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Business Profile
Economy: The Peruvian economy is divided into two distinct parts: a relatively modern industrial and service economy concentrated on the coastal plain, and a subsistence agricultural economy in the interior. Inevitably, one consequence has been huge migration from the interior to the coastal cities. About one-third of the workforce is engaged in agriculture, producing rice, maize and potatoes for domestic consumption and coffee as the principal cash crop. There is also a substantial illicit economy based on the production of coca (which has grown recently due to the collapse of world coffee prices). Fisheries are also important, and provide substantial export income. Much of the foreign investment of the early 1990s was directed towards Peru’s major industry, mining, which accounts for about half of export earnings. Peru is a major producer of copper; in addition, there are sizeable deposits of lead, zinc, silver and gold, and some oil reserves. Manufacturing is concentrated in processed foods, chemicals, metal products, machinery and textiles. In the service sector, tourism has grown considerably during the last two decades, and now brings in almost US$1 billion annually.
During the early- and mid-1990s, Peru implemented important market-oriented reforms, including a drastic overhaul of the fiscal and monetary systems, privatisation of key industries (mining, telecommunications and energy), trade deregulation and measures to attract investment from abroad. In Peru’s case the strategy was reasonably successful, boosting exports and attracting foreign capital. The defeat of the Sendero Luminoso insurgency also served to boost investor confidence. Throughout most of the decade, Peru was among the most dynamic economies in Latin America with an average annual GDP growth of around five per cent. However, events since 1997 – the Asian and Brazilian financial crises, the effects of El Niño (especially upon agriculture) and latterly, political instability caused by the demise of the Fujimori regime – combined to stall Peru’s economic progress. The official unemployment rate is eight per cent, but it is estimated that up to 40 per cent of the workforce are underemployed. During 2002, current annual growth was just under three per cent.
Peru is a member of the Andean Treaty and the Latin American Integration Association, ALADI, which promotes trade and economic development in Latin America. Peru’s major trading partners are the USA, Japan, Brazil and Germany.
Business: Although the majority speak Spanish, many businesspeople speak some English. Office hours: Mon-Fri 0900-1700.
Commercial Information: The following organisation can offer advice: Cámara de Comercio de Lima, Avenida Gregorio Escobedo 398, Jesus Maria, Lima 11 (tel: (1) 463 3434 or 463 8080; fax: (1) 463 2837; e-mail: perured@camaralima.org.pe; website: www.camaralima.org.pe).
Conferences/Conventions: For further information contact PromPeru (see Contact Addresses section for details).
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