Class,
I hope you are enjoying your visit to the Imperial City of Cuzco!
I woke up early to review your postings and I was pleasantly surprised. You are doing great at seeking a sober way of reconciling all the stimuli that hit you and your own personal assumptions. It pleases me to see that some of you spent time interacting with the real people, asking them questions, and the way you have transferred their answers into the blog being careful not to reinforce stereotypes. I know this is not easy to do and I commend you for the effort!
As a way of clarification,
- From 1980-1990 Latin America experienced a great depression also known as "The Lost Decade." It was the result of a large foreign debt and the raise of interests of this debt by Ronald Reagan administration. Country borrowed money at 4.5% and in the 1980s this interest rate was increased to 21%. Whomever carries credit cards should imagine the impact of changing interest rates on your personal budget. Well, countries found themselves devoting up to fifty percent of the GNPs in paying the debt. Long story, so little time to explain.
- Peru had its own version of Lost Decade. As it were not enough, we had economic depression along with an insurgency led by two well organized guerrilla groups Shinning Path (Full name: In the Shinning Path of J.C. Mariategui) and MRTA, both were extreme Left wing militarized movement.
War and Depression is not a good combination. Among man things the country lost most of its professional class due to immigration. Those who remained, saw their lives trashed by lack of work or violence. The countryside was emptied because most migrated to Lima. Another long story with so little time to explain. The country infrastructure was severely damaged by Shinning Path. Most electrical towers were blown apart... The irony was that the country was in debt in order to complete the electrification of the territory, while Shining Path was blowing these towers in order to create terror.
Basically, what you are seeing is a country that desperately is trying to re-build itself after the Lost Decade.
On the issue of police force. The ratio is 1 policeman for 1500 people in Lima. Nor enough for a city of over 8 million people. Police presence varies depending on the District. In Miraflores, for example, between policemen and Municipal security personel, the ratio approximates that of the USA, 1 policeman/securite per 350 people. Alas, social inequality again!
The police display that you saw during your visit of Lima had a very important reason: This week  President Humala denied Presidential Pardon to ex-President Alberto Fujimori serving jail time for human rights abuses. Their followers threaten with demonstrations in support of Fujimori.
That's it. Continue enjoying your stay in Peru!!!