Biology of Business

Lima

TL;DR

World's second-largest desert city — 10 million people, 9mm annual rainfall, and a 15x water price gap between rich and poor that defines its economy.

City in Lima Province

By Alex Denne

Lima is the second-largest desert city in the world, after Cairo — nearly 10 million people living in a place that receives 9 millimetres of rainfall per year. Sixty percent of Peru's population lives on the coastal strip west of the Andes, where just 2% of the country's water resources exist. That single statistic explains more about Lima's economy than any GDP figure.

Francisco Pizarro founded the city in 1535 on the banks of the Rio Rimac, whose name in Quechua means 'talking river' — an irony, given that the Rimac is now so polluted by mining effluent and agricultural runoff that it barely speaks to anyone's health. Lima served as the capital of Spain's South American empire for three centuries, and that administrative function created the gravitational pull that persists today: the city grew from 10% of Peru's population in 1940 to 30% by 2010, producing roughly half the country's GDP.

The Wikipedia entry leads with colonial architecture and cuisine. What it understates is the scale of Lima's water inequality. Over 635,000 residents lack running water entirely. Those with piped connections pay 40 cents per cubic metre; those without — overwhelmingly in the informal hillside settlements called barriadas or pueblos jovenes — pay $6 per cubic metre from private tanker trucks. That is a 15x price premium for being poor. A literal 'wall of shame' separates the district of Santiago de Surco, where residents consume 200 litres per person daily, from adjacent informal settlements where families ration buckets.

Peru's broader economy has performed well — GDP per capita rose from $2,100 in 2003 to over $8,400 in 2024, and growth outpaced most of Latin America in 2025, driven by high copper prices and mining investment. But 47% of economic activity occurs outside the formal sector. The informal economy is not a bug; it is a parallel metabolic system processing resources that the formal system cannot absorb. Water-intensive sectors — mining, manufacturing, agriculture — contribute nearly two-fifths of GDP, creating a direct competition between economic production and human survival in a desert.

The biological parallel is resource allocation under scarcity: Lima operates like a desert organism, channelling its single river through competing demands — drinking water, agriculture, mining, industry — in a zero-sum game where every allocation to one use starves another.

Key Facts

10.0M
Population

Related Mechanisms for Lima

Related Organisms for Lima