Economic Development in Peru

The United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) predicted that Foreign Direct Investment in Peru will total $9.8 billion for the year, down 18% from 2013’s total. This decline was chalked up to the declining commodity prices of the metals that fuel Peru’s mining industry and overall economy. Though the Peruvian economy had a down year, compared to the rest of the region, it was one of the better performers. In Latin America as a whole, FDI fell 23.5% in the first six months of 2014 as compared to 2013, with Mexico and Argentina hardest hit. Brazil and Colombia, two countries that recently reelected incumbent presidents, were the only countries in the region that actually experienced FDI growth.

The Commission also announced that Peru is currently on track with its National Plan for Economic Diversity, and should start seeing results within one or two years. The ECLAC cautioned that, of course, some sectors are more complex and could take longer than others. Nonetheless, the Commission said, Peru should take advantage of its strong mining sector to become a provider of services and goods related to this industry, thus diversifying its economic base. Clearly, though, a persistent slowdown in the global mining industry, and a lingering depression in metal prices, would have consequences beyond just investment in new mining projects, and would also affect the development of the envisioned Peruvian mining services industry.

Meanwhile, the Peruvian authorities continued their crackdown on illegal mining, with the Peruvian navy interdicting an illegal mining operation in Puerto Inca, destroying equipment that the miners had been using.