Update - Falling exchange rates and rising prices in Peru

Here is a comment that a Colour of Hope supporter made in reply to post, Falling exchange rates and rising prices cause alarm across Peru, from Wednesday, 10th October -

The dollar is indeed weak worldwide, and food price inflation is indeed a universal phenomenon (there have even been boycotts of pasta in Italy over its increased prices), but that doesn't of course make the situation any less devastating.

The good news is that with the orthodox macroeconomic policy pursued by Alan Garcia, Peru almost certainly won't see the hyperinflation it experienced when he attempted to spend more money than the government had in the 1980s. The bad news is that with stockpiles low worldwide food prices won't get any lower over the next year or two.

Expect the Peruvian government to come under increasing pressure to follow countries such as Argentina, and, most recently Russia, in imposing price caps on food. While this is superficially appealing, it has the perverse effect of increasing scarcity (because shops can't afford to stock goods that they have to sell at a loss) and forcing the government to spend vast amounts of money to keep prices low, which, in the long run, is what would make hyperinflation more likely again.

What is the situation at the moment? Have food prices dropped at all? Are price controls being discussed? Is the government getting the blame? Are Humala or any other populist figures capitalising on the issue?

The situation in Peru hasn't changed so far, unfortunately. Food prices haven't dropped and exchange rates haven't returned to what they were before 10th October. The good news though, is that rates haven't fallen any further. Although the dollar has remained at an all-time low, it seems to be stable for now.

I think there are mixed views about the government - Alan García has recently raised the minimum wage, which brought him some popularity amongst lower-middle classes. But after the 1980's fiasco, many people are extremely sceptical about the government's ability to control inflation. I haven't heard much about price controls so far, but there was talk of introducing a maximum price for milk.

Easysearch Total Update

Our Easysearch total has now reached £23.86! That's covers a month and a half's accommodation for one young person. Easysearch is a highly effective way to support The Colour of Hope at absolutely no cost to you! See Sept 27th entry for more details.

Update - Contemporary Art Exhibition Sponsors The Colour of Hope

Don't miss the Dartmoor Contemporary Art Exhibition, being held at Haytor (Devon) by three Devon-based artists from Fri 14^th to Sun 16^th December, 9am – 5pm.

Acrylic paintings by Adam Bunce, photographic sculpture by Ben Yates and mixed-media paintings by Luci Coles will be on display and for sale. Photographs, jewellery, prints, cards, gifts, tea and mince pies will be also available. 5% of all sales will go to The Colour of Hope!

From the bottom Haytor car park follow signs for the Broadleas Centre (near Bovey Tracey) and for more information please email adzbunce@hotmail.com

Moisés' Story - from Street Child to Chef

This is Moisés, one of the young people The Colour of Hope is helping. Moisés grew up on the streets of Lima. He spent some time in a care home, but was forced to leave once he turned 18. He had no-where to go and no money to rent a room. Caught in the poverty trap, he would most likely have ended up back on the streets.

But thanks to the generosity and kindness of one of our young person sponsors, Rachel Hutchinson, and also to his own incredible determination and will-power, Moisés found somewhere to live and was able to finish school. Rachel is now funding him through a 2 year catering course in Lima, which will enable him to become a chef.

Moisés began studying in February this year and has been taking modules in all kinds of different foods, such as Chinese and Mediterranean cuisine, and is now doing a course in dinner service. A few weeks ago, he took part in a buffet breakfast, which was organised by his college and made open to the public. Next Friday, 30th November, he will be representing his college at a dinner party, which is to be held in a prestigious Lima restaurant, El Hawaiano, in Barranco.

With Rachel and The Colour of Hope's help, Moisés is becoming the successful young person he deserves to be. Once he finishes his course, he will be able to begin supporting himself and hopefully, one day, be able to fulfil his aim of helping his family. Keep up the good work Moisés!

The Colour of Hope Carnival Winners become Overall Champions!

Our carnival winners, Jessica and Rosa Batten-Stevens, from Ottery St Mary, Devon, have not only won 9 Firsts and 1 Third Prize at this year's East Devon Link Carnivals; they've now been nominated the best overall walking pair! The girls and their mother were specially invited to the Devon Link Presentation Evening last Friday, 16th November, and came away as the proud winners of this enormous cup! Showing 100% dedication to their fundraising efforts from start to finish, they deserve every bit of their success. A very big thank you from The Colour of Hope Team for all this hard work.

Easysearch Total Update

Our Easysearch total has now reached £21.01! That's covers a months accommodation for one young person. Easysearch is a highly effective way to support The Colour of Hope at absolutely no cost to you! See Sept 27th entry for more details.

WebSpanish October donation

WebSpanish, an online Spanish learning programme, has made another donation to The Colour of Hope from its students' tuition fees throughout October. Thank you WebSpanish!

Fundays Fancydress Sponsors The Colour of Hope

Fundays Fancydress is a small business run by Mary Batten-Stevens, designing and hand-making children’s dressing-up clothes and costumes. Mary made her daughters, Jessica and Rosa, their exquisite carnival costumes, helping them to win 8 Firsts and 1 Third at this year's 9 East Devon Carnivals (click the above link for pictures). The photos in this entry show some of her other costumes.

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Mary has kindly agreed to donate 10% of ALL sales to The Colour of Hope, making Fundays Fancydress our second corporate sponsor. So please contact her at mbattenstevens@yahoo.com for some fantastic Christmas presents for the younger members of the family.

El VRAE - The Forgotten Valley of Peru

More coca is produced in the VRAE (River Apurímac and River Ene Valley) than anywhere else in Peru. Naturally, it has become an epicentre for cocaine production and is a regular drug trafficking route.

The entire valley has only one local police station and six policemen. The station is cut off from all communication given that the only telephone was disconnected 6 months ago due to unpaid bills.

54.27% of the valley's population is poor and 44.84% is extremely poor. 51% are suffering from chronic malnutrition.

80% of housing lacks potable water and 77% has no street lighting.

The life expectancy for women in the valley is 60 and 64 for men.

Of the 200,000 people living in the valley, only 10,000 (5%) have finished secondary school.

30% of the population as a whole and 49% of women in the valley is illiterate.

Anteccasa, one of the valley's typical towns, has no running water, electricity or medical service. There is only one primary school for the 40 children and the teacher hardly ever turns up. If the children want to study, they must walk more than 3 hours in order to reach the next school. The nearest secondary school is even further away; nobody in Anteccasa has ever been.

The medical centre in Pichari, another VRAE town, is falling to bits. Patients must queue for hours to register because notes are taken by hand. Even if there were a computer it wouldn't be of much use because the electricity cuts out on a regular basis, ruining the few bits of medical equipment the centre has managed to obtain. Vaccinations have to be put between blocks of ice until the electricity returns and the night team quite often works by candlelight. The centre's medical staff has to work around the clock because there are not enough of them for the number of patients. The situation is the same in 8 other medical centres throughout the VRAE and there is only one hospital for the entire valley.

In 2006, the Peruvian government initiated "Plan VRAE" - "an option of peace and development for the VRAE", yet there have been no great changes to the valley's education system, medical service and general standard of living so far. The VRAE police headquarters, opened by the Plan in December last year, has only one van - hardly even sufficient to patrol the edges of the 13,000 square kilometre valley. The Plan's budget has been increased for 2008, and after a recent terrorist attack in Ocobamba, the area has been re-declared a state of emergency. But this is not enough for the VRAE people. They need to see change now, not in two, three or four years time.

Last Monday, 5th November, I posted a report by Andres Oppenheimer, entitled, "Peru may be the next rising star in Latin America". Oppenheimer states, "Peru has a long way to go, especially when it comes to competing in the global economy...but people who are optimistic about Peru in the long run may be right...it may indeed become a star economy in the not-so-distant future." This optimism may well be true for the country's economy in general; many parts of Peru are seeing steady progress and change. But the VRAE is by no means one of these parts; in the general air of development and success, the VRAE and other similar areas are all too easily forgotten.

Map courtesy of uterodemarita.com

Our Carnival Winners do it again!

The final 2007 East Devon Link Carnival took place in Ottery St Mary last Saturday, 3rd November, and for the 9th time this year, Jessica and Rosa Batten-Stevens have come away as proud winners of First Prize! The girls have made an outstanding effort, showing 100% dedication to their cause, and their final fundraising total has reached £450, enough to sponsor a young person for a 6-month period. A very big thanks goes to Jess and Rose, and also to their equally dedicated mother - Mary Batten-Stevens. Mary hand-made the girls exquisite carnival costumes and has given up many hours of her time to support her daughters' charity efforts. If you're interested in seeing more of Mary's costumes, drop her an email at mbattenstevens@yahoo.com - 10% of all sales go to The Colour of Hope!

Easysearch Total Update

Our Easysearch total has now reached £15.87! That's almost covers a months accommodation for one young person. Easysearch is a highly effective way to support The Colour of Hope at absolutely no cost to you! See Sept 27th entry for more details.

The Oppenheimer Report - Peru may be the next rising star in Latin America

When I asked senior World Bank economist Marcelo M. Giugale in a recent television interview which countries will be the economic stars of Latin America over the next 20 years, I was surprised by his answer. The first country he mentioned was Peru.

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''Peru?'' I asked, somewhat incredulous. When economists talk about Latin America's bright spots, the first country they usually cite is Chile, which has been growing steadily for nearly two decades and has reduced poverty from about 40 percent in the early '90s to about 15 percent today, more than any other country in the region.

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When pressed for other examples of Latin American countries likely to prosper in the near future, many cite Brazil. It's a giant country that is moving toward modernity at a snail's pace, but -- with more than 50 percent of South America's GDP -- is raising high expectations because of its sheer size, and its leftist government's generally sound economic policies.

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But Peru, until now, has seldom come up as a country of the future. Most often, it has been associated with political scandals, natural disasters and political uncertainty.

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Last year's elections had pitted former President Alan García, whose irresponsible populism had ruined the country during his 1985-90 term, and Ollanta Humala, a leftist former military officer who was publicly backed by Venezuela's narcissist-Leninist leader Hugo Chávez. When Garcia won by a thin margin, Peru's business community welcomed his victory as the lesser of two evils.

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''Making predictions for the next 20 years is somewhat risky, but I would look at countries like Peru,'' Giugale said in the soon-to-be-aired Oppenheimer Presenta television interview. [Excerpts can be seen now at www.MiamiHerald.com/americas].

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''The countries that will succeed are those that find the right balance between economic efficiency and social solidarity,'' he said. ''That's because countries that follow that middle-of-the-road path are the ones that will have the most political feasibility to get things done.''

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Giugale, who cited Colombia as another country that may surprise everybody for the better in coming years, especially if it gets its free trade agreement with the United States approved by the U.S. Congress, said Peru is already showing pretty impressive growth figures. Consider:

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• Peru's economy has been growing at about 6 percent a year for the past six years, a longer period of steady growth than most countries in the region. The United Nations Economic Commission for Latin America is projecting a 7.3 percent growth for 2007, and a 6 percent increase for 2008.

• Poverty has fallen from 54 percent of the population in 2001 to about 44 percent, according to official figures.

• Inflation is at about 2.8 percent, one of the lowest rates in the region.

• Exports have risen at an average annual rate of 24 percent since 2001, including an 18 percent annual rise in nontraditional exports, mostly agricultural goods and textiles.

• Foreign direct investment has soared from $810 million in 2000 to $3.5 billion last year.

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My opinion: Peru has a long way to go, especially when it comes to competing in the global economy. Just Wednesday, the World Economic Forum's new ranking of the world's most competitive economies ranked Peru 86th among 121 countries, down eight places from its spot last year.

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But people who are optimistic about Peru in the long run may be right. García has had the wisdom to continue the sound economic policies of his predecessor, Alejandro Toledo, who despite his low popularity set the stage for long-term economic growth and a reduction of poverty.

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This is no small achievement in Latin America, a region long characterized by boom and bust cycles where many presidents love to proclaim themselves founding fathers of supposedly new and ''revolutionary'' economic models -- like we are now seeing in Venezuela, Bolivia and Ecuador -- that help them gain absolute powers, but most often at the cost of destroying their countries' economies and increasing poverty in the long run.

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Chile, and most recently Brazil, have opened a new chapter in Latin America's modern history: They are leftist-ruled countries that pursue responsible economic policies, attracting investments and creating the base for long-term growth. Peru is a welcome addition, and it may indeed become a star economy in the not-so-distant future.

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Andres Oppenheimer
aoppenheimer@herald.com

More pictures of our Carnival Winners!

Charity Concert at The Royal Clarence Hotel, Exeter

Margaret Stevens and Dave Martin held a charity concert on 5th September at The Abode Royal Clarence hotel in Exeter, raising a grand total of £700! At Margaret and Dave’s request, these funds will be used exclusively to put a young Peruvian through catering college. They’d like to thank the City Steam Jazz Band who provided the evening’s entertainment for free, and the celebrity chef Michael Caines who offered the Clarence Room in the Royal Clarence Hotel as a venue for the concert.