A lot has been written in recent days about the well-deserved Nobel Prize for Peruvian novelist Mario Vargas Llosa. I don't just see it as a long overdue recognition for Vargas Llosa, but as new evidence that -- economically, socially and culturally -- Peru is becoming one of Latin America's most promising countries.

By almost any measure, Peru is doing very well.

Economically, Peru is expected to grow by 8.3 percent this year, more than any other major Latin American country, according to the latest International Monetary Fund projections.

More importantly, it has been growing steadily for about a decade, and inflation remains among the lowest in the region, at a projected 1.7 percent this year.

Investments are booming, attracted by the country's political and economic stability, and exports rose by 35 percent during the first eight months this year, the IMF figures show. While part of Peru's economic growth is due to high world commodity prices, the country's free trade deals with the United States, the European Union and China are accelerating the economic expansion.

Socially, Peru has reduced poverty from 54 percent to 35 percent of the population over the past 10 years, according to World Bank figures. President Alan Garcia -- a one-time populist turned responsible economic manager -- said in a recent speech to the United Nations that he expects the poverty figure to drop to 30 percent of the population by 2011.

Culturally, in addition to having its best known living writer win Latin America's first Nobel literature award in 20 years -- Mexico's Octavio Paz won it in 1990 -- Peru is excelling on many other fronts.

Painter Fernando de Szyszlo is one of Latin America's most recognized artists worldwide. Writers such as Alfredo Bryce Echenique, Alonso Cueto and Santiago Roncagliolo are becoming household names well beyond Peru's borders. Economist Hernando de Soto is perhaps Latin America's best known contemporary economic thinker.

Peruvian cuisine -- a mixture of indigenous, Spanish and Asian cuisine -- has in recent years become Latin America's most trendy gastronomic phenomenon in New York, London or Paris. Peruvian restaurants such as Astrid & Gaston have opened branches around the world. My own favorite, La Gloria, in Lima, may be one of the best eateries in Latin America these days.

Granted, Peru has yet to overcome many problems. As Peruvian intellectual and politician Alfredo Barnechea reminded me recently, the country is experiencing an ``asymmetrical growth,'' in which the Indian-populated Andean south is growing at a slower pace than the country's northern provinces. Huge mining investments in the south are not generating as many jobs as construction and industry in the north, he explained.

Also, part of Peru's success is due to record world prizes of gold, silver, copper and zinc, some of the country's top exports. If these commodities go down in value, it's unclear whether Peru will be able to continue growing at its present rates.

And Peru is a noisy democracy, where political and economic scandals break out every day. Not surprisingly, Peruvians have little mercy with their presidents: Garcia's popularity is at only 26 percent, and his most recent predecessors fared even worse.

But progress is visible. I was pleasantly surprised on a recent visit to notice that -- unlike when I first started traveling to that country three decades ago, when it was one of the most rigidly racially segregated societies in the region -- you see a growing ethnic diversity in Lima's restaurants.

And Lima, until a decade ago one of the ugliest cities in Latin America, where everything seemed gray, has a lot more greener places. A modern boardwalk with art-decorated public parks along its coastline has turned at least the city's coastal neighborhoods into tourist spots.

My opinion: With all its imperfections, and coming from way behind, Peru is poised to become the next Chile.

It has been growing steadily for more than a decade, under both center-right and center-left governments. It is proving -- much like Chile, Uruguay and Brazil -- that the most successful countries are the ones who bet on economic continuity and political democracy, rather than on messianic radical populisms.

If it continues on its present course, as seems most likely, Peru will be increasingly known for much more than its Nobel Prize winner.

 

Available at Amazon.com:

The Great Gamble

At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes

 

 

(C) 2010 Andres Oppenheimer