On economical ground the impact of democratization has not been positive in Latin American. Terry Lynn Karl comments that Latin American nations are turning “increasingly unequal” from the 80s. Costa Rica according to him is an exception though. As per Birns, “You don’t have an authentic brand of democracy in Latin America.
You have a faux brand of democracy”ii. Fujimori, who attained the self-coupe government in Peru for over a decade, has decided to retire when videotape exposed the corruption of his government. He came to power and gradually destroyed all the institutions. Macher rightly called it a “kidnapped country”iii. In such a situation, if Fujimori retires it will not be easy for the nation to adapt to a democratic structure since there is practically no institution existent. Following Clark, one may realize that “Free and fair elections are not enough for creating real democratic reforms until you have all the institutions that go along with it, including a strong and independent judiciary”iv. Statistics reveal that above 25 percent of people in Latin America are surviving below poverty linev. The inequalities often stem from the distribution of plantations and mining mechanisms. When there is a dominant elite section, which is always banking upon cheaply available labor, the outcome is bound to lead to inequality. This system was existent in the colonial period and has carried its traces even in the postcolonial era. Also the past decade witnessed a reduction in governmental role in the economic affairs of the states.
Owing to the restructuring of the economy, state had little power in helping the people out of their conditions. In the private sector labor retrenchments occurred which made many people jobless.