Assessing Peru’s Status: Is It a Third-World Country?

Introduction: Third-world country origin

According to Osondu (2011), the origin of the term ''third world'' has been theorized by various researchers for decades. Since Alfred Sauvy's 1952 description of the term ''third world'' it has slowly eroded into the 21st-century understanding of the term. The term, however, became popularized in 1955 in the 1st Non-Aligned Movement conference held in Bandung. It was during this time that newly decolonized countries that had received independence started to identify themselves with the term in the hopes of venturing or pursuing neutral, unaligned foreign policies and not choose sides between the capitalist economies (of North America and Western Europe) and communist countries (of Eastern Europe and the Soviet Union). The term was first used politically and not economically, and it is a product of the Cold War between capitalist and communist countries, later referred as first- and second-class countries (Osondu, 2011). The Communist countries were led by the Soviet Union, while capitalism by the United States. However, with recent developments and evolution in the increase in self-awareness and self-consciousness, the term 'third world ' may seem derogatory; hence, substitutions such as developing country or emerging economies are used. Peru is situated in the global south. This country is located on the Pacific West Coast of South America. Despite its vast traditions and natural resources, the country grapples with uneven development and inequalities, which question whether it should be categorized as a 'third-world ' country.

Historical context

The Cold War began soon after World War II, transforming almost half of the 20th century. The war was purely between the communist, that is, the Soviet Union, and the capitalist, that was the United States. The war was beyond military and often involved ideologies and political and cultural factors. Meanwhile, countries that were not involved in these conflicts were third-world countries that were not economically and strategically capable of being in either category (Qadir, 2024). According to Andrews (2025), the term 'third world' is often used to refer to 'poor ' or ' developing' nations, while many Western countries are considered ‘first world’ nations, and we rarely hear about 'second world' nations. These distinctions and descriptions are as a result of geopolitics brough about by cold war. According to Andrews (2025) 'third world' countries comprised of those that were not part of the cold war alignment. Examples include European colonies, the Middle East, Asia, and Latin America. With time, the context of the second word becomes obsolete, while the first and third worlds remain rooted to this very day. Many scholars avoid the term 'third-world country as it is taken to be degrading and a basis for stigmatization of other nations that are considered economically behind. Blanket terms such as 'developing', 'global south', 'middle-income', and 'emerging' have since been adopted. Given this notion, it is important to assess Peru's performance using modern developmental indicators.

Peru's economic development

The country is considered the 5th largest economy in Latin America. Since the early 2000s, remarkable development transformation has been observed in the country, with a GDP estimated to be well over $280 billion as of 2024. Several economists are of the opinion that the country is on a steady path to doing better in subsequent years. With a population of 34 million, Peru is placed 21st within the region in terms of the highest GDP per capita, slightly above the regional average. The economic strength of Peru lies in the exportation of primary resources, ranging from gold, copper, and natural gas, positioning itself well within the competing markets while ensuring service provision for a greater percentage of its population and steady economic growth. According to the World Bank, Peru is an upper-middle-income country that has covered a long distance. For instance, between 2002 and 2013, it had a poverty reduction of about 36%, while its per capita GDP was over $8400 by 2024, while in 2003, it was about $2100. On the positive side, the country has also seen a protracted slowdown of its economy, dropping to 6.2% by 2014 and to 2.4% by 2024. The country also has very high informality, which weakens development, weakens institutions, and unstable political landscape, in addition to other regional disparities.

Social development

As mentioned above, Peru's population stands at 34million people with a human development index of 0.794, which is high. These metrics are compiled by UNDP for quantifying a country's achievement in health, knowledge, and basic standard of living. In the healthcare system, Peru has made considerable progress in the last decades. For example, Peru has increased health insurance coverage through reforms since 2009 and is nearing achieving universal health coverage, leading to improvement in the general population, more so in poor and underserved rural communities. Nonetheless, its health system is still struggling to serve different populations—for example, inequitable access to high-quality care due to a lack of integration and coordination. Education-wise, only 2% of its population holds a master's, which is below the OECD 16% average, which is an indicator of limited progression in higher learning. Public investment per learner outside tertiary stands at about $1984, which is low and near the bottom of OECD. Gender and social inclusion are major challenges in Peru; however, the country witnessed a 20% increase in women's ownership despite still recording a 2% gender gap as of 2021.

Governance and political stability

Peru is a country grappled with high-profile corruption scandals that have undermined public trust, even as multiple peaceful transfers of power have been executed through its democratic political institutions. From various reports, it follows that its social system began to weaken since 2022 as a result of the violent protests. Moreover, religious groups suffer the most from discrimination, political inequities and unfair representation. The country first witnessed its first democracy between 1980 and 85. The country has since undergone a major political transformation, but still lags due to factors such as corruption and inequities. Such factors discourage investors from coming in, which in turn affects economic development.

Environmental and structural challenges

The country is blessed with extensive natural resources such as copper, natural gas and gold. These have long contributed to its economic standpoint. However, because of overdependence on them, there has resulted in environmental degradation, deforestation, and pollution. Equally, Peru is also feeling the devastating impacts of global warming, for instance, the loss of biodiversity in the Amazon. This has therefore forced the country to invest in strategies that can lead to a sustainable environment through sustainable practices. Besides, development disparities are propelled by inequalities in rural-urban development

Comparative perspective

As mentioned, Peru is the 5th-largest economy in South America, right after Brazil, Argentina, Colombia, and Chile. This means that Peru is ahead of Ecuador and six times ahead of Bolivia, but seven times behind Brazil, the largest economy in that region. This places Peru in the middle-income position rather than 'third world ', which is a term often used to refer to countries that are poor. Despite the persistent challenges of inequities, a weakened legislature, political turmoil, and high cases of corruption, the country can still do well if it implements the right strategies to become a high-income country in the next two decades. It is also important to mention that the term 'third world' is no longer used because of its negative connotation to other countries that are behind but are working to become better.