Mining and Tourism

Urbanization and Social Fragmentation in Latin American Cities

Whereas the urbanization of Latin America in the twentieth century took place primarily in metropolitan and capital cities, urbanization processes there have shifted to periurban areas and intermediate cities. Some 37 percent of the population now lives in urban areas with less than half a million inhabitants (Satterthwaite, 2007). Further urbanization of the continent is expected to take place not in large metropolitan areas but in intermediate cities (Portes and Roberts, 2005; UN-Habitat, 2010). Latin American urban studies predominantly address large metropolitan areas and megacities and the myriad of problems associated with them (e.g., Angotti, 1996; Gilbert, 1996; Koonings and Kruijt, 2009; Moser, 2009; Perlman, 2010). They have recently drawn attention to the experiences of the urban population with marginalization, stigmatization, social inequalities, and the physical creation of class barriers (Caldeira, 2000; Fay, 2005; Perlman, 2010; Rodgers, 2004). Although the figures show progress in poverty reduction, poverty in Latin American cities has become even more structural, segmented, and exclusionary (Ward, 2004). Latin America now has the most unequal distribution of wealth of all regions in the developing world (UN–Habitat, 2010: 45). Although the urban poor are no longer excluded from formal institutions, they are still faced with embedded structures of social exclusion that severely reduce their livelihood opportunities (Roberts, 2010). While the boundaries between centers and peripheries may be challenged, in terms of socioeconomic opportunities the distinction between poor and more prosperous residents is still very sharp (Perlman, 2010). Several writers have observed a rising number of gated communities in Latin American cities (Borsdorf, Hidalgo, and Sánchez, 2007; Coy, 2006). These communities contribute to spatial segregation, socially divided environments, and growing inequality (Roberts, 2010). The physical creation of class barriers in the form of what Caldeira (2000) calls “fortified enclaves” has become ever more evident in the contemporary Latin American urban landscape.

However, few writers have explored urban transformations in intermediate cities and incipient urban areas (for an exception, see Klaufus, 2010). To the extent that their dynamics have been studied, these cities are regarded as the antithesis of large metropolitan areas. Because of their human scale and their secondary position in national urban hierarchies, they are generally considered livable and harmonious places that offer the potential for prosperous urban development (Bolay and Rabinovich, 2004; Herzog, 2006). Although they are very heterogeneous, this article focuses on urban transformations in these intermediate cities, where foreign entrepreneurs, expatriates, and tourists are introducing global lifestyles, transnational practices, information technology, and cultural flows. It scrutinizes the effects of the often contradictory and conflicting claims these “transnational elites” (see Beaverstock and Boardwell, 2000) make on the city. Intermediate cities are the places where current trends of urbanization are the most obvious and as such deserve more attention in Latin American studies. Focusing on the transformations in Cajamarca and Cusco caused by mining and tourism, this article examines the sharp contradictions that these industries have brought about and the challenges and frictions that these intermediate cities are facing. It shows that although in terms of size these cities cannot be considered real metropolises, in terms of urban dynamics, transformations, and frictions they show some comparable characteristics.

Mining, Tourism, and Urbanization in Peru

In recent decades, the mining and tourism industries have expanded tremendously throughout Latin America. Peru is near the top of the list of countries in which a boom in mining and tourism has constituted the basis for an export-oriented economy. Peru already ranks sixth in the world in levels of mining investment (Bebbington and Bury, 2009: 17296), but the Peruvian Ministry of Energy and Mines has announced that it will invest a further US$51.49 billion in new mining projects (Andina, 2011). Bebbington, Bebbington, and Bury (2010: 309) report that while in 1990 mining claims were virtually nonexistent in Peru, by 2007 claims had been made to almost 3.5 million hectares of the country.

The tourism industry in Peru underwent a huge boom in the 1990s and is an important source of outward-oriented growth. In 2004, tourism accounted for over 3.3 percent of the country’s gross domestic product, amounting to over US$1.142 million (UNWTO, 2006). After mining and oil, tourism is Peru’s most important export product (MINCETUR, 2007).

These developments have changed the country’s socioeconomic landscape dramatically (Bebbington, 2011; Bebbington et al., 2008; Bury, 2005; Steel, 2008; Ypeij and Zoomers, 2006). First of all, the country’s most lucrative industries are in foreign hands, and local participation is often very limited. As in other developing countries, Northern expatriates and high-skilled professionals occupy most of the top managerial positions (Sinclair, 1998: 31). Because revenues from tourism and mining return to foreign countries, developments in these sectors do not necessarily boost the Peruvian national economy. In addition, investments by foreign companies often constitute a direct threat to the livelihoods of local populations. The expansion of mining does not occur in “empty” territories and often conflicts with small-scale farming and other livelihoods of rural people (Hinojosa and Bebbington, 2008). Arce (2008: 42) notes that “the most recent report from Peru’s Defensoría del Pueblo [Ombudsman’s Office] places mobilizations against foreign direct investment as the most common type of social conflict in Peru today” and that 46 percent of these conflicts are related to mining.

The rapid expansion of mining and tourism has channeled the urbanization processes in several Peruvian cities. Intermediate cities that offer access to important mining and tourism sites such as Cajamarca and Cusco have undergone greater population growth than the capital, Lima. Between 1993 and 2007, the population of Cajamarca, for example, grew by 4 percent while that of metropolitan Lima by 2.1 percent (INEI, 2008). The growth of these intermediate cities is driven by national and international investments in mining and tourism. Foreign direct investment in these industries has attracted internal and transnational migrants, and the arrival of foreign investors and international firms has fragmented the urban landscape.

Mining-Induced Migration and Urban Developments in Cajamarca

Cajamarca is located in the northern highlands of Peru and has 162,326 inhabitants (INEI, 2008: 63). Cajamarca has grown significantly, especially since one of the largest gold mining companies in Latin America, Minera Yanacocha, began operations in the region (Bury, 2005: 231). Mining is the most prominent driver of its 4 percent growth rate.

Mining-induced displacement (Downing, 2002) and Yanacocha’s large-scale land acquisition resulted in migration from the countryside to the city. Because Yanacocha uses open-pit mining, it requires huge areas of land. It started acquiring land in 1992 in preparation for exploration (see Bebbington, 2007; Lambrigger, 2007; Sosa and Zwarteveen, 2009) and is now the largest landowner in the department, making it very difficult for campesinos to maintain plots of land for cultivation. Although they have organized in various ways to defend their livelihoods (Bebbington et al., 2008), most of them have sold their land to Minera Yanacocha and moved to remote communities or to the city of Cajamarca. The following précis of an interview with Teresa ¹ (June 2009) exemplifies the flow of peasants to Cajamarca and its consequences for their livelihood strategies.

Teresa is a middle-aged, married woman with five children. In 1993, her husband sold 30 hectares of their land in Combayo to Minera Yanacocha and used the money to buy a house on the outskirts of Cajamarca. When interviewed, neither she nor her husband had found a job in the city. They had always been peasants who worked the land, and they did not know how to make a living in the city. Teresa indicated that life in the city was really difficult because it was impossible to grow their own food there. The family depended on two sons who still had a plot of land outside the city. Thus the link with the countryside was the household’s most important livelihood strategy.

Other peasants who sold their land and moved to Cajamarca have been more successful than Teresa at making a living in the city. For example, several of them perform informal economic activities such as street vending and day labor in the construction sector (Houtman, 2009). Others have found low-skilled, low-paid, and mostly temporary jobs working for Minera Yanacocha (Herrero Izquierdo, 2004), but most of them are in a vulnerable position in their new socioeconomic environment. They live on the poor outskirts of the city, and their livelihoods depend heavily on the linkages they maintain with relatives in the countryside.

Another significant migration flow to Cajamarca is made up of national and international professionals who have been contracted by Minera Yanacocha. As Bury (2007: 385) says, the mining company’s operations “draw on highly skilled mining engineers, heavy machinery operators, and professionals from outside of the region.” As such, increasing numbers of high-skilled professionals from Lima, Arequipa, and other coastal cities in Peru come to Cajamarca to work in the mining industry. The city also accommodates a small number of international migrants who have settled there either permanently or temporarily. These foreign professionals mainly come from Australia, Canada, South Africa, and the United States, and they hold the highest positions in the mining company (Bury, 2007). They contribute to the international aura of the city by introducing foreign currency, consumption goods, and lifestyles.Many of Minera Yanacocha’s high-skilled employees have settled in Baños del Inca, a residential zone a 15-minute drive from the city center. Especially international migrants live in this residential community. The arrival of these new elites increased the community’s population by 20 percent between 1993 and 2002 (Bury, 2007). High land and property prices make it very difficult for local people to gain or maintain access to this zone of the city; only the mining elites can afford to buy homes there. ² Access to consumption and entertainment in this residential zone is reserved for people with very high incomes, as the shops, restaurants, bars, and other places of entertainment charge international prices (Lambrigger, 2007).

Through what Tilly (2006) calls opportunity hoarding, the new mining elites dominate the most lucrative real estate and labor markets. They are also able to access high-quality education at the international school, Davy College, which opened its doors in 1995. All teaching at Davy College is in English; Spanish is an additional course. The school fee is about US$500 a month. The children of the mining elites have enrollment precedence because of an agreement between the mining company and the college. This, coupled with the high school fees, means that education at the school is reserved for the children of the mining elites. They monopolize the best education opportunities in town and thus contribute to the growing discrepancy between the wealthy external actors and the local working classes (Houtman, 2009).

These transformations have resulted in increasing inequality. One resident told that people in Cajamarca started to feel their poverty when the mining company arrived: “Before, poverty was not as striking as it is now; now we can really see the poverty. If there were no Yanacocha, the poverty would be less visible. People would not feel it as much as they do now” (David, interview, June 2009).This informant clearly shares Tilly’s (2006) interactive view of poverty, as he considers the interaction between those who have access to the benefits of the mining industry and those who do not as the source of growing inequality in the region. Poverty is not new to the people of Cajamarca, but it has become more evident because the company generates advantages for some and not for others. The enormous growth of Cajamarca has led to increasing social and spatial segregation, causing the inhabitants to describe it as “an expensive but poor city” (Jorge, interview, July 2009) or “a city of contrasts” (Navarro Sarmiento, 2007).

Tourism and Urban Transformations in Cusco

Cusco is located in the southern Andes of Peru at approximately 3,300 meters above sea level. Although the city is larger than Cajamarca, it has undergone less explosive growth. In 2007 it had 348,935 inhabitants (INEI, 2008: 63). The historical heritage of the Inca and the colonial past, in combination with its attractive geographical situation in the Andes, has made the city one of the most popular tourist destinations in Latin America. Because of a lack of alternative industries, tourism is the city’s most important income-generator (Flores Ochoa and Van den Berghe, 2000). It has been a booming business in Cusco since the 1990s, and it is growing faster there than anywhere else in the country. Each year the city attracts more tourists than there are residents. This tourist influx has significantly reshaped the urban landscape.

The most significant demographic and spatial changes occurred in the city’s historic center. Tourism-induced displacement has driven out most of the residents of this zone (Hernández Hurtado, 2009). Private houses have made way for tourist facilities such as hotels, pubs, restaurants, nightclubs, travel agencies, and arts and crafts shops. The local population generally does not have the money to pay the excessive land and property prices and is often denied access to tourist venues. When I invited Peruvian friends to go for drinks or a meal in the historic center, they pointed to several tourist places to which they had been denied access because of “being Peruvians, who do not consume as much as tourists do.” They are therefore forced to move out of the historic center to live, shop, eat out, and find entertainment (Estrada Ibérico and Nieto Degregori, 1998). As a consequence, the historic center has been transformed from a residential zone into a huge commercial center that is accessible only to those who can afford to pay the international prices of the luxury hotels, restaurants, and souvenir shops (Chion, 2009).

The municipality of Cusco has put a lot of effort into creating a clean, safe, and attractive environment for tourists. One of its main objectives is preventing the destruction of the historic center of the city. As one official explained, the authorities have to make an extra effort to satisfy the tourists’ needs by investing large amounts of money in public order and security (Hector, interview, June 9, 2005). In addition, they have to protect their archaeological sites and cultural patrimony in collaboration with UNESCO. As part of this effort the authorities have tried to clean Cusco of urban undesirables such as local poor people, beggars, and street vendors, who are historically associated with indecency and considered a potential threat to the tourists’ sense of comfort and safety. The municipality of Cusco considers it better to hide this “uncivilized” side of Cusco from potential foreign industrialists and investors (Seligmann, 2004: 23). One of Cusco’s municipal councilors once explained that the presence of poor local people, and especially street vendors, might harm the modern image of the city (Lucho, interview, July 2007):

Because the tourists come to visit our nation and our town, they are not allowed to buy from street vendors. They do not like buying on the street, because things in their countries are more organized, so they always try to buy in formal establishments, where they can make a complaint if necessary. That is their guarantee.

The local anthropologist J. A. Flores Ochoa argues that the center is becoming a “tourist ghetto” in which the majority of the local population participate only on the margins.

Foreign investors and entrepreneurs have also left their imprint on the historic center. Increasing numbers of foreign transnational corporations and global chains such as McDonald’s and Hilton Hotels and Resorts have launched development projects in the city (Chion, 2009). As does the mining industry, these foreign companies employ Northern expatriates to occupy the highly paid professional and managerial positions. These transnational migrants play a significant role in spatial segregation processes in the city by making the real estate market less accessible to local investors. In 2008, for example, one of the oldest coffee shops (El Ayllu) in Cusco’s main square had to close its doors. A local journalist wrote that it had had to make way for a Starbucks, which could afford to pay much higher rent, and went on to say that it had become virtually impossible for local investors to buy property in the historic center (Guerrero de Luna, 2008).

These socio-spatial transformations of the historic city center have been accompanied by developments in the rest of the city. The real demographic expansion took place in the impoverished residential neighborhoods known as pueblos jovenes outside the tourist center. ³ Even as in Cajamarca, these neighborhoods are home to a large number of rural dwellers who came to the city in the hope of finding better livelihood opportunities and to people who can no longer afford to live in the tourist center (Hernández Hurtado, 2009). In general, the residents of these neighborhoods have precarious living conditions and face various infrastructural restrictions (Amilcar Sánchez Morales, 2002). They have to struggle to access the labor market, public transport, rubbish collection, water and electricity supplies, sanitary services, and health services (see De Vries, 1991; Villegas Ormachea, 1986). Streets that are not tarred become mud puddles during the rainy season and raise large clouds of dust during the dry season. Access to running water is a general problem; households generally have to share a collective tap that provides running water for only a few hours a day. Villegas Ormachea and De Vries attribute these water problems to an insufficient capacity to install water services, uneconomical water use in tourist areas and other affluent neighborhoods, and insufficient pressure in the water installations to pump the water up the hills.

For some residents of these neighborhoods, tourism offers low-paid, insecure jobs such as mass-producing earrings, street vending, cleaning hotel rooms, or working as porters on tourist hiking tours (Steel and Ypeij, 2005). Several indicated that they relied on their relatives’ agricultural products when they could not make ends meet in the city. For example, Domérica said, “All I can do [referring to a situation in which she ran out of money] is go to my home in the countryside and get potatoes, corn, and wheat” (interview, September 2004). People living on the periphery of Cusco have not broken their ties with the countryside. This is why Flores Ochoa and Tomoeda (1992: 13) argued that “the Andean city should see itself in permanent relation to the rural environment that surrounds it.”

While tourists generally only stay for a few days in the places they visit, their presence—even as the presence of transnational migrants in the city of Cajamarca—has introduced Northern consumption, expenditure, and behavior patterns to the city. These developments have set the stage for a spatially segmented city of wealthy “tourist bubbles”—safe, protected, and normalized environments (Urry, 1990)—surrounded by lower-class neighborhoods. Because of these wealth discrepancies and uneven developments, I consider Cusco a schizophrenic city in which the affluence of tourists and other transnational elites stands in sharp contrast to the poverty of a large proportion of the population.

Conclusion

The Latin American urban landscape has been shaped by the effects of globalization and the internationalization of capital in a great variety of ways. This article has highlighted some of the differences and similarities in this process by examining urban transformations in two intermediate cities in Peru. Because of the presence in them of tourism and mining, respectively, Cusco and Cajamarca function as significant nodes in the global economy, and their daily connection with the global world has been translated into particular urban developments. Tourism-oriented urbanization in Cusco has consumed urban space, whereas mining-induced urbanization in Cajamarca has manifested itself in the occupation of urban space by mining elites. Cusco’s historic center has been transformed into a global town in which transnational lifestyles and enterprises dominate the urban landscape. The local population has been driven out to make way for these forms of transnational consumerism. In contrast, the city center of Cajamarca has preserved its provincial appearance. The impact of the mining industry has been manifested in the development of high-class residential, educational, and shopping enclaves on the periphery of the city.

Although the two cities are not comparable in appearance, the impacts of these socioeconomic and physical transformations have resulted in comparable polarized and fragmented urban environments. In both cities, there are growing disparities between those who have access to global interconnectivity and those who do not. Only the mining and tourism elites seem to have access to Northern consumption and expenditure patterns and to the lucrative real estate markets. The majority of residents are forced to make a living on the periphery. In the words of Roberts (quoted in Ward, 2004), they are being reduced to “second-class citizens” who are disadvantaged with regard to access to urban space and public services.

These urban dynamics are similar to those that characterize Latin American metropolises. The socio-spatial landscapes of Cajamarca and Cusco have become socially fragmented spaces in which the transnational and national elites dominate the economic and political agenda. It is intermediate cities that can no longer escape the spatial segregation, economic exploitation, and poverty that used to be associated almost exclusively with metropolitan centers. These supposedly livable and harmonious urban environments are increasingly jeopardized by the growing imbalance between the livelihoods of local residents and those of transnational elites.

These conclusions are relevant to further research on urbanization and social fragmentation in cities in Peru and elsewhere. Minera Yanacocha is one of the first large-scale mining operations in Peru, but neoliberal reforms are attracting new mining multinationals to the country (Bebbington, Bebbington, and Bury, 2010), and tourism is a booming business that is spreading across the country. The Peruvian state is now promoting the Amazon as an alternative site for tourism development. Urbanization in this region is relatively new, but it is advancing rapidly and in an uncontrolled way. For example, between 1993 and 2007 the population of the city of Puerto Maldonado grew by 4.8 percent (INEI, 2008: 63). The mining industry is also a driver of this urban expansion in the Amazon. Relatively few studies have focused on urban developments in this region and their impact on the local population. Study of the consequences of mining and tourism in the Amazon and elsewhere could help fill this gap and stimulate discussion of how to create harmonious cities that equitably meet the needs of different urban actors.