Natural assets: Page 25

Peru’s economy is the seventh-largest in the Latin America and Caribbean region, and has been growing much more rapidly than the region’s two largest economies, Brazil and Mexico. Services represent more than half of total GDP, with manufacturing, mining and hydrocarbons, construction, and agriculture and livestock also key sectors. The year 2016 may be one of general economic uncertainty.

6 11 16 18 19 21 25 33 35 36 37 39 40 Peru in figures A balancing act: Ensuring inclusive growth amid falling demand for commodities is Peru’s main challenge Viewpoint: President Ollanta Moisés Humala Tasso Interview: Ana Maria Sanchez Vargas, Minister of Foreign Affairs Taking the stage: An expanding minerals industry and ongoing economic diversification is spurring growth in Peru Interview: Jorge Familiar, Vice-President for Latin America and the Caribbean, World Bank Natural assets: A resource-rich landscape provides a firm foundation for recovery Responsible spending: Fiscal policy takes time to stimulate the economy Interview: Alonso Segura, Minister of Economy and Finance Interview: Ana Maria Carrasquilla Barrera, Chairman of the Board and Executive President, Latin American Reserves Fund Strength through diversity: Repositioning special economic zones for growth Interview: Carlos Herrera, Executive Director, ProInversión Interview: Dionisio Romero, President, Grupo Romero The Peruvian banking system continued to grow throughout 2015, with total bank credits rising by 15.26% year-on-year, to $80bn, in September; banking is the single most important component of the wider financial, insurance and pensions sector, which accounts for nearly 3.8% of Peru’s GDP. The financial sector as a whole accounts for more than 85% of that figure alone, at around 3.2% of GDP.

41 44 50 51 53 57 61 62 64 69 70 73 78 79 82 87 Specifics in the Pacific: New regional agreement spearheads Peru’s trade strategy Branching out: A wide range of services make the sector a regional leader Interview: Julio Velarde, President, Central Reserve Bank of Peru Local assets: New policies seek to reduce dollar-denominated debt Into the fold: Government initiatives aim to increase financial inclusion Tough times: Reforms under consideration are likely to increase liquidity and trade volumes Interview: Christian Laub, President, Lima Stock Exchange Tax relief: Certain transactions are now exempt from capital gains tax Underwriting expansion: Premium growth holds up well as middle class grows Living it up: Industry players are innovating in the life line Interview: Daniel Schydlowsky, Former Superintendent, Superintendence of Banks, Insurance and AFPs Digging deep: The nation’s mines remain flexible while prices are volatile Interview: Rosa Maria Ortiz, Minister of Energy and Mines Raising junior: The smallest mining firms are targets of opportunity Spark plug: New projects and policy reforms are set to transform the sector Interview: Luis Ortigas, Former President, Perupetro Mining has been a key driver of the Peruvian economy for 10 years, and today accounts for 14% of GDP and half of all exports. In 2014 the sector employed only around 195,000 people directly, but comprised more than 1.7m jobs indirectly. Of the $34.4bn invested in Peruvian mining projects since 1996, nearly 60% was deployed between 2011 and 2015.

88 90 93 100 101 103 Breaking new ground: The industry is looking to explore a range of alternatives To bid or not to bid: A new production contract at Peru’s most prolific oil block is up for grabs Built to last: Despite the slowdown, the sector has a substantial number of large-scale projects to manage By design: A new city is set to redefine urban planning and support agricultural growth Interview: Fernando Castillo, President, ICCGSA Building demand: Housing demand sustains long-term development of residential real estate, while other segments show progress By harnessing its hydro and gas resources, Peru has developed a robust and diversified energy mix. Cheap and plentiful power is one of the key comparative advantages for the country’s mining, infrastructure and industrial sectors, among others. Investment is flowing into several major generation projects that will come online in 2016 and 2017, and Peru is facing an expected period of oversupply until at least 2021. Meanwhile, with prices expected to remain under $60 a barrel, the appetite for further oil exploration in the country’s remote regions has dwindled. The main challenge that is currently facing the Ministry of Energy and Mines is how to optimally leverage the country’s abundant energy resources.

108 111 117 118 120 126 128 130 136 137 139 142 147 148 150 Rent now, own later: A new leasing law should raise the number of homeowners Variety show: Government initiatives seek to diversify the local economy Protective measures: Steel firms look for ways to profit amidst heightened competition Dressed for success: Fast fashion retailers are gaining popularity among consumers Moving along: A raft of tenders for new projects and upgrades expands capacity across the sector Flight facilities: Rising passenger numbers prompts expansion at Peru’s airports Linking the hinterland: Major road developments are ongoing to better facilitate economic growth Fresh horizons: Agricultural exports are taking the place of traditional foreign currency earners Interview: Mario Mustafá, President, Ecosac Focus on the forest: A new strategy should help a key segment meet its potential Captive audience: The aquaculture industry is set for continued growth New routes: Leveraging the country’s variety is leading to new tourism products Interview: Magali Silva Velarde-Álvarez, Minister of Foreign Trade and Tourism Sorting out the citadel: Peru’s most important tourism destination gets a revamp Tight rivalry: An increasing number of operators is leading to higher competition in the sector 154 155 157 163 169 170 171 177 182 185 190 192 193 198 200 A new line of contenders: Mobile virtual network operators set to increase competition in the sector Interview: Gonzalo Ruiz, President, OSIPTEL Reaching out: New infrastructure and consumer demand for connectivity sustain the sector On track: Major reforms and investments will help to overhaul the system Interview: Jaime Saavedra, Minister of Education Interview: Raúl Diez Canseco, Founder, Universidad San Ignacio de Loyola Clean bill of health: With coverage rates rising, the outlook for the sector is improving Paid in full: The ins and outs of tax and Customs regulations Interview: Orlando Marchesi, Lead Partner, Tax and Legal, PwC Peru New partnerships: Bold programmes are helping to close the infrastructure gap Interview: Pablo Berckholtz, Managing Partner, Estudio Echecopar Hidden treasures: Rich ecological and archaeological assets open doors to niche markets in the tourism industry Rest easy: A rundown of some of the country’s leading business and leisure hotels Listings: Key telephone numbers for car hire, government ministries and agencies, foreign missions, legal services, consultancy, accountancy and tax services Facts for visitors: Essential tips for travellers to the country The government is seeking to diversify the economy and build partnerships between private and public sector players. The global economic downturn hit non-primary manufacturing, which decreased by 4.2% in the first five months of 2015. Traditional exports such as food and textiles could help see the country return to growth rates of 3-4% in 2016.

Peru’s agriculture and fisheries sector continues to play an important economic role in the country, contributing approximately 6% of overall GDP. Despite a fall in revenues from traditional exports, agricultural and fish exports rose in 2015, with a 19% increase on the previous year, due to diversification and the introduction of new products. Increased promotional efforts and the development of tourism products are geared towards expanding the sector. With the government expecting to attract 5.1m visitors annually and generate income close to $7bn by 2021, renovation programmes, transport connectivity plans and infrastructure development projects are under way across the nation.

Large-scale reforms aimed at combatting decades of underinvestment in education have been ongoing. As the 2016 general election looms, continuity in key education policies remains an issue. Health coverage is expanding but an increasing demand for care is straining public facilities.