Peruvian President: Peru's economy must diversify

Peruvian President Ollanta Humala signaled over the weekend that he would support a policy of diversification so that his country can move beyond its reliance on exporting raw minerals and metals. He said that, “[Peru] cannot continue to develop itself living just on the sale of minerals and gas. The world has change in the last 50 years, and now it is not possible to think of developing a country in this way.” The news report, however, did not quote President Humala as proposing an alternative economic model for the country, or list the industries that he plans to focus on developing.

On Sunday, Peru21 ran a series of articles on the role of mining in Peru, and the effect that social conflicts have had on the country. Peru21 recognizes that Peru is a mining country, as mining accounts for 50% of exports, 20% of the tax base, 11% of GDP, and is the main source of foreign direct investment. However, despite the industry’s importance to the country’s economy, since 2008, 15 large mining projects worth more than $21 billion have been delayed or canceled because of conflicts with local communities. Click through to see the infographics that Peru21 included with the article.

According to Peru21, Cajamarca is the region in the country that has lost the most because of social conflicts, losing an investment of $8.1 billion in mining projects. Second in line is the department of Apurímac, which has lost $7.3 billion worth of investment. The report explained that the abandoned projects had repercussions throughout other sectors of the regional economy, affecting poverty levels, the development of the country’s infrastructure, and social programs.

On the subject of social conflicts, Southern Copper president Oscar González announced that his company will no longer hew to the 60-day timeline it had previously established to negotiate a resolution to the Tía María protests. He explained, “We know that it is not realistic to reach an agreement in such little time, and most of all, we know that we cannot convince everyone. So we will continue working without setting a timeline, but we will keep working until we get it done.”