For more than a decade now, Peru has been one of the fastest-growing economies in Latin America. From 2000 to 2014, the country achieved a staggering cumulative growth of 116 percent of its gross domestic product and, in the same amount of time, slashed poverty by half, according to a report by EY Peru.
“Peru in South America is strategically important. Its harbor and its airport has tremendous connectivity to the rest of South America,” Lima Chamber of Commerce President Jorge von Wedemeyer pointed out.
Not resting on its geographical advantage, Peru pulled off this feat by fully engaging in the global economy through free trade agreements with its partners in America and across the Pacific.
“Peru in South America is strategically important. Its harbor and its airport has tremendous connectivity to the rest of South America,”
- Lima Chamber of Commerce President Jorge von Wedemeyer
Peru and Asia have a very long history. China’s presence in Peru goes back to the mid-1800s. Today, the world’s second-largest economy is Peru’s biggest trading partner.
Japan’s history with Peru is just as rich. Ever since the first Japanese immigrants arrived at the turn of the 20th century, Peru boasts one of South America’s most dynamic ethnic Japanese communities.
With many opportunities available to Asian investors, Peru has seen positive interest across a multitude of sectors, particularly in the mining sector, despite a recent global slump in commodities prices market.
“I see a few things but one indicator is always exploration. That’s just the tip of the spear. We have had more activity in May and June than in the last two years,” said Atlas Copco Peruana’s General Manager Brian Doffing.
The real extent of Peru’s wealth in natural resources is still to be discovered as only a small percentage of the country’s mining land has been explored. So, many companies are holding out, optimistic that the sector will recover in the middle term.
While the mining sector is experiencing a downswing, Volcan Compañia Minera is anticipating a recovery soon and is gearing up for big plans, particularly listing on the London Stock exchange next year.
With growing interest in copper mining projects, the stage is set for Peru’s mining sector to start climbing again. Armed with strong market knowledge and a well-diversified portfolio, Volcan is ready to dominate the industry, this time on a global scale.
“You have to be here. You have to acquire the right projects, and you need to have the right partners,” Volcan CEO Ignacio Rosado said.
Having signed free trade agreements (FTAs) with China, Japan, South Korea, Singapore and Thailand, Peru’s business with its Asian partners now account for 95 percent of exports. These FTAs have allowed Peru to diversify its non-traditional export goods.
“I think that there is a lot more [for China] than just selling our minerals. There are some products [here in Peru] that China doesn’t know about and that they need to know,” said Peru-China Chamber of Commerce President Jose Tam.
Interest has been shown on both sides as more Asian companies come to Peru and delegations have been sent across Asia to work toward making the existing partnerships more fruitful.
With the robust economic growth, Peru has a large infrastructure gap to fill and unveiled a portfolio of public-private partnerships valued at around US$4 billion.
“Peru is one of the most important countries for Japan. There are many projects done by the Peruvian government, such as construction of roads and harbors, bridges, and electricity projects. I think many Japanese companies have much interest in this area,” said Yoshinari Kawabata, President of the Peruvian-Japanese Chamber of Commerce and Industry.
“We have an open invitation to Asian investors to explore investment opportunities in Peru. Peru is much more than mining and Machu Picchu. Peru is a world to discover,” said Carlos Herrera, the executive director of state-run investment promotion agency ProInversion.
Investment opportunities in the country have also become more diversified, specifically in tourism, energy (renewable and natural gas), infrastructure, oil & gas, property development, and retail (a sign of a growing middle class).
“We have an open invitation to Asian investors to explore investment opportunities in Peru. Peru is much more than mining and Machu Picchu. Peru is a world to discover.” - Carlos Herrera, Executive Director, ProInversion
“There is a growing interest and there is a realization about that across senior levels of business and government in Australia. Peru has been a shining star in the last five to ten years. The narrative about Peru has changed dramatically over that period. Now, when Peru is featured in Australia, it is mostly about its stellar economic growth until around last year,” Australian Ambassador to Peru Nicholas McCaffrey said.
Meanwhile, Peru is negotiating to join the Trans Pacific Partnership and is involved in the expansion of the Pacific Alliance, the four-member trade bloc that includes Chile, Colombia and Mexico.