Peru is no longer a “pariah on the black list” of foreign investment, since Peruvian President Alberto Fujimori introduced a series of economic reforms in the early 1990s, Alvin Adams, the U.S. ambassador to Lima, told GlobalFax in an interview on Dec. 12. He encouraged companies involved in tourism, environmental technology and construction to take another look at investing in Peru.
During the 1980’s, investors avoided Peru because of heavy government control of vital industries, a soaring inflation rate and an underdeveloped infrastructure, he said.
In the past five years, however, the government has sold its telecommunications, mining, energy and finance holdings to companies in the U.S., Spain, Canada, Chile and Peru, and plans to privatize several more industries, including fishing, ports administration and the railway system.
The oil company Petro Peru, the mining company Centromin, and Sedepal, the company in charge of water and sewage, will also be up for sale. Peru aims to reduce government ownership to a minimum, Mr. Adams said.
Peru has reduced inflation from a high of 7,500% to about 10% in 1995, he continued, and 40% of the government’s budget until the end of the century is allocated to “basic human needs,” including education and infrastructure development.
Mr. Adams said that he had more faith in Peru than in Mexico and Argentina because Mexico is hampered by a large deficit, and Argentina’s currency is tied to the dollar, which severely restricts its options when it comes to monetary policy.