President Alan García presides over one of the region's fastest growth rates, but his approval rating sank to 26 percent this week because the poor say their lives aren't any better.
Twenty years later – during his second time in office – Mr. García boasts one of the lowest rates in the region, even while his neighbors suffer under double-digit inflation.
The economic outlook only brightens from there. Peru has seen 84 consecutive weeks of sustained growth, foreign investment is pouring in, and, in a much-heralded announcement, Standard & Poor's this month raised Peru's foreign currency debt rating to investment grade.
García should be one of the most popular presidents of Latin America. Instead, he's one of the least.
Peru's economic boom has buoyed the country, both rich and poor. Poverty is down by 5 percentage points in the past year, to about 40 percent. But the windfall from record mineral prices, textile exports, and foreign investment has fueled wealth much faster than it has reduced poverty – giving rise to resentment, protests, and strikes that many observers say is paving the way for the victory of a hard-line nationalist, like former presidential candidate Ollanta Humala, in Peru's next elections in 2011.
"Inequality is greater than before," says Efrain Gonzales, an economist and vice rector of the Pontifical Catholic University of Peru. And the serious reforms that would bridge divides, particularly for those in the rural Andes who are most cut off from the expansion, have taken a backseat to continuing economic growth, he says. "That is just fuelling more dissatisfaction. If the government does not improve its programs, the problems will get worse, and it's very probable that a candidate like [Mr. Humala] will win."
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