
TOP NEWS and TIDBITS:
Alberto Vergara: “In the Peruvian Elections, the Most Serious Problems Coincide with the Worst Political Offering in Decades”
The first round of the Peruvian elections is just around the corner. Citizens will choose their next president—along with representatives to Congress and the Andean Parliament—amid a maze of 35 options and a ballot larger than a family-sized pizza box. Political scientist Alberto Vergara (Lima, 1974), a professor at the University of the Pacific who lives between Montevideo and Lima, shares his views on a contest that, in his opinion, will not represent “a turning point but rather another stop along the trajectory of the cycle of instability in which Peru has long been immersed.”
Question. Every election promises a better country. With what mix of emotions will Peruvians vote this Sunday?
Answer. What defines this election is the gap between the most serious problems in decades and the worst political offering, also in decades. Unfortunately, these elections offer very few opportunities to alter the trajectory of political instability and institutional decay that prevails in Peru. For that reason, there are no candidates who generate enthusiasm, nor programmatically solid platforms. The prevailing mood fluctuates between apathy and resignation.
Q. Will the cycle of chronic instability that has led Peru to have eight presidents in a decade be broken?
A. I find that unlikely. The flaws that produced that instability are present in the parties and candidates with the greatest chances. At the same time, most new organizations replicate the same short-term and predatory logic that brought us here. Peruvian politics is riding without a jockey; there are no longer heavyweight actors, institutions barely restrain politicians, and the system’s legitimacy is at rock bottom. These elections reproduce all of that. Expecting a different outcome is naïve. I’ll reuse an expression I used years ago in another context: this is a system of alternation without an alternative.
Q. How do you explain that a citizen must choose among 35 presidential options?
A. Political organizations in Congress deliberately worked to deepen the flaws of Peru’s political system, such as facilitating the creation of “parties” or eliminating any mechanisms that prevent fragmentation (like primaries). We knew that if the rules of representation were not changed, dispersion and mediocrity would worsen—and that is exactly what happened. In 2021 there were 17 candidacies, and over the past five years the decision was made to maintain rules that foster dispersion and the resulting instability. One only has to look at how embarrassing the presidential debates have been—a mix of amateurism, stupidity, and disorganization. Thirty-five weak candidates are the very logical continuation of eight weak presidents in ten years.
Q. Although uncertainty surrounds the process, once again Keiko Fujimori appears as the frontrunner. Why do the last four elections seem to come down to who will face her in the runoff?
A. That is another major incentive for fragmentation. Since it is known that Keiko Fujimori is strong enough to reach the runoff but also widely disliked enough to lose it, all candidates hope to face her in that stage, which fuels fragmentation. And that outcome will probably repeat for the fourth time.
Q. Everything suggests that the candidate with the greatest momentum is comedian Carlos Álvarez, who in the 1990s hosted rallies for Alberto Fujimori.
A. In reality, there is a pack of four or five candidates with a chance of reaching the runoff. I don’t see anyone as a clear favorite. Peruvian elections never fail to deliver last-minute surges. That said, it is true that comedian Carlos Álvarez gained traction at the right moment, amid very poor debate performances.
Q. In the south, there appears to be a vote of retaliation from those who were labeled ignorant for supporting Pedro Castillo and who believe that, beyond the coup attempt, he was never allowed to govern.
A. Yes, the south has a historically tense relationship with central power, particularly with Lima. To that historical condition we must add that the Peruvian right sought to derail the elections that Castillo had legitimately won with southern votes, and on top of that, the massacre of dozens of citizens in the south during the government of Dina Boluarte. It is natural that this sense of retaliation exists.
Q. Have the conditions worsened for Congress to continue governing the country?
A. Over the past five years, the constitutional design has tilted in favor of Congress. And it will not be easy to dissolve it. To begin with, a Senate has been reintroduced that cannot be dissolved. In any case, the problem lies more in the practices and incentives already adopted by those who enter politics than in the formal rules of the system.
Q. As you recently said, it is necessary to deeply understand the profiles of vice-presidential candidates. After all, they are often the ones who end up governing Peru.
A. Exactly. This is a country where knowing the vice-presidential candidates is as important—or more—than knowing the presidential candidate. Since the system is built on political organizations created to “sell” the presidential candidacy to an outsider and to auction off positions on congressional lists, vice presidents have no loyalty; they often do not even know the presidential candidate or the congressional candidates. Peruvian politics is a Persian bazaar populated by dwarfs praying for the presidential lottery.
Eight Presidents Later: Why the Peruvian Economy Withstands Political Chaos
Amid the political chaos in Peru, one meeting sent a signal of calm to part of the population and the markets. Just two hours after assuming the presidency, José María Balcázar, from the left-wing party Perú Libre, met with Julio Velarde, president of the Central Reserve Bank (BCR), a figure credited with much of the country’s economic stability despite a decade marked by political instability and eight presidents. The meeting, which lasted barely half an hour, ended with photos of the two shaking hands and smiling. The Executive branch stated that it took place “within the framework of the Government’s commitment to preserving stability and macroeconomic rules.”
What surprises Peruvians—and especially foreign observers—is that, despite the succession of impeached presidents, resignations, former leaders imprisoned or investigated for corruption, and even one who took his own life, the economy has not only remained standing but continues to grow.
In 2025, it recorded an expansion of 3.4%, according to the Ministry of Economy and Finance. The dollar, although it fluctuates, has not experienced sharp jumps. “Stability and macroeconomic discipline are essential conditions to attract investment and sustain it over time,” said Minister Denisse Miralles—who, following the change of government, does not yet know whether she will remain in her position.
There are two fundamental pillars supporting macroeconomics in a country that changes presidents without major institutional disruptions and has a Congress that often legislates based on particular interests: fiscal stability, through control of public spending, and monetary stability, thanks to the continuity, independence, and autonomy granted by the Constitution to the Central Bank. Added to this is a favorable international context, with export prices at record levels—such as copper—which strengthens state revenues.
Julio Velarde has led the Central Bank for nearly 20 years and has been ratified by every president during that period. “With that, monetary stability is ensured,” explains Carlos Casas, former Vice Minister of Economy and professor at the University of the Pacific. “There is a central banker and a highly reputable team, and that provides confidence in maintaining low and controlled inflation.”
The country also holds high international reserves—partly driven by last year’s record exports—which explains the relative strength of the sol against the dollar. “Reserves play an important role in defending the currency and the financial system. If any international speculator wanted to bet against the currency, the Central Bank can intervene immediately,” Casas adds. Peru is also a dual-currency economy: citizens can hold savings accounts in soles or dollars, and many businesses accept both currencies. In practice, this represents partial dollarization that provides flexibility. This exchange-rate stability allows businesses to plan and invest with greater predictability.
On the other hand, fiscal stability has been key to maintaining macroeconomic balance. The adoption of fiscal rules in the 2000s—after the hyperinflation of the late 1980s—was decisive in institutionalizing prudence in the management of public finances. “Institutions that define the direction of fiscal policy, such as the rule that the deficit should not exceed 1%, establish a path of convergence and serve as a reference,” explains Daniel Barco, economist and international consultant. The goal is to prevent the State from accumulating debt on a sustained basis and from debt servicing becoming a risk factor.
However, that balance is beginning to show signs of fragility. At the end of last year, the Fiscal Council warned that over the past five years there has been an increase in the number of laws with adverse fiscal impact approved by Congress through insistence. These are measures that increase public spending without identified financing or reduce fiscal revenues. The current Parliament has approved 229 such laws, more than three times the average of previous periods.
Growth below potential
The Peruvian economy has shown resilience, but political instability comes at a cost. Barco argues that, if current conditions—marked by high copper and gold prices and improved external expectations—are compared with past years, the country should be growing above 5%, not around 3% annually. “We are in an exceptional situation due to high metal prices. There are strong investment expectations, but they do not fully translate into concrete projects, precisely because of the caution generated by the political crisis,” he states.
According to projections by the Peruvian Institute of Economics (IPE), growth in 2026 will hover around 2.7%, affected by uncertainty associated with the April electoral process.
Experts also question the fact that growth does not translate into tangible improvements for the population, due to corruption and state inefficiency. Resources enter through taxes and should be allocated to schools, roads, or health centers, but they dissipate along the way. “Thirty percent of the budget is lost to corruption and inefficiencies. Much more could be done with the same resources—taking advantage of the mining boom and advancing formalization,” says Casas.
Informality and illegal economies are another component of economic dynamism, even though they largely operate outside the state. According to a survey by consulting firm EY, around 18% of Peru’s GDP is generated in the informal sector. In the case of illegal activities, they also generate employment, income, and consumption, but do so without guarantees or protections and generally with a strong negative impact on society and the environment. In 2025, the IPE estimated that, for the first time, Peru faces a scenario in which gold exports from illegal mining could match legal ones: between 105 and 115 tons, with a value close to 12 billion dollars.
The REINFO Has Created a Climate of Violence and Insecurity in Various Areas of Peru.An Emblematic Case Is the Province of Pataz, in the Region of La Libertad
Never has it been so easy to engage in small-scale or artisanal mining in Peru as it is under the “all-powerful” Comprehensive Registry of Mining Formalization (REINFO). The adjective used helps illustrate the practical effect of this measure, created on December 30, 2016, through Legislative Decree No. 1293, with antecedents dating back several years.
REINFO is a registry containing information on miners undergoing the formalization process, administered by the General Directorate of Mining Formalization of the Ministry of Energy and Mines (Minem). It was created to allow individuals engaged in small-scale and artisanal mining to continue carrying out their activities (applicable only to extraction and processing) on a temporary and exceptional basis while obtaining the required permits, within a defined timeframe.
The general regulatory framework requires a series of permits and rights to conduct mining activities: a concession (depending on the type of mining activity), the right to use the land (whether public or private), environmental certification, and sector-specific authorizations, where applicable.
However, obtaining these permits often takes time and can be complex in certain cases (e.g., reaching an agreement with the landowner depends on the will of a third party, not the mining operator). For that reason, this registry was created as a mechanism to facilitate small-scale and artisanal miners continuing their activities while formalizing.
Initially, the deadline to complete the formalization process was set for 2020. However, to no one’s surprise, this deadline has been extended for the fifth time, now until December 31, 2026, or until the entry into force of the Law on Small-Scale and Artisanal Mining (MAPE) and its regulations, whichever comes first. This regime may have been created with the best intentions: for the State to gain regulatory control over small-scale mining, ensure tax compliance, protect the environment and public health, and operate within the legal framework. However, what began as an exceptional and temporary measure has now become a questionable norm: small-scale and artisanal miners registered under REINFO are allowed to carry out extraction and processing activities without the permits required under general regulations.
Registration in REINFO not only allows miners to operate freely under the increasingly extended commitment to obtain the necessary permits, but it also serves as a shield against prosecution for illegal mining, under Legislative Decree No. 1351. This establishes that individuals engaged in illegal mining who are registered in REINFO are exempt from criminal liability.
Years later, we can observe the results of implementing this measure in an international context marked by the sharp rise in the price of gold and other minerals. Gold deserves special mention, with its price rising from approximately USD 2,000 per ounce at the end of 2023 to around USD 5,000 by January 2026, according to the London Bullion Market Association (LBMA).
Among the consequences of REINFO’s implementation: of the more than 84,000 individuals registered, only 2,016 have successfully completed the formalization process, according to a press release from the Presidency of the Council of Ministers dated July 12, 2025. Additionally, in practice, the “rental” of REINFO registrations has been reported, despite the regulation explicitly establishing this as grounds for exclusion: “When the holder of the REINFO registration declares as their own production that which is produced by a third party from another operation.” This is compounded by weak state oversight in enforcing compliance with formalization requirements.
Given these poor results, it is worth questioning whether the State has been efficient—or rather incompetent and corrupt—in implementing this measure, and whether those who registered in REINFO genuinely intended to formalize or simply acted opportunistically (why has there been such strong promotion and insistence on REINFO from both Congress and the Executive?).
It is also worth questioning whether formalizing small-scale and artisanal mining is inherently difficult—for example, due to challenges in reaching agreements with concession holders (e.g., signing exploitation contracts) or landowners.
At this stage, what has been observed are more shortcomings than successes associated with this measure. REINFO has generated a climate of violence and insecurity in various regions of Peru. An emblematic case is the province of Pataz, in the La Libertad region, which has the highest homicide rate in the country, with a 32% increase compared to 2021, according to the Peruvian Institute of Economics (IPE). This phenomenon has also had a spillover effect in the province of Trujillo, where authorities are largely absent and reports indicate police coexisting with criminal actors.
At this point, it remains—perhaps optimistically—to expect or push for the State to demonstrate genuine political will to advance the formalization of small-scale and artisanal miners, while simultaneously combating the misuse of REINFO and the expansion of illegal mining (increasingly present around major mining projects critical to the country’s development). This implies allocating resources to Specialized Environmental Prosecutor’s Offices so they can carry out enforcement actions and investigate illegal mining-related crimes. From a citizen perspective, it is also necessary to demand accountability from authorities (Minem, regional governments, the Public Prosecutor’s Office, and the Ministry of the Interior) regarding the actions being taken to address this serious issue.
Furthermore, it will be crucial to approve a MAPE law that, if possible, assigns oversight of small-scale and artisanal mining activities to the Environmental Evaluation and Enforcement Agency (OEFA) and the Supervisory Agency for Investment in Energy and Mining (OSINERGMIN)—rather than regional governments—and avoids introducing provisions that effectively replicate REINFO under a different name.
Paradoxically, what was conceived as a well-intentioned measure to formalize small-scale mining appears to have created the opposite incentives. Experience shows that in Peru, informality may actually be more advantageous: those who choose it receive extensions and flexible treatment, while those who bear the regulatory costs of formalization face stricter enforcement and sanctions from the State.
Illegal Gold Mining Expands into New Areas of the Peruvian Amazon, Threatening Rivers and Lives
Illegal gold mining is spreading into new areas of the Peruvian Amazon, advancing along remote rivers and into Indigenous territories, as experts warn of a growing environmental and public health crisis that could cause irreversible damage.
This boom marks a new phase for one of the Amazon’s most destructive industries, as operations expand beyond established hotspots into previously untouched regions, according to environmentalists, researchers, and Indigenous leaders who spoke to The Associated Press.
This expansion is accelerating deforestation, contaminating rivers with mercury, and exposing remote communities to violence and organized crime, even as the government claims it is intensifying enforcement.
Illegal mining affects “all regions of Peru.”
While it was previously concentrated mainly in the Amazonian region of Madre de Dios in the south of the country, the activity is now moving northward to regions such as Loreto and Ucayali.
Peru’s High Commissioner for the Fight Against Illegal Mining, Rodolfo García Esquerre, acknowledged this during a television interview in early February.
“Unfortunately, we have illegal mining in all regions of Peru,” he said on the news channel TVPERÚ.
Illegal miners clear forests with excavators, dig pits in floodplains, and use floating dredges that extract river sediments in search of gold. The process leaves behind pools of stagnant water contaminated with mercury and eroded riverbanks, while camps and access roads extend further into previously untouched forest areas.
Peruvian environmental lawyer César Ipenza said the expansion has accelerated in recent years due to rising gold prices. Gold has been trading at around $2,000 per ounce so far in 2026, near historic highs and roughly double its price a decade ago.
“Illegal mining has increased significantly,” said Ipenza, pointing to new activity in Huánuco, Pasco, Loreto, and along the border with Ecuador, as higher gold prices make operations in more remote regions economically viable.
Julia Urrunaga, Peru program director for the nonprofit Environmental Investigation Agency, said field reports show illegal mining appearing in new areas this year, particularly along river systems.
Rivers turn murky and forests fall
On the ground, conservationists say environmental changes become evident shortly after illegal mining begins.
“It happens very quickly,” said Luis Fernández, a research professor and senior fellow at the Sabin Center for Environment and Sustainability at Wake Forest University. “You see changes within weeks or months once machinery arrives… sediment plumes in rivers almost immediately.”
At the Panguana Biological Station in central Peruvian Amazonia, a private conservation area protecting one of the most biodiverse forests in the region, impacts are already visible in 2026. The station has become a key point in the illegal mining boom, according to its administrator, Fernando Malatesta.
“Where there used to be intact forests… now the rivers are murky,” he said. “We used to see crystal-clear water, but not anymore.”
Heavy machinery and road construction have invaded previously untouched forests. “It was an unrecognizable place,” Malatesta said, referring to a nearby area he saw deforested by dozens of machines in recent months.
Illegal miners typically arrive by river with dredging equipment or by road with excavators, quickly clearing land and altering waterways.
Threats, violence, and retreat from the forest
In Panguana, Malatesta and his team were forced to abandon the station after threats escalated in 2025 and early 2026.
“They started threatening us… there were people with machetes,” he said, recalling confrontations with miners and residents.
Researchers say this type of violence is linked to the growing involvement of organized crime networks.
“Transnational criminal groups are becoming more prominent every day,” said Ipenza.
Urrunaga said illegal gold mining has become a key source of income for criminal networks.
“Unfortunately, it is closely linked. It is a source of income for many organized crime activities in the country,” she said, adding that it is also “deeply connected to the political forces currently in power.”
The fight against illegal mining
At the end of 2023, the Peruvian government created a high-level multisectoral commission to combat illegal mining and oversee efforts to formalize small-scale miners.
Authorities say enforcement efforts are ongoing. Recent operations have resulted in the seizure and destruction of equipment worth more than 60 million soles (approximately $16 million) used in illegal mining.
However, environmental advocates say enforcement remains weak on the ground.
The Peruvian government did not immediately respond to requests for comment. Rodolfo García Esquerre, appointed in 2024 as Peru’s High Commissioner against illegal mining, declined to comment.
Indigenous communities caught in the middle
Indigenous leaders say the expansion is affecting communities across the Amazon.
“This is already being heard in other parts of the Amazon. It is spreading through Loreto and Ucayali,” said Julio Cusurichi, an Indigenous leader from Madre de Dios. He described how outside miners quickly arrive, clearing forests and contaminating rivers.
“There is fear,” Cusurichi said, adding that more than 30 Indigenous leaders have been killed in recent years for defending their lands.
In Panguana, Malatesta said some Indigenous communities have begun participating in mining due to economic necessity, while others attempt to resist.
“They are supporting illegal mining… they are selling their land thinking they are making the deal of a lifetime,” he said, warning that mining income “does not last forever.”
Mercury poisoning and an impending health crisis
Urrunaga said environmental damage is closely linked to serious health risks for communities.
“The devastation caused by gold mining is terrible in environmental terms and, through the environment, also for human health,” she said, explaining how mercury used to extract gold contaminates rivers, food, and water consumed by Indigenous communities, where fish is a staple.
“Mercury becomes the vehicle for transporting poison,” said Fernández, explaining how it accumulates through food chains and affects children’s neurological development.
Claudia Vega, a scientist and coordinator of the mercury program at the Amazonian Center for Scientific Innovation (CINCIA), said the expansion of mining into Amazonian communities that depend heavily on fishing could have severe consequences.
“Amazonian communities are already vulnerable… they eat fish every day,” she said. “If mining reaches those areas… it adds more risk.”
She warned that contamination could reach levels similar to the Minamata disaster in Japan, where mercury poisoning caused widespread neurological damage.
“We could see deformities, loss of vision, loss of hearing,” she said.
A tipping point for the Amazon?
Scientists warn that the expansion of mining could have irreversible consequences.
“We are going to witness a transformation of river corridors, floodplains, and forests,” said Fernández.
Urrunaga stated that international gold buyers “must be held accountable for the destruction their consumption generates, not only environmentally but above all in terms of human lives.”
As gold prices rise and global demand continues, scientists warn that continued expansion could push parts of the Amazon closer to an ecological tipping point, with large areas of rainforest transforming into degraded, savanna-like ecosystems.
“Every tree that falls, every river that is polluted, and every animal that disappears reminds us that we are losing an irreplaceable treasure,” Malatesta said.
New Airport in Peru’s Sacred Valley Raises International Concern
The project to build a new airport in Chinchero, located in Peru’s Sacred Valley, has generated growing international concern due to its potential environmental, cultural, and social impacts.
The initiative, promoted by the Peruvian government, aims to improve access to one of the country’s main tourist destinations, near Machu Picchu, and to boost international visitor arrivals. According to authorities, the new infrastructure would help stimulate the local economy and strengthen the development of the tourism sector.
However, heritage experts, environmental organizations, and local communities have raised serious objections to the project. Among the main concerns are potential damage to fragile ecosystems, alteration of the natural landscape, and impacts on the area’s water resources.
Specialists also warn that the construction of the airport could affect high-value archaeological sites and compromise the cultural authenticity of the Sacred Valley, a region recognized for its Inca heritage and still-active traditional practices.
The project has also raised alarms about the risk of overtourism in sensitive areas, which could place additional pressure on Machu Picchu and its surroundings.
On the social front, some groups have expressed concern about the possible displacement of local communities and changes to their ways of life, driven by increased tourism activity and environmental transformation.
The debate surrounding the Chinchero airport reflects a broader challenge for the country: finding a balance between economic development and the preservation of its cultural and natural heritage.
As the project moves forward, the discussion continues both nationally and internationally, highlighting the complexity of developing infrastructure in areas of high historical and environmental value.
Two Global Superpowers Are Competing for a Foothold on Peru’s Coast: the United States and China
More than 80% of global trade moves by sea, and nearly 60% of that traffic passes through the Pacific Ocean, which has become the world’s main economic highway. In this context, it is no coincidence that the most modern ports are no longer designed solely to move containers, but to influence entire global routes.
A quiet move. In recent weeks, the United States has taken a key strategic step in Latin America by approving an investment of up to $1.5 billion to redesign and relocate the Callao naval base, Peru’s main maritime hub.
The operation goes beyond infrastructure improvements; it aims to create a safer and more efficient environment by separating military operations from civilian traffic, while also allowing for the expansion of the commercial port. The project, carried out במסגרת military cooperation and with a long-term U.S. technical presence, reinforces Peru’s role as a relevant partner in the regional security architecture.
The shadow of the Chinese port. The element that gives real context to this decision is China’s growing presence in the area, particularly through the development of the Chancay megaport, operated by the state-owned company COSCO and a key component of the Belt and Road Initiative.
Located less than 80 kilometers from Callao, this port not only strengthens trade links between South America and Asia, but also raises concerns in Washington over its potential dual use—both civilian and strategic. The proximity between both infrastructures turns Peru’s coastline into a quiet friction point between the two powers.
Infrastructure as a political tool. Beyond its technical nature, the project reveals how global competition is shifting toward port and logistics infrastructure. The United States is not deploying forces or weaponry directly, but rather strengthening its presence through investment, engineering, and cooperation—securing access, influence, and future operational capability in a key Pacific region.
In that sense, the strategy allows it to consolidate positions without formally altering the military balance, while still shaping the long-term strategic environment.
Peru as a key player. For Peru, the initiative fits into a broader process of military and industrial modernization that includes submarines, fighter jets, and land systems, with participation from multiple international partners.
The modernization of Callao not only enhances its naval capabilities but also fosters a domestic technological and industrial ecosystem, strengthening its maritime sovereignty and its role as a relevant regional actor. This positioning turns the country into a connection point between global interests and local dynamics.
A new kind of competition. The case of Callao illustrates a deeper shift in great power rivalry: it is no longer just about traditional military bases, but about controlling logistics nodes, trade routes, and strategic points in the global supply chain.
Seen this way, the United States and China are not clashing directly, but are competing for influence through investments that, while appearing economic in nature, carry potential military implications. In this context, Latin America ceases to be a secondary stage and becomes another piece on the global chessboard.
