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Peru |
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Country information
PERU TODAY
Country facts
Full country name: Republic of Peru
Area: 1,285,220 sq km (496,225 sq miles)
Population: 28.22 million (2007 estimate)
Capital city: Lima (population: 8.45 million in metropolitan area)
People: Indigenous (45%), Mestizo (37%), European/White (15%), African, Japanese, Chinese, and other 3%
Language(s): Spanish (official), Quechua (official), Aymara and a number of minority Amazonian languages
Religion(s): Roman Catholic (81.3%)
Currency: Nuevo Sol
Major political parties: Unión por el Perú (UPP), Partido Aprista Peruano (APRA), Unidad Nacional (UN), Alianza por el Futuro, Peru Posible, Partido Nacionalista Peruano
Government: Constitutional system of presidential democracy. The 1993 constitution, approved by referendum, provides for an executive for 5 years. The principal executive body is the Council of Ministers, headed by the Prime Minister, appointed by the President. A unicameral 120-member Congress is elected at the same time as the President and also sits for 5 years. It is the main legislative branch of government with the President holding a veto. An 18 member Supreme Court based in Lima heads the judicial branch.
Head of State: President Alan Garcia Perez (APRA) since 28 July 2006.
Prime Minister: Javier Velásquez Quesquén
Foreign Minister: Jose Antonio Garcia Belaunde
Membership of international groupings/organisations: Peru holds membership of the UN; WTO; G-11; G-15; G-19; G24; G77; Organisation of American States (OAS); Asia Pacific Economic Community (APEC); Andean Community (CAN); Rio Group; Union of South American Nations (UNASUR), Inter-American Developmental Bank (IADB); IMF.
DID YOU KNOW?
- Paddington Bear is from 'deepest darkest Peru'.
- The mysterious lost Inca city of Machu Picchu was uncovered in 1911. More than 58,000 British tourists visited it last year.
- Peru is one of the most bio-diverse countries in the world, containing 83 of a possible 103 types of ecological zone. 13% of the Amazon jungle is located in Peru.
- The remains of the largest adobe city in the world are located at Chan Chan in northern Peru.
- The area around Nasca, famous for its geometric lines, is also home to the highest sand dune in the world (2,078m).
- The Colca Canyon in southern Peru is twice as deep as the Grand Canyon.
- The UK is the second largest foreign investor in Peru.
ECONOMY
Basic Economic Facts
GDP: US$96.2bn (2007) (World Bank)
GDP per head:US$ 3,450 (2007) (World Bank)
Annual growth: 9.00% (2008) (MEF figure)
Inflation: 6.65% (2008) (MEF)
Unemployment: 8.4% (2008)
Major industries: Mining, hydrocarbons, fishing, textiles, food processing, agriculture, financial services and tourism.
Major trading partners: United States, Latin American countries, European Union and Asia.
The Peruvian economy has grown consistently for the last six years and has been among the top performers in Latin America with an average of 61.8% GDP growth between 2001 and 2007. GDP growth was 9% in 2008 and despite the world economic downturn is forecast to be around 2-3% in 2009. Inflation went up from 3.9% in 2007 to 6.65% in 2008, driven up by higher costs for oil and imported foodstuffs such as wheat, flour, and corn. Government steps to tackle inflation in a difficult world economic climate are paying off, with inflation falling each month since the beginning of 2009 and reaching the lowest level since December 2008 at 2.68% by the end of July 2009.
The strongest areas economically are Lima and the northern coastal areas (Piura, Paita, Trujillo, Lambayeque), where growth is being driven by the agricultural export boom, but other traditionally poor areas in the northern and southern highlands are now also starting to see the benefits from the expansion of mining and the redistribution of mining tax income, although the economic downturn has slowed down progress as the mining industry in particular feels the effects. World Bank endorsed figures indicate that overall poverty levels fell from 44 % in 2006 to 39% in 2007. However, the main gains have been in urban areas and average incomes in many rural areas remain below US$1 a day.
The main drivers of growth have been traditional exports such as fisheries and mining, and increased infrastructure investment. Non-traditional agricultural and minerals exports are also doing well. The government has injected US$3.17 into the public finances for 2009, much of this will be spent on infrastructure development, especially in housing, water, roads, ports and airports.
The second phase of the Camisea natural gas project is underway. This will include several regional gas pipelines, a liquefaction plant and an export terminal. The country's first petrochemical plant is also planned and will use by-products from Camisea. . A number of regional airports and regional water treatment services, regional ports, major roads, tourist complexes, electric grid improvements, communications networks, oil and gas lots and natural gas pipelines are among recent and upcoming tenders. The government is looking increasingly to private investors to fund improvements in healthcare and other state services, using PPP models. Renewable energy will become increasingly important as Peru looks to diversify its energy matrix, and a Renewable Energy Promotion Law was passed in May 2008.
Peru currently benefits from various preferential trade arrangements, which cover the most important export products and markets. These are the GSP+ for access to EU markets and Peru’s Free Trade Agreement with the US, which came into force in early 2009. The EU and Peru are negotiating a trade agreement and other trade agreements with Asian countries such as China, Korea and Singapore are progressing.
HISTORY
An advanced indigenous Inca civilisation flourished in Peru from 1200-1533. With its capital in Cuzco, the Inca Empire stretched from northern Ecuador to central Chile. The first Spanish landings were in 1531 and in 1533, led by gold-hungry explorer Francisco Pizarro, they captured Cuzco. Pizarro founded the capital city of Lima in 1535 and by 1542 consolidated control throughout the country. Gold and silver from Peru became the foundation of colonial Spanish wealth and power in South America, which lasted until the late 19th century. Jose de San Martin of Argentina and Simon Bolivar of Venezuela were influential figures in Peru's independence movement. San Martin declared Peruvian independence on 28 July 1821 but it was not until December 1824 that, following a long struggle, forces led by General Antonio Jose de Sucre finally defeated the Spanish at Ayacucho. After unsuccessful attempts to regain her former colony, Spain formally recognised Peru's independence in 1879.
Following independence, Peru was embroiled in a number of territorial disputes with its neighbours. Most seriously, Peru and Bolivia engaged in a 4-year war against Chile (1879-83). Chile's victory in this 'War of the Pacific' resulted in a territorial settlement with Peru ceding the province of Tarapaca. Peru and Ecuador clashed in 1941 after which the Rio Protocol sought to establish an agreed boundary. However, continued disagreement led to further bouts of armed conflict in early 1981 and again in early 1995. A historic peace accord signed in 1998 finally demarcated the Peru/Ecuador border and in 1999 Peru and Chile implemented the last outstanding article of their 1929 border agreement. Peru disputes her maritime border with Chile and in January 2008 lodged its case at the International Court of Justice in The Hague.
BBC News Country Timeline: Peru
Historically, the military have played an important role in Peru. Coups have been a feature of Peru's history and intermittently disturbed civilian constitutional government. The most recent period of military rule (1968-80) began when General Juan Velasco Alvarado overthrew elected President Fernando Belaunde and embarked on an ambitious program of radical reforms. General Franciso Morales Bermundez replaced him in 1975 and presided over the return to civilian government in accordance with a new constitution created in 1979. In elections held in May 1980, Belaunde was re-elected by a large majority.
In the early 1980s, El Niño weather phenomenon-related problems, a continued economic crisis and hyperinflation caused Belaunde's popularity to slide. More seriously, cultivation of illegal coca in the eastern Andes and the emergence of the left-wing terrorist organisations, Sendero Luminoso (Shining Path) and Movimento Revolucionario Tupac Amaru (MRTA) seriously destabilised the country. In 1985, Alan Garcia, backed by his APRA party, won the presidential race witnessing the first democratic succession for 40 years. Continuing economic problems during this administration led to a further bout of hyperinflation in the late 1980s. In the 1990 elections, voters turned to college lecturer, Alberto Fujimori, who surprised many in coming from obscurity to the Presidency. He quickly introduced heterodox economic measures to stabilise inflation. Faced with opposition in Congress, Fujimori staged an 'auto-coup' in April 1992, revising the constitution, calling new congressional elections and pushing through free-market economic reforms. Fujimori's government also took a hard line against domestic terrorism. During his Presidency, Shining Path's leader, Abimael Guzman, was captured and imprisoned.
Fujimori's decision to seek a constitutionally questionable third term and his subsequent tainted victory in June 2000 bought political and economic turmoil. A major corruption scandal linked to his Security Chief Vladimiro Montesinos broke in September 2000, weeks after his inauguration, which forced Fujimori to announce new elections in which he would not participate. Under mounting pressure, he fled to Japan, from where he resigned. Congress did not accept his resignation, but ruled him morally incapable of holding office for 10 years.
A transitional administration under interim President Valentin Paniagua took office and oversaw free and fair elections in April and June 2001. Montesinos was apprehended in June 2001 in Venezuela and brought back to Peru to face trial. In 2002 he was sentenced to imprisonment for abuse of authority and illegally taking control of Peru's intelligence service. He has since been sentenced for a number of other crimes and remains on trial facing further criminal charges.
Despite the 10-year ban on Fujimori holding office, he announced his intention to contest the 2006 election. In November 2005, he travelled from Japan to Chile where he was detained by the Chilean authorities. In September 2007, Fujimori was extradited to Peru to face human rights and corruption charges. The separate trials lasted from December 2007 to October 2009. Fujimori was convicted on all charges. The sentences range from six to 25 years and are being served concurrently. Fujimori has announced he will appeal the verdicts.
Alejandro Toledo (Peru Posible) beat a resurgent Alan Garcia (APRA) in the national elections in June 2001 to become Peru's first indigenous President. Toledo led a post transitional government that pursued democratic reform and modernisation of the state. His administration was committed to orthodox economic policies and the country achieved strong and sustained economic growth throughout his period in office. Nevertheless, Toledo's administration was tainted by a number of scandals and struggled with low levels of popularity (under 10%) for much of its term in office.
INTERNATIONAL RELATIONS
Relations with neighbours
Peru's relations with Ecuador have grown stronger in recent years, helped by the settlement of border disputes. In October 1998, Peru and Ecuador signed a peace treaty, which marked the end of the last and longest-running source of international armed conflict in the Americas. The agreement gave Ecuador access to, but not sovereignty over, 1 square kilometre of land at Tiwinza in the Cordillera del Condor border area, near the site of the brief war in January 1995. Both the Peruvian and Ecuadorian Congresses ratified the agreement in November 1998. The formal demarcation of the Peru-Ecuador border occurred on 13 May 1999.
On 13 November 1999, Chile and Peru signed an agreement on certain frontier issues that had been outstanding since their signature of the Treaty of Lima in 1929. In July 2001 during the visit of Chilean President Lagos to Peru a joint declaration was signed. The main elements were the creation of a permanent bi-national Co-operation Committee chaired by Foreign Ministers and a committee to develop greater bilateral understanding and co-operation on defence issues. A number of initiatives have since been launched to strengthen economic and political ties. Peru still disputes its maritime border with Chile and in January 2008 lodged its case at the International Court of Justice in The Hague.
Relations with the international community
Peru has been a UN member since 1949. Peruvian Javier Perez de Cuellar served as Secretary General from 1981-1991. Peru was elected a non-permanent member of the UN Security Council for the period January 2006 to December 2007. Peru is also an active member of the Andean Community, APEC and the WTO. In May 2008 Peru hosted the bi-annual summit for leaders of Latin American, Caribbean and European Union countries and hosted the APEC summit in November 2008.
Relations with the UK
Bilateral relations have taken on a new dimension in recent years. Momentum has been sustained through a programme of inter-government and parliamentary visits, including HRH the Princess Royal in July 2007, Dr Kim Howells, FCO Minister of State in September 2007, and May 2008, and Baroness Ashton of Upholland in May 2008. The UK and Peru work closely together in the areas of climate change and energy, economic development and trade, drugs and international crime, defence and democracy and governance. Peru is an increasingly popular destination for British tourists, with more than 67,000 visiting the country in 2008.
GEOGRAPHY
Peru is located in Western South America bordering the Pacific Ocean between Chile and Ecuador. Bolivia (a 900km border), Brazil (1,560km) and Chile (160km) are located to the south and east and Ecuador (1,420km) and Colombia (1,496km) to the north. The whole of the western coast is desert with little rain. From this coastal shelf, the Andes rise steeply to a high Sierra, which is studded with groups of mountains and deep canyons. East of these mountains lies the vast jungle of the Amazon basin. The capital, Lima, to the west is the sprawling hub of the country.
TRADE AND INVESTMENT
Trade and investment with the UK
According to Peruvian Government statistics the UK is the second largest investor in Peru. British investment increased by 181% over the last decade, rising to US$3478 million in 2008. British investment now represents 19% of total registered FDI in Peru as at December 2008. The largest investment sectors are mining, finance, industry and energy. British exports to Peru have grown steadily since 2002. During 2008 total bilateral trade between Peru and the UK amounted to US$542 million, up from US$362 in 2007. Total registered exports Peru-UK in 2008 were US$368 million and UK exports to Peru US$174 million, a ratio of 2:1. In 2008 the main exports from the UK included machinery, machinery parts and engines, followed by pharmaceutical products, chemical and chemical companies as well as drinks, including whisky and bank notes. The main exports from Peru to the UK in 2008 were metals, principally gold, tin, silver and zinc, together accounting for around 57% of the total. Agriculture produce, particularly asparagus, coffee, grapes, citrus fruits and avocados and fish products and textiles are all leading exports. Many British companies both large and small have a presence in Peru, either as fully incorporated companies or via representatives and agents.
UK Trade & Investment Country Profile: Peru
UK development assistance
Peru benefits from the Department for International Development's (DFID) programme for the Andean region and block grants to some UK NGOs active in the country under Partnership Programme arrangements. The UK also funds around 17% of the EU development programmes in Peru and the region, and contributes to World Bank and IDB activities. The UK provided around £2.5m of assistance to Peru following a devastating earthquake in August 2007.
POLITICS
Presidential and parliamentary elections took place between April and June 2006. Alan Garcia (APRA) beat the nationalist candidate Ollanta Humala in the second round and assumed the Presidency on 28 July 2006. His government has undertaken to continue the sound economic management of the previous administration. It is also committed to tackling the problems of poverty and social exclusion highlighted during the election campaign. Regional and municipal elections took place in November 2006, with local, independent candidates taking the majority of seats. Parliamentary elections are due in November 2010, with the next presidential elections scheduled for June 2011.
HUMAN RIGHTS
Human rights problems featured prominently in Peru during the violent conflict between Shining Path, the government and the armed forces in the 1980s and 1990s. It is estimated that around 70,000 people died as a result of this conflict.
In 2001 interim President Valentin Paniagua established the Truth and Reconciliation Commission to investigate abuses by both terrorist organisations and the security forces. The Commission's mandate was to analyse, investigate and ascribe responsibility for abuses and to promote reconciliation and peace. The Commission's final report was published in August 2003. Although many of its recommendations are still to be implemented, some progress has been made. A reparation plan was approved by the Peruvian Congress in July 2005 and in October 2006 a committee was established to implement this plan. The first reparation payments to communities affected were made in June 2007.
Peru is firmly committed to meeting international standards in the observance of human rights. The country returned to the jurisdiction of the Inter-American Court of Human Rights in January 2001. However, some human rights concerns remain. Most criticism is linked to the judicial system, particularly the slow administration of justice. Conditions in Peruvian prisons are also harsh, aggravated by overcrowding, lack of sanitation and poor health care. Poverty and extreme poverty, particularly in the rural areas of the country, remain a widespread problem. However, progress is being made in addressing this issue. Figures showed a drop in overall poverty from 44.5% in 2006 to 36.2% in 2008, with a corresponding fall in extreme poverty from 16.1% to 12.6%.
UK support for human rights
The UK continues to monitor human rights in Peru and to support initiatives in this area. The most recent include projects with Peruvian NGOs to support victims of the internal conflict, to promote institutional reforms, as well as a forensic anthropology study proposed by the Truth and Reconciliation Commission.
CLIMATE CHANGE
Peru is highly vulnerable to climate change. It has the largest percentage of tropical glaciers in the world and as those above 5,500 metres above sea level are lost, Peru’s water and energy supplies are threatened. As most of Peru’s population is concentrated on the coast, the potential for negative social and economic impacts is high. Peru’s booming agriculture, fishing and livestock industries all stand to be affected.
As the second Amazon country (around 13% of the Amazon is within Peru’s borders), Peru has an important role to play in the conservation of the world’s rainforests. It has pledged to bring its deforestation level to zero by 2019.
UK support for action on climate change
We have a very strong relationship with the Peruvian government on climate change. We are working together on a series of projects to increase decision-makers’ and opinion formers’ knowledge and understanding of climate change. These include studies on the impacts of climate change in the fisheries and mining sectors. These studies have strong private sector support and will form part of a wider study on the economic impacts of climate change in South America which we are supporting with the United Nations and Inter-American Development Bank. With the BBC we are supporting a regional programme of workshops to explore the challenges of communicating on climate change and we are also bringing regional financial decision makers to discuss the implications for Peru and South America of the various finance mechanisms which have been tabled for debate at the UN conference on climate change in Copenhagen in December 2009.
