One of a kind: History, culture and natural resources offer valuable long-term assets

Over the past decade Peru has seen a period of transformative growth, which has effectively positioned it as one of the leading economic performers in Latin America and the world. This period of exponential growth has for the most part spread throughout the country, leading to unprecedented development in urban centres, while at the same time drastically reducing rates of poverty in rural areas.

Although the 1980s and 1990s were marred by political and social volatility, economic and political reforms implemented in the 1990s and subsequently reinforced in the 2000s have resulted in political stability and a generally liberalised economy. The country has quickly become a prime destination in Latin America for foreign investors.

A major metals and minerals exporter with an expanding agricultural sector, Peru’s rapid economic growth has been the result of elevated global demand for commodities and key exports, including gold, copper and silver. After avoiding economic contraction during the depths of the global crisis, the economy quickly recovered to post growth rates in excess of 6% every year since 2010.

The country has a rich heritage, one shaped by both Amerindian and Hispanic cultures. The Incan culture is known around the world as one of the great ancient civilisations, while numerous other pre-Inca civilisations continue to be studied and their ancient archaeological sites discovered across the country.

Geography

With a surface area of 1.29m sq km and 2414 km of coastline, Peru is the third-largest country in South America and the 20th largest in the world. The country is divisible into three distinct geographic regions: the narrow coastal strip of arid plains and deserts in the west (including the capital, Lima), known as costa; the mountainous highlands in the centre, called sierra; and the tropical rainforest and humid jungles of the east, known as selva.

Climate

The diverse and dramatic landscape gives rise to a varied and mixed climate across the entire country, with 28 of the 32 world climates represented. The coastal plains and deserts in the western part of the country are warm and arid, while the central mountainous highlands are much colder, and the east, for the most part covered in dense rainforest, is considerably hotter, humid and subject to heavy rainfall throughout the year.

The climate in Lima is generally pleasantly mild, with temperatures very rarely falling below 12°C or rising above 29°C throughout the year. The city experiences two distinct seasons: winter, from June to October, and summer, from December to April, with May and November as transition months. Owing to the city’s coastal location, relative humidity is always very high.

The winter months of July to September see the most rainfall in Lima, an average of 8 mm per day, while precipitation levels drop to close to zero between December and April. Between April and November, the city is often enveloped by mist that comes from the sea.

Population

The country’s population stood at 30.48m in June 2013, according to estimates by the National Statistical Institute (Instituto Nacional de Estadística e Informática, INEI), making the country the fourth most populous in South America behind Brazil, Colombia and Argentina, respectively.

As the country’s most populated province, Lima claims the lion’s share of inhabitants with about 8.48m people, or roughly 28% of the nation’s total. This total includes nearby Callao, technically a separate province but generally accepted as part of Lima, which has nearly 1m inhabitants, giving the Lima metropolitan region almost one-third of the country’s population. Arequipa, which is country’s second-largest city and located in the far south, contains just 936,464 inhabitants, or about 3.1% of Peru’s total.

The population of the country is highly concentrated along the coastal region, with density decreasing gradually as you move east through the Andes and into the jungle regions. Six of the country’s 195 provinces are home to some 57.1% of the population.

Religion

The Peruvian government does not endorse an official religion, although the constitution states it “recognises the Catholic Church as an important element of the historical, cultural and moral formation of Peru.” According to the 2007 census, the great majority of Peruvians – around 81% – are Catholic, while 12.5% are evangelical Protestants.

There are small communities belonging to other faiths, which include other Protestant denominations, Judaism, Islam, and syncretic and Amerindian religions, among others. The constitution guarantees freedom of religious opinion and practice, which the government reinforces at various levels.

The country has several important religious events, such as the festival of Corpus Christi, which is celebrated 60 days after Easter Sunday, and the Lord of the Miracles month in October, both involving statues-bearing processions. The former is particularly popular in the south-eastern city of Cusco, while the latter is an important celebration in Lima. Major cities like Lima and Arequipa contain well-maintained colonial-era Spanish churches.

Language

The official language of the country is Spanish, spoken by around 84% of the population, though other indigenous languages, such as Quechua and Aymara, are co-official in the areas in which they predominate. The country’s rich and diverse cultures are thought to have spoken at least 300 languages at one time, though the number of languages that are actively spoken in the country today has dwindled to around 100. These native languages are spoken mostly in the country’s Andean and jungle provinces. English is widely used among the business community.

Culture & Heritage

Peruvian culture is mainly rooted in Native American – specifically Incan – origins combined with Spanish influences, though a number of African, Asian and other European cultures have left their mark as well. In a 2006 survey by the INEI, Peruvians self-identified as 59.5% mestizo (of mixed Amerindian and European ancestry), 22.7% Quechua, 2.7% Aymara, 1.8% Amazonian, 1.6% black, 4.9% white and 6.7% “other”.

The country boasts a wide range of arts and crafts, and a thriving handicraft and textile export industry. Traditional products include wooden carvings, pottery, sculpture and jewellery, much of which is influenced by the country’s Incan heritage, featuring complex Amerindian geometric designs and patterns.

Among most Peruvians, especially younger people, Western-style clothing is popular and business people are expected to wear business suits. However, in rural areas many indigenous people such as Quechua Peruvians wear traditional outfits or a mixture of indigenous and Western clothing. Traditional items include the hand-woven poncho worn by men; knitted caps with earflaps, known as chullo; and pollera, multi-layered woollen skirts or petticoats.

There are numerous traditional Peruvian dances. The best known is the courtship dance, the marinera, which is predominantly performed on the coast and has numerous variations. Other notable dances include alcatraz and the festejo, which originated in African slave communities and can take the form of competitions, and the huayno of the Andean highlands, which originates from the Inca civilisation. Dancing is often accompanied by traditional Peruvian music. This includes both Andean music played on a variety of local instruments – such as panpipes and the charango, which is similar to a small guitar – and Afro-Peruvian music, which has its roots in African slave communities that came into the area in the colonial era.

Football is very popular in Peru, as is bullfighting, with fights predominantly taking place on Sundays and public holidays. The most famous bullring is the 14, 000-capacity Plaza de Acho in the Rímac district of Lima – the third oldest in the world, dating back to 1766.

Natural Resources

Peru remains a major global minerals and metal producer. In 2012, mining and minerals accounted for around 6.3% of the country’s GDP and nearly 57% of its exports, with total mineral exports of about $25.9bn. More than $50bn worth of investment in the sector is currently at some stage of planning. Peru continues to be a significant producer of a multitude of minerals and metals, including silver, copper, bismuth, tin, zinc, lead, molybdenum and gold. By value, its largest mineral export in 2012 was copper, with exports at $10.4bn, followed by gold with exports of $9.6bn and lead at $2.5bn. Peru is a net oil importer with proven reserves of around 633m barrels, according to the Ministry of Energy and Mining (Ministerio de Energía y Minas, MEM). Daily production climbed to 200,000 barrels per day (bpd) in the 1980s, but it has since declined to around 63,000 bpd over the past few years, meaning the country now has to rely on oil imports to meet its needs. According to the MEM, the country had proven natural gas reserves of 15.4trn cu feet at year-end 2012. However, with many regions of the country only semi-explored at best, many are bullish on the potential for additional discoveries in the years to come, especially as new lots are auctioned in greenfield areas.