Peru’s population today is around 28 million and growing about 1.6 percent each year. Nearly half the people, or 45 percent, are of indigenous blood and reside in the Peruvian highlands. Of the remaining population, 37 percent are mestizo and 15 percent are of European descent. The remaining 3 percent of the population comprises those of African, Japanese, and Chinese descent and also includes a tiny pocket of 250,000 Amazon natives who are divided into 65 ethnic groups. There remains a cultural and economic divide, passed down from colonial times, between the upper class of European descent and the middle and lower classes of mestizos and Indians. But Peru’s racial dividing lines have, even since the colonial times, been based more on economics than skin color. Marriage certificates from the 18th century, for instance, reveal that affluent mestizos were automatically considered criollos because of their wealth. In the same way, a full-blooded Indian in today’s society goes from being an indio to a mestizo the moment he or she abandons native dress and puts on western clothing.

During Peru’s economic growth of the mid-1990s the average wages of Peruvians also increased. The Fujimori government built new schools throughout Peru’s impoverished regions, and the illiteracy rate has dropped below 10 percent (though it is still about 13 percent for women). Medical care also spread, dropping infant mortality rates from 57 per 1,000 births in 1991 to 31 in 2006. An estimated 98 percent of all infants in Peru now receive immunizations.

Despite these advances, Peru remains a crushingly poor country. More than half of Peru’s population, or 51 percent, live beneath the poverty line of US$54 per month, and 24 percent live in extreme poverty, earning under US$32 per month. Nearly 40 percent of the people live in the informal economy—that is, they live in isolated country hamlets or disenfranchised city slums and eke out a living outside of government taxes and services.