A very cold sea current runs past Peru's coastline. This combines with the heat of the sun in resulting in the coastline, including the capital of Peru, Lima, being gripped almost all of the year by an ethereal fine grey mist.

The sky is grey, the sea is grey: and because the mist is heavy with water it cannot get across the Andes, so hangs heavily and greyly across the coastal belt.

On the outskirts of Lima (in distance, probably as far as slough is from Central London) there is a rising slope of rough sandy land between the sea and the mountains, probably no more than half a mile wide at its broadest.

This is in the northern cone of Lima; it is known as Ciudadela Pachacutec.

As far as the eyes can see, the rising sand disappears into the mist and the hills.

As far as the eye can see, people's homes cling to the sand and disappear up into the mountainside.

Outsiders would probably describe Ciudadela Pachacutec as a "shanty town" and indeed as a piece of descriptive "shorthand" that is probably the aptest phrase to describe what one sees. But there needs to be some clarification of the definitions here.

Officially, Peru is classified as a "middle income country". That means amongst other things that Peru does not qualify for any of the international debt relief initiatives which are only available to "heavily indebted poor countries". Middle income countries, such as Peru, are meant to raise the money that they need for development off the international money markets. However, much of Peru's wealth, such as it is, comes from minerals and the extracting industries � gold, copper, and other precious and utilitarian metals.

Once extracted, they are almost immediately shipped out of the country and those that actually benefit in Peru from their natural wealth are very limited.

So although the statistics claim that the average income of Peruvians is US $2,100 a year, that figure is very deceptive in that some 14 million Peruvians are estimated to live in poverty (i.e. surviving on less than $2 a day, and that is not what $2 would buy you in Lima � that is what $2 would buy you in New York) and of those, approximately half � some 5-6 million � are living in extreme poverty, i.e. living on less than $1 a day.

The majority of the extremely poor are living in the countryside of Peru where they scratch a living. Many, to better themselves, and with the hope of moving out of extreme poverty, set off for Lima. A few years ago, Ciudadela Pachacutec was invaded by squatters, settlers intent on a better life.

The politics are slightly blurred, but it would seem that in the run up to a Presidential election, it suited one or other Presidential candidate to help the settlers and to promise facilities for the community, such as electricity - and for the people of the Proyecto Piloto Nuevo Pachacutec, they are indeed determined to build a new community � Un Pueblo Construyendo Su Futuro.

On paper the plan for the community shows an area of some 10,000 dwellings, organised for some 10,000 families in a population overall of probably some 40,000, arranged in a regular grid of right-angle roads; each road housing a regular number of units. Looking at the plan, one could be looking at a plan for the regular symmetry of a new housing estate in 1960's South London.

The people who have come to this community are determined to better themselves; they are determined to claw their way out of poverty and in due course to own their own home and have legal title to that home.

They start with nothing, and notwithstanding the political hype from any Presidential candidate, and the Ministerio de Viviendi Construccion y Saneamiento, the only thing that appears to have been provided by central government to the community is access to an electricity supply. Even this is pretty random; there appear to be a series of electricity pylons going through the community but the connections to actual dwellings are clearly haphazard, do-it-yourself connections which at best probably give community dwellers no more power than for a couple of light bulbs in their homes. So far as one can understand, the community dwellers start with no more than an allocation of a plot of sandy land. They have to provide the building materials.

Not surprisingly, most start with the cheapest materials available which is sort of rattan/wattle weave hurdling, out of which they construct walls, and fences for a garden area, or somewhere to keep some livestock. Because of the persistent mist, such hurdling soon gets damp and green and fractured.

From wattling, dwellers when they can afford it move up the construction chain to wood framed walls, a sort of poor man's pre-fab effect, and in due course when they have really made it, they acquire bricks, and build and construct brick walls for their homes.

Very few of the units are yet of brick, and the whole "shanty town" obviously has a totally random pattern of wattling, wood and brick, but with by far the majority of the units still being of wattle and hurdling and straw, then some wood, and a very few as yet made out of brick.

The miscellany of individuality of the units is further elaborated by the addition of different doors and windows, locally constructed wrought iron grilles to protect the windows of sometimes quite elaborate design.

Some of the units have porches, or little lean-to's. Many of the householders have made a real effort to create flower gardens in front of their homes, or vegetable gardens at the side of their homes. There is some livestock to be seen, mostly chickens, and at the corner of most streets, there is a householder who has converted part of their unit into a small shop selling basic necessities.

This may be a "shanty town", but it is not a slum. The people here are taking great pride in their achievements and the community that they are building.

However, the day to day challenges must be considerable.

Although there is access to limited electricity, there is no mains sewerage; there is no running water; without adequate electricity, it is almost impossible for people have access to fridges, so the range of food that can be bought or stored is limited, and the arrangements for waste collection seem to be distinctly haphazard.

Notwithstanding these difficulties, people locally improvise and work together to try and make the best of the community.

So far as sewerage is concerned, most householders have constructed some internal basic pit latrine system. Some with the help of NGOs have managed to develop extremely elaborate pit latrine systems.

One designed by a German Environmental NGO "Alternativa" involves building a pit latrine some three or four feet off the ground, with a complex system of recyling both urine and faeces: the urine recycling seeming to involve a cascading series of mini terraces growing bamboo, and the faeces involving them being used in due course, some considerable months later, as fertiliser for a small patch of ground to grow grass which is then fed to rabbits which are used to multiply and the offspring are sold, in the example that we saw, into a little restaurant to generate further income for the householders � who also seem to do a good line in making fur-lined hats!

There are a number of committees across the community to manage the distribution of water. Water comes into the "Shanty town" in large bowsers, and is distributed to some seventeen points around the community into large blue barrel-like plastic containers. Indeed, practically everyone in the community seems to be on one organising committee or another. There are committees to manage the water, manage the security, and even a committee to manage relations with the press and the media. This is very much a community effort.

The community effort is also symbolised by a number of community kitchens throughout the town. These are run by volunteers. A typical kitchen may provide lunch each day for about 120 people, putting to the best possible use any food ration allocation of rice and other basics from the government and at a cost to local residents of about 20 pence per lunch (although if you are living on less than $1 or $2 a day, that is not an insignificant amount.)

Although the community kitchen has managed to raid some second-hand industrial calor gas-type fired cookers, the range of meals that they can offer is limited because they have no electricity for fridges and anyway at something approaching $300 a fridge, there is no way in which they could afford to buy one.

This of course means that they lose out on any economies of scale and have to trek into the centre of Lima each day to acquire essentials such as chickens and fresh vegetables.

However, notwithstanding the strength of the community effort, and individual determination to get out of poverty, people need to be able to earn a living to actually have an income.

This community is a long way from the centre of Lima and it doesn't seem as if there are many jobs around; this is not an area where there are large factories, or manufacturing or other units keen to employ large numbers of people.

Those in the community who have skills from metal working to car repairs, use those skills to their best advantage. Community leaders justifiably claim that amongst the organising committee they have painters, poets, sculptors and musicians. However, through no fault of their own, and notwithstanding all their own individual efforts, access to employment is fairly limited and one suspects that notwithstanding their enormous energy and commitment to building a new community it will take some years before the majority of dwellings at Cuidedala Pachacutec are built of brick.