A terrible fire late last month in Lima left a toll of 291 dead and hundreds of wounded. The victims were drawn almost entirely from the millions of marginalized poor who go daily into the streets of Peruvian cities to earn a few cents or buy cheap goods.

The catastrophe began at approximately six in the afternoon of December 29 when someone set off fireworks in the Mesa Redonda shopping area in Lima’s historic center. Mesa Redonda is an informal market where thousands of vendors sell their products in the most precarious conditions imaginable.

Traditionally in December, Peruvian workers and poor buy hundreds of tons of fireworks in Mesa Redonda to celebrate Christmas and New Year’s.

A videotape revealed that the fire spread rapidly, consuming five blocks in a few minutes because the ground was covered with gunpowder that had fallen out of fireworks boxes as they were unloaded for sale.

Forty fire trucks and 440 firefighters valiantly fought the blaze for three hours. Thirty people trapped in a mezzanine were rescued by the firefighters.

Towards midnight a macabre scene of pain and death dominated the capital. Remains of wood, paper and plastic gave off foul odors. Vehicles with drivers and passengers stood charred in the middle of the road. On one corner, more than a dozen bodies stood completely burned, joined to their pushcarts.

In another area, 30 bodies were found squeezed into a six-foot-square space. Many merchants were asphyxiated when they sought refuge in their stores and closed their doors to protect themselves from looting. Dozens were electrocuted, possibly due to a surge in a nearby electrical station caught in the fire.

In the following days, family members descended on central Lima hospitals and the morgue, holding photographs of their disappeared loved ones. Many held on in vain to the illusion that someone would bring them news that their family members were still alive. In the confusion, the number listed as disappeared rose to more than 800.

Close to 4,500 merchants and vendors lost their jobs and scarce savings in the fire. It is estimated that more than 30 percent of the victims were youth, and the majority was female.

Judging from the names in funeral notices published in Lima newspapers—Huilca, Canchari, Ucañay—a large percentage of those who died were from the Peruvian highlands, people who were part of the migration to the city over the last 20 year. Hundreds of thousands of peasants have left poverty, drug traffickers and the dirty war between the army and the guerrillas of Sendero Luminoso in the countryside for the capital’s crowded shantytowns.

Reports surfacing in connection with the Mesa Redonda fire paint an alarming picture of poverty, social polarization and state corruption in Peru that combined to produce such a mass tragedy.

Government and police corruption

It is known that the Interior Ministry authorized the importation of 1,100 tons of fireworks, the majority of which was destined for Mesa Redonda. During the month of December the municipality of Lima repeatedly tried to control the situation. While at one point, thousands of police were to be sent to block the sale of pyrotechnical materials, the majority of them were withdrawn from the area on the order of the general in charge of the police, Luis Sanchez Arias.

After the disaster, General Sanchez was retired from the service. An investigation is pending into the relationship between police commanders and the fireworks importers.

It has also been requested that the Investigative Commission formed by the government examine the judges who handed down decisions favoring the merchants without paying any attention to documents that demonstrated the dangers of selling fireworks in the Mesa Redonda area.

Polarization of wealth

But the Mesa Redonda tragedy cannot be explained solely by the negligence and corruption on the part of judges and police officials for whom the lives of the poor are of no value. The disaster is also testimony to the failure of the free market measures imposed by the International Monetary Fund and the government of the United States. These policies were carried into practice by the corrupt regime of former president Alberto Fujimori and are being continued by his successor, Alejandro Toledo.

After a decade, the policy of opening up the national economy to the world market, the privatization of billions of dollars worth of state industries, the influx of US, Spanish and Chilean capital, combined with the corruption of the state apparatus has produced the greatest social polarization in the history of Peruvian society.

The economic situation worsened with the Asian crisis in 1998, natural disasters such as El Nino, and the current world recession. These factors combined to put an end to the rise in the economic level of certain sections of the population as well as any hopes that the free-market model would favor the middle and working classes.

But the ghettoization of the center of Lima and the upsurge of street markets for the poor like Mesa Redonda are the result of sharp social polarization, which intensified precisely with the implementation of the policies proposed by the IMF and Washington.

Up until the 1990s, the historic center of Lima was an area of banks, mining companies, government institutions, universities, restaurants and established stores selling clothing, jewelry and household items. But with the penetration of globally mobile capital, all of these economic sectors abandoned old Lima to move into new luxury buildings in residential neighborhoods more appealing to foreign investors and the local bourgeoisie.

Big buildings equipped with the latest digital technology and based on architectural designs, which are the equals of corporate headquarters in New York or London, were built by the Spanish banks Santander and Bilbao Viscaya, as well as hotel chains like Marriott and Sheraton. US, Chilean and Peruvian capital threw up luxurious shopping malls in the residential neighborhoods of San Isidro, Miraflores and La Molina.

All along the shore of the Miraflores and Barranco areas, luxury residential buildings have been constructed offering wonderful views of the Pacific. In some, apartments sold for half a million dollars until the recent recession depressed the real estate market.

While a minority of Lima residents has seen a fabulous increase in wealth—growing accustomed to imported cars, beach houses, cellular phones, cable TV, the Internet and frequent shopping trips to Miami—the great majority of the city’s population has seen its living standards plummet.

More than 50 percent of Peru’s population lives under conditions of grinding poverty. National industry has diminished in the face of competition from cheap imports, principally from Asia. Mass unemployment continues to rise, and the small middle class has practically disappeared.

With the destruction of industry and changes in labor laws demanded as part of the free-market plans facilitating unrestricted layoffs, hundreds of thousands of workers have found themselves forced into the informal economy upon which the majority of the urban population subsists.

Impoverishment of Lima’s center

This economy has been built up on the margins of the law and by people with scarce resources, unable to meet the requirements of building codes or procure licenses needed to establish businesses. It is estimated that 50,000 people work in the informal markets in Lima. The majority of them are poor people from the provinces or people who have lost their jobs, such as nurses, accountants and public employees.

The losses of the Mesa Redonda fire amount to $10 million, not counting destroyed buildings. This amount, which is small by the standards of industrialized countries, represents the combined resources of the 4,500 people who worked in the five blocks that were destroyed.

A look at the conditions of the informal markets that have proliferated in Lima—side by side with the construction of the new city for the rich—demonstrates that the outbreak of such a disaster was just a matter of time.

Many of the buildings in the area were constructed of a mixture of straw and mud, which has been used since colonial times. Short circuits, like the one that cost the lives of dozens of people in the fire, have been commonplace and a principal cause of previous fires in other informal markets.

In one of the most popular informal markets, Gamarra, located in the working class neighborhood of La Victoria, more than 90 percent of the galleries have exits that are narrow, impeding response by firefighters. Electricity lines are uncovered and hang like spider webs from the roofs, and tap water is undrinkable.

The graphics gallery of Virgen Del Carmen is a closed-in building with 34 printers competing for customers. There is no ventilation, nor are there windows or emergency exits.

The city’s market grounds and commercial complexes have suffered fires due to faulty electrical wiring and the negligence of the vendors. Many roofs are made of plastic and cardboard. Electric cables are not protected and in many cases are looted from neighboring buildings.

The situation is similar In El Hueco, an informal market established in 1983 by 400 street vendors who bought a piece of abandoned land, a pit where a building was to have been constructed. This market came close to burning down in 1996 and 2001. The same conditions are to be found as well in the discotheques that have sprung up in poor neighborhoods and have already produced various tragedies.

Conditions in Lima are not the exception, but rather the rule for all Peruvian cities. It is estimated that more than 70 percent of the country’s markets and commercial centers do not comply with minimum safety regulations.

The remedies offered by recently elected president Toledo—free burials, relocation of those wiped out, health care and education for orphans and $20 million plus a new tax to expand firefighting resources—will do little to change the conditions of poverty and oppression of Peruvian workers that gave rise to the Mesa Redonda catastrophe.