Peru, the Pacific Tiger

Ten Peruvian Marketyears ago, foreign investors flocked to Chile. Today, the Chilean market is saturated, and the investors are looking for the next big opportunity in Latin America.

Look no further than Peru.

Peru has emerged as one of the strongest economies in the region. The country is growing rapidly, and offers one of the most attractive prospects for doing business and investing in over the next ten years.

Decades of troubles have left scars, however. To do business successfully in Peru, you need to be aware of the country’s past. During the 70s and 80s, like many countries in the region, Peru suffered a brutal military dictatorship. Later, under democratically-elected President Alan Garcia, the country experienced hyperinflation — sometimes as much as 50% inflation from one day to the next. The Sendero Luminoso (Shining Path) guerrilla plagued the country in the 90s. Today Peru remains a divided society. Wealth is concentrated in the hands of a few, and the poor struggle to get ahead.

As a result, Peruvians, especially in Lima, are cynical. (Think of New Yorkers and you get the idea.) Peruvians are strong. They are tough negotiators. Why shouldn’t they be? They’ve seen it all. Nothing surprises them anymore. Lima, in particular, has big-city attitude. The traffic is terrible, the customer service verges on outright rudeness, and the pollution can be choking at times. What’s it to you, huh? Fuggedaboudit.

Here’s something to ponder: Metropolitan Lima has a population of around ten million people, and there is no public transportation. No train. No monorail. No light rail. Just thirty-year-old privately-owned buses spewing diesel fumes into the air. Traffic is so bad that local government statistics suggest it’s faster to walk to the port of Callao than to drive.

Thankfully, plans for a city-wide subway are in the works, and Phase 2 and Phase 3 of construction are coming soon. Phase 1 has already been built – 7.7km of metro connecting the eastern Ate district with the port of Callao.

This is just the tip of the iceberg. Massive infrastructure improvements are coming online over the next ten years. The port authority is planning a big upgrade at Callao. Improved highways are needed all over the country, including highways into the mountains to serve the mining companies. Electrical transmission lines are to be built all across the country. Renewable energy is also a hot topic in Peru, and the country looks set to make major investments in this space.

Some numbers: The government of Peru is expecting to invest US $11.6 billion dollars over the next two years in infrastructure projects alone. (Our opinion is that may not be realistic; expect that money to spend over a five-year period, not two.)

Improved infrastructure will benefit the Peruvian people. If you work in the infrastructure field, it’s also an opportunity to get in on the ground floor and make a lot of money.

For more detailed information, be sure to download our free Peru Infrastructure Case Study, available here (link).

One thought on “Peru, the Pacific Tiger

  1. Pingback: 8 Things to Know About Doing Business in Peru |

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