Saturday, August 28, 2010

Exploring Investment Opportunities In Peru

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As the world fights hard to control global economic downturn and volatile markets more and more investors are now seriously considering investment options in emerging economies that can offer a much better return to their investments both in the short as well as the long term. Since most investors have already been looking at emerging economies for a long time, the most talked about emerging economies like BRIC nations have also been over invested and overheated. With the global population of the planet increasing by the day, it makes much more investment sense to look at nations with Commodity based economies rather than just investing in emerging economies as a fad.

Arguably one of the most important commodity based economies after Chile is the Latin American nation of Peru. Peru's government can definitely take a leaf out of Chile's book by offering more incentives by opening up and showcasing a cleaner and an investment friendly environment. If Peru can manage its policies accordingly, there is a potential for a lot of global investment in this Andean nation.

Peru is a country that features practically all of the planet's climates, with remarkable natural, mining, and power resources. According to FAO figures, Peru, the third largest country in South America has 7.6 million hectares with immediate agricultural potential, but less than 3.6 million are actually used. This paves the way for a good Agriculture based commodity segment as an investment opportunity.

The country’s top exports apart from Agriculture products include copper, gold, zinc and crude oil. Furthermore, the country’s Ministry of Energy and Mines estimates that only a 10% of the overall national territory with mining potential has been explored so far.

Peru is a member of the Asia Pacific Economic Cooperation (APEC), which facilitates the mechanism development of the economic-trade cooperation with other 20 powerful economies. Peru is, likewise, is one of the 5 country members of the Andean Community of Nations, which has more than 120 million inhabitants and an overall GDP of around US$ 300.00 billion.

  • Peru ranks fifth worldwide in gold production (first in Latin America), second in copper, and is among the top 5 producers of lead and zinc.
  • Peru has also signed agreements for the promotion and protection of investments (BIT) with 29 countries of Europe, Asia and Latin America
  • Around 8 million hectares are suitable for agricultural farming, 18 million hectares for pasture and 49 million hectares for sustainable forest activities (besides 54 million hectares of protection lands).
  • Peru is the leading exporter of asparagus and paprika in the world, the leading producer of fishmeal, oil, Alpaca and Vicuña fibers and is also the leading producer of silver worldwide.
Investing In Peru:

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