Peru is a country located on the central western coast of South America, bordered by Ecuador, Colombia, Brazil, Bolivia and Chile. It has a population of around 32 million people, making it the world’s 19th most populous country. The economy of Peru is largely based on exports such as copper and gold which are two of its main exports.
Mining accounts for around 11% of Peru’s Gross Domestic Product (GDP) and provides employment opportunities to thousands of people throughout the country. Additionally, Peru has large deposits of natural gas and oil which are being exported to other countries in the region; however this sector still faces challenges due to limited infrastructure and lack of investment in this area.
According to cheeroutdoor, the agricultural sector is also an important industry in Peru, providing food for both domestic consumption as well as export; however this sector faces challenges due to deforestation activities which have caused significant damage to some areas within the country.
Tourism is another growing sector in Peru thanks to its rich culture, beautiful landscapes and ancient ruins; however this industry still faces challenges due to limited infrastructure such as roads or airports which make it difficult for tourists to reach certain areas within the country. Additionally, there are also safety concerns related to crime rates throughout urban areas which can be a deterrent for visitors looking to explore this vibrant nation.
Overall, Peru’s economy is one that has seen significant growth over recent years; however there are still many challenges that need addressing if sustainable growth is going to be achieved such as improving infrastructure and tackling corruption within government institutions so that citizens can benefit from these economic gains too.
Throughout the 1980s, Peru was hit by a severe economic crisis. Falling prices on the world market for the country’s export goods, reduced fish catches and reduced agricultural yields contributed to economic instability and political turmoil. In the period 1985–95, the country had an annual, average, growth in the economy of 0.4%, however, population growth was much higher, and gross domestic product (GDP) calculated per domestic decline. To improve the financial situation, and To bring down huge inflation, extensive privatization of state-owned enterprises and substantial savings in the public sector were carried out. The result was a reduction in inflation from 7600% in 1990 to 10% in 1995, and a stimulus to foreign investment. In 1994, the country achieved a full 13% economic growth. For 2002, economic growth was 3.8%.
The tourism industry has a certain importance and is progressing after a few years where health and safety problems have led to a reduction in the number of visits. It is Lima with its Spanish colonial architecture, the incubator Machu Picchu, Lake Titicaca and the Amazon which are the main tourist destinations. In 2004, the number of foreign tourists increased by 11% and amounted to approx. 2.4 million people. Service-providing industries accounted for approx. 53% of GDP.
Agriculture
Agriculture (including forestry and fishing) employed approx. 1/3 of the work force, and contributed about 13% of the country’s gross domestic product. Only approx. 3% of the total area is cultivated, but there are great cultivation opportunities, especially in the east. Most of the export production takes place in the coastal zone, where the rivers are used as a source of irrigation. Cotton and sugar are grown as monocultures on large plantations. In addition, rice, maize, fruits and vegetables are grown. In the highlands, agriculture is more extensive, with large pastures and livestock of cattle, sheep, llama and alpaca. The crops here are corn, wheat, potatoes and vegetables. In the years 1969–76, the large land properties in the highlands were partially converted into cooperatives and smaller uses. Coffee, tea and coca leaves are grown on the eastern slopes. Cookies, which include can be transformed into cocaine, constituting an increasingly important source of income for the population of the inland area.
- Paulsourcing: Top 10 tips for doing business in Peru, covering country profile and market entry requirement.
Forestry
More than half of the country is wooded, but most of the forest is in the Amazon area, as a result of. transport difficulties and inaccessibility are of little use for commercial operations. The only shipping option is via the Amazon and the Atlantic. In the highlands, however, the conditions are more suitable. rubber and mahogany trees. Most of the logging is used on the domestic market for fuel, furniture and as building material and wood pulp.
Fishing
Peru had the largest catch in the world in 1969 (9,223,500 tonnes), but overfishing and unfavorable current conditions almost led to a breakdown in fishing in the early 1970s. Catches were low, but relatively stable throughout the 1980s, and then increased again. In 1994 over 11 million tonnes of fish were fished, but after that time fishing has declined somewhat. Most of the catches are the anchovy fish anchoveta, which is used for herring oil and herring flour, the rest are essentially sardines and mackerel species. The fishing industry was nationalized in 1973, but partially privatized in 1976, and ended up largely to foreign hands.
Catch quantities are largely dependent on offshore coastal conditions where cold water emerges from deeper water layers and contributes to increased nutrient base and more fish. The El Niño ocean current has periodically destroyed fisheries by hot nutrient-poor water displacing the cold nutrient-rich water.
Mining
Abbreviated as PER by abbreviationfinder.org, Peru has been known as a mineral-rich area ever since the colonial era, and it is one of the world’s largest exporters of a number of minerals, including copper, zinc, silver, lead, tin and iron. Bergverk employed 1.5% of the working population (2002) and contributed approx. 3% of GDP. It is expected that the industry, which is dominated by a few large companies, will increase in size as foreign investors become more established.
Most of the mines are located in the Andes Mountains (between 3000-5000 meters). Here iron, copper, lead, zinc, silver, antimony, molybdenum, etc. are produced. Important mining towns are Cerro de Pasco in the central Andes, Cuajone and Toquepala in the southern mountain areas and Marcona near the coast in the south.
Peru has long been producing oil in the northern coastal areas, near the border with Ecuador, and natural gas is being extracted in the east. New petroleum fields were later found. Natural gas is transported by pipeline across the Andes to the coast.
Energy
The electricity supply, which is state-run, has been significantly expanded in recent years. Part of the development has been done with the help of foreign aid, i.e. from Japan. In 1990, only 45 percent of the population had access to electricity, but thanks to a comprehensive government program to electrify the countryside, more than 96 percent of the country is now electrified. Today, the cities have a relatively well-developed electricity grid, but in a number of poor areas the population can still not enjoy access to electricity. On a national basis, it is estimated that this applies to about 20 percent of the population. About half of the electricity production comes from hydropower.
Industry
Peru’s industry is largely based on processing of the country’s natural resources, and employs approx. 10% of the country’s workforce and contributed 24% of GDP in 2002. Almost all industrial production is concentrated in the Lima-Callao area, which includes has large motor vehicle assembly plants and a versatile consumer goods industry. Several of the largest companies in the country process minerals, among others. copper, lead and zinc smelters, and Chimbote in the north has an important iron and steel plant. In addition, there are petrochemicals, foodstuffs and textiles. Several herring flour mills are concentrated along the central coastal zone north and south of Lima.
Foreign Trade
Peru, especially since 1991, has had a deficit in the trade and balance of payments abroad. In 2002, the deficit was 2%. The main export goods are copper (18%), zinc, silver and fishmeal. Agriculture’s most important export goods are coffee and cotton. Imports consisted, among other things, of of machinery and transport equipment, food and chemicals. Peru is considered the world’s largest exporter of cocaine (processed into cocaine). The scope is somewhat uncertain, but it is estimated to have greater value than total legal exports. The United States is the largest recipient of the cook.
- COUNTRYAAH: Find major trading partners of Peru, including major exports and major imports with latest trade value and market share as well as growth rate.
Most important trading partner is the United States with about 1/4 of both imports and exports. Other important trading countries are Japan, Brazil, Argentina, China and Germany.
Transport and Communications
The most important road traffic corps is the Pan-American Highway (2954 km in Peru), which runs along the coast from north to south and has cross connections with inland. In addition, there are two main railways, one in the south and one in the central parts of the country. Both go from the coast to the inland over the Andes. Especially the central train, which runs from Lima, is widely used for ore transport. The course is also the highest in the world, crossing the Andes at an altitude of 4817 meters. The Mollendo-Cuzco railway in the south is connected to the railway network in Bolivia via boat routes on Lake Titicaca.
Note: the capital city of Peru is Lima with a population of 8,617,000. Other major cities include Arequipa (861,100 residents), Trujillo (788,200), Chiclayo (594,750), Piura (413,300), Cuzco (420,100).
The domestic routes are well developed, and Lima-Callao has an international airport. Callao is the main port city, while Talara in the north has large petroleum exports, San Nicolás is the iron ore port and Mollendo – Matarani in the southern copper port and the port city of Bolivia. Peru has a smaller coastal shipping fleet and some domestic traffic on the Amazon, where Iquitos is the river port.
