Living in Peru : your everyday companion

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DOING BUSINESS IN
(AND WITH) PERU



(by Ricardo Romero Talledo, executive president, Tradingconsult)

By means of Regional Strategic Plans for Exportation (Perx), Peru is looking to define individual plans for each of the country’s 24 regions in the framework of National Strategic Plan for Exportation (Penx) of 2003. Nevertheless, these plans and the interest of the regions’ populations in promoting the development of their export potentials are not enough to achieve success as exporters. This will require a greater commitment and leadership on the part of the regional government and the entrepreneurs in the zones.

One of Peru’s most notorious weaknesses, which has been the subject of criticism not only internally but also internationally, is its lack of a vision for the country. The result of this deficiency has been the almost nonexistence of a consciousness of the importance of planning – meaning the identification, implementation, monitoring and measuring of a series of actions that support us in shaping our development objectives as a nation.

Beginning in 2003, however, things appear to have changed with respect to Peruvian foreign trade. This is due primarily to the fact that, beginning in that year the Ministry of Foreign Trade and Tourism, in coordination with the business community and public and private institutions, defined the first National Strategic Plan for Exportation (Penx) that outlined a State policy on commercial matters for next the ten years. After putting forward strategic guidelines to impel the country’s export development, it saw the need to decentralize this process and to foment the definition of individual plans for each region, known as Regional Strategic Plans for Exportation (Perx).

To date, 16 Perxs have been defined. These have been developed in two stages: first, they worked with the plans of Ancash, Arequipa, Cajamarca, Ica, La Libertad, Lambayeque, Loreto, Piura and Tacna; and secondly, with those of Ayacucho, Cusco, Huancavelica, Junín, Pasco, San Martín and Ucayali. In a third stage that will begin in January 2006, it is planned to complete the plans of Amazonas, Apurímac, Huánuco, Lima, Madre de Dios, Moquegua, Puno and Tumbes. Thus it is hoped that by July 2006, the PERXs of the 24 regions of Peru will be completed.

Without doubt, this change in commercial policy has generated a dynamic of enthusiasm and commitment by all stakeholders. The external front offers a clear example, not only because the growth of exports will reach US$ 16.5 billion by the end of 2005, but also because of the willingness by the international donor agencies to invest their resources in Peru. This interest has been translated into a variety of foreign trade projects tied to the implementation of the Penx and Perxs. These total approximately US$ 58 million and are being financed by the World Bank, the Inter-American Development Bank, the European Union, USAID, and the Secretariat of Economic Affairs of Switzerland - SECO, among others.

While this is good news for the country, it is clear that the sustainability of Peruvian commercial policy depends on other factors that must also be present in order to achieve the strategic targets that have been set. Although the formulation of the Perxs is a first, transcendental step, one only has to see the export photo of Peru to realize that the road to a true decentralization of this activity will be very complex and long-term. Many of the regions have been unable to discern and to correctly process it.

Source: Customs      Elaborated by Tradingconsult

This graph clearly illustrates the great concentration of Peru’s total exports in Lima, with 35.33%, followed by the mining regions of Ancash, Cajamarca, Moquegua and Junín, with 14.71%, 10.25%, 9.08% and 5.55% respectively, as the 5 principal exporting regions. On the other hand, it also illustrates how far behind are Huancavelica, Ayacucho, Amazonas, Madre de Dios and Apurímac, which only contribute 0.02%, 0.02%, 0.07% and 0.24% of the total, respectively.

In the case of Ancash, Cajamarca, Moquegua and Junín, the mining exports are what positions these regions among the five most important. In spite of this fact, the efforts that they attempt to make and that are outlined in the Perxs are directed precisely at changing this exporting map, but are concentrated on the export of goods and services with value added, as is the case in Piura, Ica, La Libertad and Lambayeque, which are among the first 11 exporting regions due in large part to their agro-industrial exports.

During the last year, I have visited 11 of the 16 regions that already have their Perx and can affirm that, for the most part, there is an interest in promoting their export development. There is, nonetheless, a lack of commitment on the part of the Regional Government and the business community. This is especially evident in the regions where they first worked the Perxs, because a year after being concluded, the progress in their implementation has not been encouraging. This is worse still if we take into account the difficulties and deficiencies suffered by the regions in terms of trained human resources, infrastructure, business articulation (especially in the agriculture sector and in small and micro enterprises), information access, and understanding of the dynamics of foreign markets and the operation of the exporting chain, among other fundamental subjects

Much has been said and disseminated on the benefits of signing the FTA with the United States, and in recent months we have seen television publicity that explains how this treaty will contribute to the export growth of the regions and to the generation of new jobs. What it is still not clear is how the regions will be able to take maximum advantage of the apparent benefits of the opening of the greatest market of the world if they don’t correct their deficiencies and generate the necessary competitive conditions.

The change from improvisation to planning and the definition of a State policy in commercial matters, shaped in the Penx and Perxs, will be of little value if the regions do not assume the control and leadership of their own export development. They are the ones who are called upon to fulfill the challenge of export decentralization. Nonetheless, it is essential that the relevant actors of the central government accompany the regions in this difficult task, especially in the transfer of knowledge, know-how, information and economic resources. Let’s not lose sight of the goal and of what has already been accomplished, and work together with the regions in order to make Peru an "exporting country with a supply of goods and services that is competitive, diversified and with value added."

tags : Peru USA business economy decentralization Import Export

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2 Comments

# Wolfgang Glueschke says :
6 September, 2006 [ 08:50 ]

Miraflores, 6 September 2006

Mr. Ricardo Romero Tallado
Executive President
Tradingconsult

Re.: "The Challenge of Export Decentralization" "Living in Peru" of 3 September 2006

I very much enjoyed reading your contribution on "Export Decentralization" in Peru. As decen-tralization generally has in the past been close to a failure, it would be surprising if exports were an exception.

Do you have plans to dissiminate this note in Spanish? What is "Tradingconsult" and were is it based?

We are trying to develop a (small) agricultural/ agroindustrial export programme (business): orga-nic mangoes (Ancash) and artichokes(pilot pro-ject near/in Lima),including eventually in the sierra, olives and olive oil (Tacna region), and other "no-traditional" products.

Hoping to be able to talk to you eventually,

sincerely yours,

Wolfgang Glueschke PeruTrade & Investment Ltd. Pedro Venturo 142, Aurora Miraflores, Lima 18 Tel.: 511-446-8132 Fax: 511-444-0658 E-mail: agroperuinfo@gmail.com

# Wolfy says :
6 September, 2006 [ 09:16 ]

Hallo Namensvetter :-) this article was provided by the AmCham, the American Chamber of Commerce of Peru. I will send you personal email to let you know how to get in touch with them and Tradingconsult. gracias for your comment! Wolfy

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