Over the past decade, Peru has shed its image as an agrarian economy, famous mostly for its ancient Inca sites, like Machu Picchu. Latin America’s fastest-growing economy has steadily consolidated its role as the region’s powerhouse, whose GDP is now dominated by the services and manufacturing sectors.
In 2014, Lima was unsurprisingly Latin America’s most visited city and it looks like the Peruvian capital will be snatching up the award again this year. Yet with all the tourism traffic coming to Peru (an estimated 4.2 million people this year), what remains even more impressive is what is coming out of the country. And I’m not just talking about its world-famous avocados.
Last week, our team met with Jose Javier Tam Perez, president of the Cámara de Comercio Peruano China (CAPECHI) or Chinese-Peruvian Chamber of Commerce, to understand how China and to a broader extent, Asia impacts the Peruvian economy
“We can create a market here or in China. That’s what [we] want to do. We try to always think [of new ways] to develop a market” Tam said.
2015 has already seen new collaborations and agreements between Peru and its Asian neighbors, among them:
1) A deal to diversify bilateral exchange. With trade historically focused on natural resources, there has been fresh commitment to expand cooperation to industrial production and transportation.
2) An agreement to build a 5,300 km transcontinental rail link between Peru and Brazil. The multi-billion dollar deal has the potential to increase trade in the region. Studies are currently being conducted to ensure the social benefits from the project and minimize its negative impact on the environment.
3) A surge in copper exports. As China needs more copper for its buildings, power grids and electronics, Peru is predicted to open more mines to meet that demand and may become the world’s second-largest producer as a result.
4) A boom in exports to Japan. As of June this year, Peru sold 254 new products to the Japanese market. The Japanese have nurtured a keen taste for Peruvian produce, with their latest craving being the cherimoya, a fruit native to Central and South America. Last year, Peru posted a trade surplus of $500 million and is expected to report a bigger surplus by the end of this year.
Amid this upward trend in trade with Asia, Peru is certain to benefit in the next few years. I, for one, am hoping it continues for the long term.