The poor in Latin America during adjustment: a case study of Peru

This article focuses on the immediate, first-round effects of adjustment policies on the poor, beginning by isolating those features of adjustment packages that, when first introduced, are likely to affect either the consumption or income of poor households. Although Peru does not yet have a structural adjustment program, its present situation is one in which some kind of "adjustment' must occur. The authors find that only some of the poor in Peru are at risk of being adversely affected by adjustment policies, at least immediately upon their introduction. In particular, dismantling Peru's agricultural price support system may reduce the real income of many poor households in both urban and rural Peru. Protecting the poor during adjustment in Peru will depend critically on the government's ability to target interventions to those poor households that are actually hurt by adjustment policies. -from Authors