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Peru - The Curse of Inca Gold


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Synopsis of "The Curse of Inca Gold"


The high-stakes battle to control the world's richest gold mine.

Gold's place and power in society

The environmental costs of gold mining

Peru's rich history and natural resources

From the Conquistadors to President Fujimori's reign





Of the estimated 150,000 tons of all gold ever mined, about 15 percent is thought to have been lost in dissipative industrial uses or otherwise unrecoverable and unaccounted for. Of the remaining 128,000 tons, central banks hold an estimated 32,000 tons as official stock, and about 96,000 tons is privately held in bullion, coin and jewelry.

Images of peruvian landscapes, people and culture
Facts & Stats

Peru is a land of natural beauty and rich cultural heritage, though territorial disputes, military coups, corruption and economic inequality have marred the country's history. Peru was home to the fabled Incan Empire in the 15th and 16th centuries.

• Land and People
• Economy and Resources
• History and Politics

Land and People

Located in western South America, Peru borders the Pacific Ocean, with Ecuador to the north and Chile to the south. With a land area slightly smaller than the state of Alaska, Peru is the fourth-largest Latin American nation. The city of Lima is the country's capital as well as its cultural and business center.

The total population of Peru is just under 28 million. The country's ethnic mix is split between Amerindian (45 percent); Mestizo, a mix between Amerindian and white (37 percent); white (15 percent); and black, Japanese and Chinese (the remaining 3 percent).

Peru is one of only three Latin American countries populated mainly by indigenous people. The country's official languages are Quechua, which is spoken by the two largest indigenous groups, and Spanish, which was imported to the area in the 16th century. A large number of Amazonian languages, including Aymara, are also spoken.

Dominated by the Andes, Peru's principal natural features are a desert coast; snow-covered peaks and the mountain ranges they anchor; Lake Titicaca, the world's highest navigable lake; and a vast web of tropical rivers. Three types of terrain dominate in Peru: the western coastal plain (la costa), the high and rugged Andes in the country's center (la sierra), and the eastern lowland jungle of the Amazon Basin (la selva).

Peru is home to Machu Picchu, the renowned Incan site located high in the eastern Andean mountain range, at an altitude of 8,000 feet. Machu Picchu is thought to have been a royal estate and religious retreat built between 1460 and 1470C.E. Dense brush and steep rocky slopes surround the so-called Lost City and its architectural wonders. The granite-block structures fit tightly together, and terraced gardens line the hills.

Pollution of rivers and coastal waters from municipal and mining wastes is one of many environmental challenges facing Peru. The country also suffers from deforestation, sometimes as a result of illegal logging; overgrazing of the slopes of la costa and la sierra, leading to soil erosion; desertification; and air pollution in Lima.

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Economy and Resources

The Peruvian economy underwent major privatization of the mining, electricity and telecommunications industries in the 1990s. Although devastating environmental effects wrought by El Niño weakened the economy from 1998 to 2001, unorthodox fiscal policies enacted by the current administration have managed to help stabilize inflation.

Fifty-four percent of Peruvians live below the poverty line, with almost half of those in extreme poverty. The unemployment rate in the Lima metropolitan area is 9.6 percent and is estimated to be much higher in rural areas.

The land of Peru is rich in deposits of copper, silver, lead, zinc, oil and gold. The mining sector has been a principal provider of the foreign exchange and tax revenue needed to keep the rest of the economy going. In 2001, Peru's mining export revenues of $3.2 billion represented 45.1 percent of the country's total exports.

Other major industries include petroleum extraction and refining and fishing. The country's major legal exports, outside of mining, are crude petroleum and coffee. Coca production and cocaine trade, both illegal, continue to be major contributors to the economy.

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History and Politics

At its height, the Incan Empire was the largest nation on Earth. The city of Cuzco, located in present-day Peru, was the center of Inca life and a hub of wealth and sophistication.

In 1532C.E., Spanish explorer Francisco Pizarro arrived in the middle of an Incan Empire that had been weakened by civil war. At the Battle of Cajamarca, Pizarro managed to capture and order the execution of the Inca leader, Atahuallpa. Today, Cajamarca is the site of Yanacocha, one of the most profitable gold mines in the world.

Peru remained under Spanish control for almost 300 years, finally achieving emancipation in 1824. Spain did not recognize Peru's independence until 1879.

The end of the 19th century saw Peru ruled by a succession of dictators, and the early 20th century was a time of economic struggle for the nation. From 1968 to 1980, Peru was under military rule. Even after the restoration of democracy, however, Peru was deeply divided politically and economically.

In the 1980s, the Peruvian government began to increase private ownership of land. At the same time, Maoist rebels from a group known as Shining Path (Sendero Luminoso), led by Abimael Guzman, waged a brutal guerrilla war against the state. During the Shining Path war and the Tupac Amaru Revolutionary Movement, nearly 70,000 people were killed in terrorist attacks or counter-terrorist campaigns. Today, the groups no longer control large parts of the country, but violence is still a problem.

In 1990, Alberto Fujimori was elected president of Peru. Although Fujimori made progress in some areas, his administration was notoriously corrupt, and in 2000, he resigned from office and exiled himself to Japan.

In the spring of 2001, Alejandro Toledo was elected president. His term in office has been plagued with allegations of corruption; Toledo's approval rating has ranged from about 8 percent to 14 percent over the course of his term. Most Peruvians complain that they feel unsafe on the streets because of an increase in crime.

The next presidential election in Peru is in 2006.

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Sources: BBC News; Bloomberg; CIA World Factbook; Global InfoMine; Journey to Planet Earth, PBS; U.S. Library of Congress; Wikipedia.