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Although over the last decade headlines in Lat-in America have been dominated

by heavyweights like Brazil and Mexico, dynamic Peru has quietly tripled the size of its economy to become one of the region’s fastest-growing, with an average annual GDP expan-sion of 6%. But as growth rates have slowed around the region, due in great part to falling com-modity prices hitting exporters, Peru’s rising star has been at risk of fading.

Today, under the leader-ship of newly-elected Presi-dent Pedro Pablo Kuczynski, affectionately known as PPK, Peru has put together a raft of measures to get the “Peruvian Miracle” back on track. Early indicators are positive: the 2017 GDP growth forecast of 4.5%, although lower than recent years, still places the Andean nation ahead of all other major Latin American economies.

“We’re a country that’s more or less integrated into the global economy. We’re pos-sibly among the most open economies in Latin America. We’re a country that has signed multiple free trade agreements. We’re firm believers in the idea that, through free trade, we can improve our country’s produc-tivity and efficiency,” says for-mer investment banker Alfredo Thorne, Minister of Economy and Finance.

While he can do little to in-fluence the vagaries of global economic trends that affect the prices of Peru’s exports, the president has set his mind to working on the country’s inef-ficiencies to ensure it makes the most of its opportunities. To achieve this, he has put in place bold reforms.

Ahead of his election in June last year, PPK’s stated aim was to put the economy back at 5% growth by 2018, and for Peru to join the Organization for Economic Co-operation and Development (OECD) by 2021. But this is not simply rhetoric: even prior to taking office, the former World Bank economist and Wall Street investor had already set his sights on luring foreign investors to the country,

which is rated A3 by Moody’s and BBB+ by both Standard & Poor’s and Fitch as a result of its long-standing track record of macroeconomic stability, market-friendly policies, and prudent fiscal management.

“I’d barely arrived to a lunch with financiers and investors, and I already had in my brief-case an offer for $5 billion. Peru today can raise capital at 20 years at less than 3%, and for a country that hopefully will be growing by 5 or 6 percent, it’s actually a negative rate,” the president told gathered press following a pre-election trip to

the United States in May 2016, adding that he took comfort from the knowledge that Peru could access the finance it needs for development with-out needing to deplete its fiscal reserves.

With many years’ experience as an investor, PPK understands the importance of sustainability when trying to attract newcom-ers. The issue of water access is close to his heart, having set up an NGO, Agua Limpia (Clean Water) in 2007 to help finance water development projects in rural areas. And within three months of taking office, he had established Sierra Azul, an am-bitious program managed by the agriculture ministry which will address water and sanita-tion issues for millions of the country’s poorest people while rebuilding Andean canal sys-tems and irrigation for farmers. With public-private funding of $88 million sought for the ini-tiative, Peru is poised to become a leader in green infrastructure in Latin America.

But water is not the only fo-cus for infrastructure develop-ment. In a drive to modernize the nation from the ground up, Mr. Thorne says that the

government intends to boost overall infrastructure invest-ment to 6.2% of GDP by 2021, up from 4.5% currently, in or-der to close the current $140 billion funding gap. “We’ve proposed that the center point of infrastructure investment be broken into two parts. One is the so-called ‘unleashing’. We’ve already made it known that there are around $18 billion worth of investments that have been stalled for various reasons. We’ve already unleashed a sig-nificant portion of them,” he explains. “The second part is by way of change: the reform of the public and co-financed investment system, the famous public-private partnerships.”

To smooth the path for new partnerships, the government is tackling corruption and red tape to reduce the length of proceedings, and working to change rigid labor laws which both hinder job creation and push employment into the informal sector. Formalizing a majority of Peru’s employees is a key priority for the PPK administration in order to im-prove tax revenue to finance incentives to attract foreign direct investment, with a

target of 60% of jobs on the books by 2021.

Meanwhile, ProInversión, the country’s investment agen-cy, is being decentralized to re-duce project time frames, and with the removal of bureau-cratic obstacles, investment projects in highways, airports, and gas pipelines are back on the block. “The projects are not limitless, though: the first to ar-rive will choose the best places at the table. That’s the way the game works. I would tell inves-tors not to waste time. Other-wise, they may be left without a seat,” says Bruno Giuffra, Min-ister of Production.

He explains that Peru’s new and improved business environment is already taking shape: “At our Ministry, there is a Policy and Regulation Department, whose name I would like to change to the De-regulation Department, un-derstanding the importance of lightening the regulatory burden on the country’s small businesses,” he says.

For Peru, its relationship with its second-largest trading partner the United States will be key. “I think that we should take as an important signal that President Kuczynski’s first in-ternational tour included a visit to the U.S. The president has already put down on the agenda that he’ll work with his two ma-jor trade partners, China and the U.S.,” says Mr. Thorne.

In his last international trip to Lima as U.S. president in November last year, Barack Obama hailed the country as one of the United States’ stron-gest partners in the Americas. And for U.S. companies already in the country – and they are many, with Peru receiving $6.5 billion of U.S.-originated FDI in 2014 – the future looks bright. Companies such as Newmont Mining, Freeport McMoRan and Southern Copper have all made big investments in Peru’s mining sector, and now the country will open its Treasury-bill market to foreign investors as a means to expand trading in local government debt.

“Peru is a country with great potential,” says Aldo Defilippi, Executive Director of Am-Cham Peru. “It is a market with two great advantages. The first is stability. For both the entre-preneur and the individual, predictability is fundamental. Today, Peru offers that. The second is the policy of open-ness to the world. The coun-try not only enjoys multiple trade agreements which have smoothed the way for Peruvian goods and products to interna-tional markets, but restrictions to free trade and forex have also been eliminated,” he says, add-ing that he is optimistic about the capability of the new ad-ministration.

Just over half a year into the PPK administration, there is a new energy to the country, and the president’s stated aim of great economic growth to fi-nance social investments is well underway, presenting exciting prospects to investors eyeing the economy.

PERU

The PPK cabinet has been working diligently to modernize the country and restore business confidence, while unlocking investments and infrastructure megaprojects in a bid to boost the country’s economy

This supplement to USA TODAY was produced by United World Ltd., Suite 179, 34 Buckingham Palace Road, London SW1W 0RH – Tel: +44 (0)20 7305 5678 – unitedworld@unitedworld-usa.com – www.unitedworld-usa.com

Renewed confidence in Latin America’s brightest economy

Our WorldMonday, February 6, 2017

#PeruTheWorldfolio#TheWorldfolio

“We want to be a serious country in the eyes of the world, a state with a voice which has the best business climate in the region where everyone wants to come... I want Peru to be a beacon of civilization along the Pacific and in South America that everyone will look upon with admiration”

PEDRO PABLO KUCZYNSKI, President of Peru

Photo: Presidencia Perú

A UNITED WORLD SUPPLEMENT PRODUCED BY: Pablo Dabrio, Editorial Director. Eva de la Torre, Country Director. Gemma Gutierrez, Regional Director. Jonathan Meaney, Chief Editor.

Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content

Distributed by USA TODAY2 Monday, February 6, 2017 PERU

Five thousand years of living history deserve 7 million touristsPresident Kuczynski has made development of the tourism industry a top priority for his administration, adopting a comprehensive strategy to double tourist flows to Peru, which includes a regulatory overhaul to boost private sector investment in tourism and trans-port infrastructure

Boasting one of Latin America’s most popular tourist attrac-tions, the an-

cient Incan citadel of Ma-chu Picchu, Peru has high hopes for its tourism indus-try under the new govern-ment of President Pedro Pablo Kuczynski, which came to power in July prom-ising to double the country’s exports to $70 billion and the number of tourism ar-rivals to 7 million by 2021, up from 3.5 million in 2015.

While it is an ambitious target, robust growth of the tourism industry over recent years would indi-cate that it is achievable. The number of tourists that have visited Peru has more than doubled during the last decade, up from 1.5 million in 2005, according to estimated figures by the Ministry of Foreign Trade and Tourism.

“The tourism industry in Peru has undergone sus-tainable growth in recent years. A series of strategies were followed to make this possible,” says Eduardo Fer-reyros Küppers, Minister of Foreign Trade and Tourism.

“We are pursuing an ambitious goal, and we will make every possible effort to reach 7 million visitors per year by 2021. The Pe-ruvian government has been working as a whole to achieve this target. This is a task that depends on many different sectors, and we have been giving structure to the efforts made.”

The minister adds that work has been done to im-prove the infrastructure at airports in order to increase the number of flights and visitor arrivals that they can handle. “We are also search-ing for new international airlines, promoting invest-

ments, seeking out new destinations and promoting new types of tourism (like convention tourism), along with other efforts.”

Peru’s wealth of cultural and natural attractions – including 11 UNESCO world heritage sites, na-tional parks teeming with unrivaled flora and fauna, ancient Incan and Spanish

colonial architecture, and world-renowned gastron-omy – has helped to make tourism one of the country’s most important industries. In 2014, tourism’s total con-tributio to GDP was 9.7%, and the industry directly and indirectly employed ap-proximately 1.2 million, or 7.9%, of the workforce, ac-cording to the latest country report released in April by the World Travel and Tour-ism Council.

Investment in travel and tourism stood at 7.6 billion Peruvian soles (approx. $2.3 billion) in 2014. But sig-

nificantly more investment from private investors, both foreign and domestic, will be needed if Peru is to at-tract and comfortably ca-ter for 7 million tourists by 2021. Investment in hotels, restaurants, transport and other tourist-related infra-structure will also create jobs, particularly in rural ar-eas where potential sources of income are much fewer than in urban centers like Lima.

In order to attract the investment required, the new government has made unprecedented efforts to cut unnecessary red tape and bureaucracy, which has been a major deterrent for investors, and has “par-alyzed” tourism infrastruc-ture projects over the past five years, according to Mr. Ferreyros.

The International Fi-nance Corporation and its parent organization, the World Bank, are support-ing the government in this endeavor.

Beginning in 2012, the World Bank Group, at the request of Government of Peru, developed an advi-sory project to streamline the processes that new busi-nesses in the tourism sec-tor – including hotels, tour operators, restaurants, and other enterprises – must follow to obtain a license and operate in the region of Cusco, home to Machu Picchu and the ancient UNESCO-certified city that bears its namesake.

Ultimately, these efforts eliminated 150 unneces-sary business registration processes, such as duplica-tive forms, official letters to mayors, photos of buildings in progress, and copies of worker IDs.

“Removing these super-fluous requirements shaved

three years off of the busi-ness registration process, saved private sector com-panies $760,000 in regis-tration fees after just eight months, and made it easier for a wider variety of firms – especially Small and Me-dium Enterprises – to oper-ate in the tourism industry,” says Marialisa Motta, Latin America Practice Manager in the World Bank Group’s Trade and Competitiveness Global Practice.

The elimination of bu-reaucratic bottleneck paves the way for increased pri-vate investment in hotels, restaurant, roads, electric-ity, telecommunications, water and sanitation, which will help visitors to have a fully enriching experience when visiting Cusco.

“We have been working so hard to improve tourism sites and airports, so that people leave with a better impression and tourism grows more dynamic,” adds Mr. Ferreyros.

One major investment in the Cusco region, due to begin in January, is the

SUPERFOODS

Thanks to its 84 microclimates and diverse topography, Peru cultivates an array of agricultural products whose incredible health benefits have been known to locals for centuries. But as the world’s appetite for so-called ‘superfoods’ has grown, so too has the popularity of Peru’s unique produce, as well as the number of nutritionists, chefs and health food bloggers raving about it.

Perhaps Peru’s best known superfood export is quinoa, whose popularity has skyrocketed over the past few years amongst health-conscious consumers in the U.S., Canada and Europe. Due to the growing demand around the globe, quinoa production in Peru has more than doubled in the past five years, from 41,000 tons in 2010 to 110,000 tons in 2015, making it the world’s largest producer.

Often used as a healthier substitute for rice, quinoa is gluten-free, high in protein and one of the few plant foods that contain all nine essential amino acids. It is also high in fiber, magnesium, B-vitamins, iron, potassium, calcium, phosphorus, vitamin E and various beneficial antioxidants.

Camu camu is another Peruvian superfood packed with nutrients. A tropical fruit that is one of the world’s most potent sources of vitamin C, it is now widely available in the U.S. in powder form, and is taken for its strong antioxidant properties that help regenerate the body’s tissues, prevent colds and assimilate iron found in vegetables.

Other products from Peru now commonly found in health food stores and markets across the U.S. include: yacon, a surprisingly sweet root vegetable that benefits the bacteria in the intestinal tract and colon, boosts the immune system and aids digestion; cacao beans, which have four times as many antioxidants as green tea and are delicious added to smoothies and cereals; and sachi inchi, a nut-like seed also known as sacha peanut, which contains 17 times more omega-3 oil than salmon, eight essential amino acids, and more protein than an almond.

COFFEE AND COCOA

While the International Cocoa Organization has ratified 17 countries worldwide as producers of fine and aromatic cocoa, in Peru 90% of the cocoa exported falls into this category. For Peruvian cocoa producers and exporters, this opens a competitive advantage over other cocoa producing countries.

Peruvian cocoa’s superior quality has made it the ingredient of choice for the best chocolate brands, as well as for renowned chef’s like Jordi Roca, the pastry chef at the Michelin-starred El Celler de Can Roca in Girona, Spain, which was voted ‘Best Restaurant in the World’ by Restaurant Magazine. The growing global popularity of Peruvian cocoa has led to a 250% increase in exports over the past four years, while organic cocoa shipments increased by almost 400%. Peru now ranks as the world’s second largest grower of organic cocoa. Fans of Peruvian chocolate include Like its cocoa beans, Peru’s coffee beans are renowned for their superior quality. The country has a long history of gourmet organic Arabica production, mainly in three growing regions on the eastern slopes of the Andes Mountains. Cultivation at these high altitudes creates a coffee with bright effervescent snap, gentle sweetness, and nice medium body.

With around 140,000 certified organic hectares, Peru is one of the world’s leading exporters of organic coffee (organic certification ensures growers are not using chemicals or fertilizers). Demand for this 100% natural coffee is growing steadily dur to global trends for consuming health and organic foods. It is also Fair Trade Certified, to ensure a premium paid over coffee’s price will be invested in community projects.

The U.S. and Germany arethe two biggest buyers of Peruvian coffee, representing nearly half of the export market share, but its global reputation continues to grow. In June, six types of Peruvian coffee obtained important prizes in different categories during the second edition of the International Contest of Roasted Coffee held in Paris.

UNIQUE TEXTILES

Aside from super foods like quinoa and camu camu, Peru’s rich and unique biodiversity has enabled the country to produce natural fibers of the very highest quality, such as alpaca and vicuna wool, which are, respectively, sourced from alpacas and vicunas, llama-like species that belong to the camelid family and are only found in South America.

Peru’s textile and clothing industry works with well-known international brands and has been able to access the most demanding and niche markets. Italian luxury clothing company Kiton, for example, produces extremely rare vicuna-wool suits that cost as much as $40,000, as well as coats retailing at $21,000. Exceptional growing conditions also allow Peru to grow exceptional quality cottons like pima and tanguis cotton. More affordable than vicuna, yet still highly luxurious, Peruvian pima cotton is renowned for its softness, brilliant luster and strong staple, characteristics that classify it as a luxury fiber.

Abercrombie & Fitch, Calvin Klein, Giorgio Armani, Guess, Lacoste, Polo Ralph Lauren, Reebok, Swiss Army, Tommy Hilfiger, Zara and Inditex are amongst the renowned international brands that use Peru’s cotton in their clothing.

The Peruvian textile industry has over 3,000 years of tradition and ancestral skill behind it. Together with its quality natural fibers, there is a move to create new fabrics that incorporate cutting edge technologies and solutions, turning this sector into a modern, advanced industry.

Peruvian fashion designers like Jorge Luis Salinas are also helping to put Lima and quality Peruvian textiles on the global fashion map. A graduate of Philadelphia University, Salinas broke into the U.S. market after his designs were chosen to be displayed in a retail outlet of Macy’s in the 2015 edition of ‘Peru Moda’, the international fair organized by PromPeru.

“We are also searching for new international airlines, promoting investments, seeking out new destinations and promoting new types of tourism”

EDUARDO FERREYROS KÜPPERS, Minister of Foreign Trade and Tourism

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Machu Picchu, Peru’s most popular tourist attraction

Cusco city

Quinoa Peruvian fashion Peruvian specialty coffee

Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content

Monday, February 6, 2017Distributed by USA TODAY PERU 3

new international airport in Chinchero, which will be completed in 2021. Expan-sion of Lima’s Jorge Chavez International Airport is also in the pipeline, as the coun-try bids to welcome millions of more tourists.

Cusco’s obvious appeal has naturally made it the most popular destination for tourists and a priority area for development. But the government is keen to promote tourism in other parts of the country, and has a plan to develop “18 corridors and 38 circuits for tourism”, according to the tourism minister. Reno-vation programs and infra-structure development are opening up other regions of the country to domestic and international visitors. Sev-eral regional airports will be expanded to deal with rising demand and to make getting around the country easier.

This should help encour-age visitors to go beyond the hotspots like Cusco and Lima, to less explored plac-es such as Iquitos, which is in the Amazon region.

Closely associated with eco and adventure tourism, Iquitos is slated to be one of the first destinations to benefit from the new series of investments in tourism, specifically a new highway to connect it to the rest of the country.

Another is the coastal re-gion of Piura, home to the port city of the same name, which is the oldest Spanish city in South America. The World Tourism Organiza-tion is supporting Piura in its efforts to attract invest-ment in and around 10 of the region’s beaches, many of which are popular with surfers. In the northern La Libertad region, the capital city of Trujillo is to undergo extensive renovation as it bids to join Machu Picchu, the City of Cusco, and Manu National Park on the list of Peru’s UNESCO World Heritage site – prized rec-ognition which will un-doubtedly boost tourism numbers to the area.

At the same time that it promotes and develops dif-ferent regions, Peru is also

promoting and developing different types of touristic products, from eco, sports and adventure tourism to gastronomic and MICE (meetings, incentives, con-ference and events) tour-ism, in order to cater to a diverse range of tourist tastes.

The U.S. is an obvious tar-get for PromPeru, the agen-cy charged with marketing the country abroad, as it is already the nation’s second largest source market, from which around half a million visitors travel each year. Mr. Ferreyros would like to see that figure increase dra-matically.

“The importance of American visitors to Peru is great,” he says. “The U.S. is one of the main countries from which tourists arrive. It is quite a diversified set of tourists, and we have made great strides in that sense. We will continue to develop gourmet cuisine tourism, tourism specializing in ac-tivities like birdwatching and the cultural tourism for those who come to visit our

archeological heritage, and we are going to keep pro-moting this through cam-paigns in the largest cities where we hope to attract tourists from the United States.”

“In the United States we are promoting Peru mainly focused on two segments of travelers – millennials and seniors – whom we reach through advertising cam-paigns,” adds Vice Minister of Tourism, Rogers Valencia Espinoza.

“We also work with the trade market by support-ing associations of tour operators and marketing networks that allow us to reach the best prospects of travelers.”

Indeed, as well as more U.S. tourists entering Peru, the minister would also like to encourage more U.S. in-vestment in tourism, and believes recent efforts to ease bureaucracy, as well as the sector’s robust growth makes it an attractive op-tion for American investors.

“The economic stability offered by the country is

a good sign for American investors, and the tourism industry is appealing in many different ways,” he explains.

“We are currently com-pleting the first cable car in Peru, in Kuelap, which will soon become a new focal point of tourism in the northern part of the country. Moreover, we be-lieve there is great room for regional airlines and direct investment in tour-ism in priority destinations like Lima, Tacna, Tumbes, Piura, the northeastern cor-ridor and others.”

As the numbers of tour-ists continue to climb, ho-tels will be favorable choice for U.S. investors. Hilton, for example, has seven proj-ects in the pipeline in Peru, which will add 1,000 rooms to country’s capacity.

According to a report by the World Bank, between 2015 and 2018, Peru is ex-pecting US$1.2 billion in investments in new hotels, an increase from US$550 million during the period 2010-2014.

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TASTE OF PERU

PERU OF LIVING CULTURES

Modern and cosmopolitan, Peru’s cities delight locals and tourists alike with a variety of entertainment, art, design, music, and one of the richest and most prestigious cuisines in the world. The capital city Lima is a modern and fine example of the cosmopolitan side of Peru, with its world-class gastronomy (recognized by The Economist as one of the 12 most exquisite cuisines on the planet), its vibrant nightlife and variety cultural activities and entertainment options.

From traditional clothing to popular folk art expressions, and belief systems to ways of working and even cooking, Peru is full of customs that maintain the legacy of its ancient cultures. Having inherited both native and European cultures, Peru boasts a wide variety of festivals and traditions that make up its cultural heritage. A never-ending series of festivals and events throughout the year bring bright colors and flavors to everyday life.

ANCIENT PERU

NATURAL PERU

Ancient Peru conserves the architectural and artistic vestiges of fascinating cultures. Discovering them is a breathtaking experience, from Machu Picchu, the Inca citadel nestled into the top of the Inca hill considered to be one of the seven New Wonders of the World, to Caral, the oldest sacred city in America and, at over 5000 years old, the cradle of one of the world’s first civilizations.

Peru is one of 10 mega-diverse countries of the world, with hundreds of endemic species of flora and fauna; a paradise for bird watching and orchid spotting, or the exploration of remote and mythical natural landscapes, some still pristine virgin lands teeming with life. Manu National Park hosts one of the greatest concentrations of life on the planet, with record numbers of birds (over 800 species), mammals (200 species) and plants, including orchids and giant trees.

WONDROUS PERU

ADVENTURE IN PERU

There is a Peru for those looking to indulge every sense; a Peru of sophisticated escapes and attractions, like seaside spas, luxury tours through the jungle and mountains, or sumptuous retreats at boutique hotels in some of the most impressive and luxurious destinations in the world. Peru enjoys wide open spaces perfect for a trip full of intense experiences, for a comforting rest and to also sit back in harmony with nature, achieving absolute equilibrium between body and mind.

Peru is versatile and its geography proves it to be the perfect place for adventure. A warm desert coast, an imposing mountain range and a lush jungle invite you to enjoy all kinds of extreme experiences and adventures including hiking in the mountains, sandboarding on coastal dunes and canoeing in rivers or trekking the Inca Trail. Peru’s beaches are considered by surfing experts to be among the best in the world, with small, big, long, tubular, high peak and bell waves all year round.

Community of Llachon, Puno

A world-leading culinary destination

Tubular car in the desert of Ica

Hospitality tent in the Paracas desert

Peruvian Amazon, Loreto

Caral

Cabo Blanco Beach, Piura

The Na sca lines

“In the United States we are promoting Peru mainly focused on two segments of travelers – millennials and seniors– whom we reach through advertising campaigns. We also work with the trade market by supporting associations of tour operators and marketing networks that allow us to reach the best prospects of travelers”

ROGERS VALENCIA ESPINOZA, Vice Minister of Tourism

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Our World Insert is produced by United World. USA Today did not participate in its preparation and is not responsible for its content

Distributed by USA TODAY4 Monday, February 6, 2017 PERU

The mining industry is Peru’s principal source of foreign exchange, repre-senting 50% of to-

tal currency reserves in any given year. Directly or indirectly, the sector provides jobs to 820,000 citizens, and contributes 12% to GDP. In 2015, mining attracted $7.5 billion in domestically or externally sourced investment flows.

Successive governments, however, have had to deal with the damage mining causes to the environment, especially to es-sential water resources and soil on grazing land contaminated by toxic runoff.

“We recycle the water now,” says Carlos Galvez, President of the National Society for Mining, Petroleum and Energy (SNMPE) “and make every effort to ensure that our exploration and survey work is non-invasive.”

Since the government of President Pedro Pablo Kuczyn-ski took office in July, Mr. Galvez is hopeful Peruvians will be able to benefit from projects that have been languishing “on hold” for years, such as the Tia Ma-ria complex in the south of the country, where two trenches will be developed at a projected cost of $1.4 billion on forecasts of re-covering 120,000 tons of copper.

On a visit to Andean city of Tacna a month after taking of-fice, President Kuczynski re-minded supporters that “we are sitting on a mountain range that contains the world’s greatest natural resources.” But can they be exploited without causing ex-tensive environmental damage?

The way to ensure positive outcome is spelled out by Mr. Galvez: “We have to work with high-quality investors, respect-ing the environment and tread-ing carefully with regard to pos-sible social disruptions. I think Peru can look to a shining future if it makes proper use of its re-sources and takes advantage of the value they create to educate and generate knowledge, so we can be prepared to take part in the era of knowledge that is the 21st century.”

Oil and gasPetroleum output is down to less than half of what it was 30 years ago. There’s not nearly enough to meet domestic demand so pur-chases from Ecuador and Africa make up the 80,000-barrel annu-al shortfall. Experts say it doesn’t have to be that way. The oil is out there, no question about it, but so far, no entity, private or public, has been willing to shoulder the risk and expense of determining where exactly “there” is.

What they do agree on is that 18 potentially viable oil fields have been identified in Peru-vian territory, eight of them under its territorial waters, and possibly many more. A grand total of six out of the 18 can be said to have received a more than a cursory survey but in-dicators of sustainability were mostly positive. Further action,

however, may have to wait for world oil prices to make their long-overdue recovery.

In that connection, the lum-bering bureaucracy that afflicts the mining sector has likewise been blamed for discouraging sustained exploration with end-less requirements for redun-dant paperwork and govern-ment clearances needed every step along the way, especially those impacting on the environ-ment. The SNMPE has offered to work with the new govern-ment in drafting a package of reforms that would streamline a process that could last over two decades.

LNGBut what Peru currently lacks in oil, it’s trying to make up for in gas. It has not been all that long since South America’s first liq-uefied natural gas (LNG) plant was inaugurated in 2010 near the Peruvian coastal town of San Vicente del Cañete, where a

pipeline from the Camisea field in Cusco province, 250 miles dis-tant, splices into the Pan Ameri-can highway and port facilities are within convenient reach.

Operated by Peru LNG S.R.L., the plant has a capacity of 4.4 million tons, and the pipe-line that feeds it ratcheted up the total price tag of the project to $3.8 billion, the largest invest-ment in any project ever under-taken in the Andean country. In December, the maritime LNG terminal was recognized with the OAS Maritime Award of the Americas in the category of Environmental Waste Manage-ment in Ports.

“Peru LNG has been a clear example of how large-scale in-vestments can be carried out in the country,” former general manager, Igor Salazar, said in an interview with United World before his departure from the company at the end of last year.

While the company has been experiencing tougher

times of late, Mr. Salazar said he remained optimistic that the Kuczynski administration will continue to support natu-ral gas as a key resource for Peru’s future development, and Peru LNG will continue to play a key role.

“It is highly positive. An ex-ample of this is the restart of the Southern Gas Pipeline (SGP) in Peru, one of the mega-projects emblematic of those being talked about so much, which will contribute enormously to the massive arrival of gas in the southern region of the country.”

Construction giant Ode-brecht recently withdrew from the SGP following allegations of corruption surrounding the project and previous Peruvian government officials. Put Presi-dent Kuczynski has stated that he is confident that the project will still go ahead. When op-erational, the pipeline will trans-port 2000 million cubic feet of gas per day from the Anta prov-

ince in Cusco to the south coast, which will help Peru to meet its growing energy needs in the South and strengthen its posi-tion as an LNG exporter.

“For our part, in terms of Peru LNG, we are continuing to support this national plan, and we are planning accordingly to start operating our LNG truck loading facility in March 2017 to contribute with widespread growth,” said Mr. Salazar, who was replaced by María Julia Ay-bar Solís in late December.

“The idea is that major invest-ments similar to that of Peru LNG exist in the country and what we are returning to, par-ticularly with the new govern-ment, is that the Peruvian state works hand in hand with these kinds of investments – encour-ages them and protects them. The role of the state as facilita-tor, both for the investor and for the community, is essential if it wants to make projections for sustainable growth.”

Photo: Unido, Sebastian Castañeda, El Comercio

Agriculture and hospitality sectors amongst most attractive for FDI

More than just monuments and scenery are needed if you are bet-

ting seriously on tourism to be-come a pillar of your country’s economy. The upscale end of the hospitality business requires a level of professionalism not eas-ily acquired, along with an offer-ing diversified enough to attract a steady and satisfied customer base. But there’s no getting round the fact that the bottom line is in-frastructure, and that infrastruc-ture requires major investment. Peruvian authorities would like to see more modern accom-modations, sport and leisure fa-

cilities, and upscale restaurants where Peru’s world-renowned cuisine can be enjoyed. It is hoped that many can be funded by private capital flows gener-ated locally and abroad.

By the same token, Peru’s ag-ricultural sector would welcome more private sector participa-tion as it seeks to double agri-culture exports to $10 billion by 2021. Lima would also like to see targeted investment financ-ing logistical infrastructure such as reliable roads, dams and the airfreight facilities needed to ship Peruvian produce to distant markets, Asia included, as well as dams allowing for recovery of the country’s vast reserves of potentially high-yield farmland.

Hotel investments “What’s the use of having a good product if you don’t know how to sell it?” Mario Mustafá had that maxim in mind when he started out some years back managing a shop that rented out Betamax video cassettes. But his cautiously commonsensical attitude came with a dream at-

tached to it for owning and oper-ating full service leisure hotels at tourist destinations throughout the north of Peru.

In 1995, the first establish-ment displaying the “Costa del Sol” logo was opened in the beachside resort of Tumbes, which last year underwent a massive expansion to cater to in-creasing demand. More invest-ments were to follow: in Piura, Chiclayo, Trujillo, Cajamarca, and Cusco. The year 2007 saw Mr. Mustafá inaugurate hotel number seven at Lima’s Interna-tional Airport.

When the group’s most recent 144-room venture was unveiled in the capital in 2015, it was christened the Wyndham Ho-tel Lima after Mr. Mustafá and his associates decided to part-ner with the giant U.S.-based hospitality chain of that name. The other properties were later incorporated under the joint Costa del Sol Wyndham brand. Mr. Mustafá is confident that having the Wyndham name be-hind him should help to pull in treasured U.S. visitors.

“The American market is and will continue to be important to us. So now, with Wyndham, American tourists are sure to find great accommodation; the brand confers trust. Likewise, the Wyndham brand helps us a lot in marketing, not just in the United States, but also all over the world in their 8,000 hotels,” he says.

“Right now, we have 850 rooms nationally, eight four-star hotels, two three-star hotels; and among the eight hotels there’s a five-star hotel as well. This year’s investment will be [a four-star hotel] in Arequipa.”

The hotel boss adds that Peru has “solid and ever-growing ho-tel infrastructure”, thanks to rap-idly expanding visitor numbers, which the government wants to see reach 7 million by 2021, double the current number. “In the hotel industry, we’ll be grow-ing by almost 50% in the next two years,” he says. “In 2015 our company had a growth rate of 25%; last year it was around 24%, which includes expansions and renovations. So, we can say we’re growing at the rate the industry wants to grow.”

Mr. Mustafá admits that the growth of the industry will large-ly depend on the efforts of the public sector to facilitate private investment in hotel develop-ment, and he is confident that the business-friendly adminis-tration of President Pedro Pablo Kuczynski (himself an investor by trade) will do just that.

Growing the economy from the ground upAgriculture has come from be-hind to occupy second place be-hind the long-established min-ing sector as an export-earner for Peru. Consider the num-bers in play: each year, it ships $4.7 billion worth of fresh and processed agri-goods to some

150 countries worldwide, and in many of them is the leading purveyor of coffee, cacao and as-paragus. Fresh produce includes many non-traditional fruits and vegetables destined for the northern hemisphere. Demand for organic products is also in-creasing, which has helped the country become the world’s number-one shipper of organic bananas, to cite one example.

Ranging from the peaks of the high Andes to a 1,500-mile-long coastline edging the Pacific, Pe-ru’s geographical diversity allows different food crops to be culti-vated in 11 distinct eco-zones, from the desert-like coastal plain to the rugged Andean highlands. Yet of the country’s 7.6 billion hectares of agricultural-quality soil, only half is currently being tilled. The government now in office is taking a hands-on ap-proach to the problem by priori-tizing projects such as the dam at Palo Redondo, in the north of the country, intended to cre-ate a reserve of fertile farmland earmarked for the cultivation of exportable fruits and vegetables with a high added-value com-ponent.

Value from biodiversity “What we want now is to give agriculture greater momentum,” says José Manuel Hernández, Peru’s Minister of Agriculture and Irrigation. “We want to have no less than 4% growth per year, so that we can predict an annual growth rate of 5% by 2021. With that, we’ll contribute more to the growth of the economy in gen-eral.”

He admits that an increase on that order of steepness will require major outlays in logisti-cal infrastructure such as roads, ports and distribution centers, but insists that it represents an opportunity. American inves-tors, he says, would be well ad-

vised to take a look at prospects in “agro-industrial and forestry projects, or in the exploitation of different plants that we have, such as exotic and medicinal plants in the rainforest areas.”

Ranked by value as opposed to quantity, a little over a third of Peru’s agricultural exports end up in the United States, but Mr. Hernández sees its market concentration as being all to the good. “Consumers there have great purchasing power. And we can position there our fruits and vegetables, but also our exotic and native products, which are organic, high-quality and benefi-cial to health.”

As the sector powers up to pursue the minister’s goals of making Peru’s agriculture more thriving, competitive and sus-tainable, considerable pains are being taken to ensure that smallhold and family farmers will receive training, assistance and financing so as not to be ploughed under by ‘big-time’, technologically sophisticated agro operators.

“We will support small-scale farmers with technical assis-tance and training to close the big technological gap that they have in relation to large-scale farmers. Once they have high-quality seeds and technical assistance, we’ll focus on re-sources,” he says, mentioning a forthcoming injection of capital to Agrobanco, the government-supported entity that provides credit and banking services to rural Peruvians.

“It’s my duty to help small farmers so they have higher performance and constant sup-port throughout the produc-tion chain, in order to translate that into a higher income for their homes. Impacting the ru-ral economy in a positive way, that’s what it’s all about,” for Mr. Hernández.

Hotel development is set to grow at a rapid rate, buoyed by ever-increasing visitor numbers and the efforts of the business-friendly govern-ment to facilitate private investment; while the Ministry of Agriculture’s plan to double agri-exports to $10 billion by 2021 also presents opportunities to investors

“We have to work with high-quality investors, respecting the environment and treading carefully with regard to possible social disruptions. I think Peru can look to a shining future if it makes proper use of its resources and takes advantage of the value they create to educate and generate knowledge, so we can be prepared to take part in the era of knowledge that is the 21st century” CARLOS GALVEZ, President of the National Society for Mining, Petroleum and Energy

‘High-quality’ investors sought in minerals and hydrocarbons With huge potential resources offshore and in the Andean mountains, where which Presi-dent Kuczynski says lie ‘the world’s greatest resources’, Peru is looking for investment in its mining and hydrocar-bon industries to energize its shift to a knowledge-based economy