Peru has become one of the most successful economic performers in the developing world. The resurgence of mining, at a time of high metal prices, has been one of the key drivers behind the country’s stellar growth record.
With average annual growth rates above 6%, in the past decade Peru has become one of the most successful economies in the developing world. Roque Benavides, the Executive President, Chief Executive Officer and Chairman of the Board of Compañia de Minas Buenaventura, believes that Peru’s socioeconomic development is laudable. “Peru has managed to reduce inflation and almost eliminated terrorism, which has granted plenty of economic stability to the country.” He adds that Peru “is currently one of the most open economies in the world,” thanks in part to free trade agreements “with 55 countries in the world, which represent two thirds of the global GDP.”
Mining plays a central role in the national and international economies. Manuel Fumagalli, Executive Director of Barrick Gold Corporation, calls mining “a driver for development” in Peru. In the last decade, “mining has accounted for at least 10% of the GDP, and in the last five years, around 59% of that has been due to mining exports.”
Oscar Espinosa Bedoya, Executive President of Ferreycorp (supplier to mining companies), explains what this growth means for Peru’s population. “The income level of the population is growing; statistics show strong growth of the middle class.” Peru has increased its middle class to one-half the population and reduced its poverty rate by half, to one-quarter of the population.
Economic success is also partly due to the government’s relationship with businesses. “Foreign investors… get the same treatment as domestic investors regarding tax and profit repatriation issues,” Mr. Bedoya points out.
The government’s stable economic policy had benefited the mining industry as well. “The economic policy has remained the same for twenty years. … Because of the continuity of this effort, the cumulative rates of growth have been impressive,” Mr. Bedoya explains.
Though the rate of growth for this year is projected to be below the average rate due to lower metal prices, optimism is warranted, according to Mr. Bedoya. “Growing 2.5% or 3% is not the end of the world. There are some countries that would give anything in their power to grow at these rates…We are very optimistic.”