Humala won the elections and was sworn in as Peru's president in July 2011 for a five-year term. As a complement to the new law, the Humala administration also created an office of conflict prevention. Deep social divides over how to pursue development continue to undercut political stability. The more radical elements of Humala's original support base and his party, Gana Peru, urge the pursuit of more leftist policies, such as nationalization of strategic industries, which Humala called for during the election campaign. Forces that resist more radical policies include a strong business sector; a conservative, wealthy elite; a centrist middle class; and a divided Congress. Humala's party does not have an outright majority; it has 43 seats to Fujimori's party's 36 seats in the 130-seat chamber. Socioeconomic Conditions

Peru's economy has been stronger than virtually all other Latin American economies since 2001. President Humala has maintained that "Economic growth and social inclusion will march together," and that he will expand social programs to reduce the number living in poverty. Indeed, the percentage of the population living in poverty in some mountain, jungle, and rural areas is over 60%. As mentioned above, President Humala and the Peruvian Congress have already approved an increase in mining royalties expected to generate US$1.1 billion a year to fund social development programs aimed at closing that social and economic distribution gap. Social unrest and debate over exploitation of natural resources is likely to remain a challenge for the Humala government. Relations with the United States

Peru and the United States have a strong and cooperative relationship. The United States supports the strengthening of Peru's democratic institutions and its respect for human rights. The two countries also cooperate on environmental protection and counternarcotics efforts. In the economic realm, the United States supports bilateral trade relations and Peru's further integration into the world economy. The Obama Administration requested $73 million for Peru for FY2013. Counternarcotics Efforts

A dominant theme in the relations between the two countries is the effort to stem the flow of illegal drugs, mostly cocaine, from Peru to the United States. Trade and Environment

The United States is one of Peru's top trading partners. The U.S.-Peru Trade Promotion Agreement (PTPA) went into effect February 1, 2009.
This report provides an overview of Peru's government and economy and a discussion of issues in relations between the United States and Peru.
Peru and the United States have a strong and cooperative relationship. Several issues in U.S.-Peru relations are likely to be considered in decisions by Congress and the Administration on future aid to and cooperation with Peru. The United States supports the strengthening of Peru's democratic institutions, its respect for human rights, environmental protection, and counternarcotics efforts. A dominant theme in bilateral relations is the effort to stem the flow of illegal drugs, mostly cocaine, between the two countries. In the economic realm, the United States supports bilateral trade relations and Peru's further integration into the world economy. The United States is Peru's top trading partner. The U.S.-Peru Trade Promotion Agreement (PTPA) went into effect in February 2009. The Obama Administration requested $73 million in foreign assistance for Peru for FY2014 to advance these objectives.
Ollanta Humala, of the left-wing Gana Peru, was sworn in as Peru's president in July 2011 for a five-year term. Gana Peru initially won 47 seats out of the 130 seats in the unicameral Congress, requiring Humala to rely on political alliances with lesser parties in order to pass legislation. As Humala has moderated his stance, he has lost left-leaning allies within his and other parties. Deep social divides over how to pursue development continue to undercut political stability. The more radical elements of Humala's original support base and his party urge the pursuit of more leftist policies, such as nationalization of strategic industries, which Humala called for during the election campaign. Forces that resist more radical policies include a strong business sector; a conservative, wealthy elite; a centrist middle class; and a divided Congress. Social unrest, especially over exploitation of natural resources, remains a challenge for the Humala government. It has established an office of conflict prevention and taken other actions to reduce social conflict.
Since 2001 Peru's economy has been stronger than all others in the region, with its growth due mostly to the export of natural resources. High economic growth, along with social programs, has helped to lower Peru's overall poverty rates. Nonetheless, in some jungle, mountain, and rural areas of the country, over 60% of the population continue to live in poverty. The income distribution gap remains quite large as well. This economic disparity has contributed to rising social unrest. President Humala submitted, and the legislature approved, a bill increasing royalties mining companies must pay. The government estimates the royalties will generate about US$1 billion a year, which it will use to finance social development programs intended to narrow both the social divide and the economic distribution gap.