Peru is located in the central part of South America and borders on the north with Ecuador and Colombia, on the east with Brazil and Bolivia, on the south with Chile and on the west with the Pacific Ocean. Peru is the third-largest country in South America after Brazil and Argentina and ranks among the 20 largest countries in the world. The country’s location facilitates the access to markets in Asia and North America.
Peruvian economy is the one of the most thriving economies in the world. The country’s economy has improved crucially in last decade resulting triple increase in per capita income and 20% fall in poverty level. On the other hand, country still has some issues to tackle as poverty and deficient social services in rural areas and poor infrastructure. Peru’s future is assumed to flourish with a growing economy, increasing investment and low inflation.
In 2016, President Erdogan paid the very first presidential visit from Turkey to Peru. President Erdogan said that Peru has great potential regarding its natural beauty and resources, stable democracy and growing economy that will enable two countries to cooperate in many areas such as tourism, trade, infrastructure investment and many others to be discovered. In order to boost it relationship strongly, Turkey opened its embassy in Lima in 2010 and Peru did the same in Turkey in the same year. There were also visit of over 100 Turkish businessmen delegations came to Peru for forum which was held with Peruvian businessmen, the Presidents encouraged them to perform business together.
President Erdogan and President Humala of Peru discussed that they could cooperate in defense, infrastructure, trade, education and cultural areas and will support the further activities. As mining and energy is the great potential of Peru, there is a huge capability to work together with Turkey. Peruvian president showed his gratitude and said that it was very important meeting for Peru and both country would benefit from free trade agreements. The trade exchange volume between countries was $260 million and is aimed to reach $1 billion. Turkey and Peru is both a home for ancient civilization as well as foreign invasion and their struggle for independence from colonization bear a resemblance.
Economy of Peru is based on its geographical conditions as; water of the Pacific Ocean enables the commerce of fishing, natural resources in the Andes allow mining and diverse climate zones promote extensive agriculture. Peruvian economic growth is progresses mainly by the exports of minerals as gold, silver, zinc and copper, textiles, agricultural products, chemicals, fish meals and services. Recently, Peru is widely opened to international trade by various trade agreements, liberalized labor and good markets and enhanced its foreign direct investment which resulting a growth in market, domestic consumption and its financial sectors.
Peru is expected to remain one of the best performing economies in Latin America with solid fundamentals and strong policy frameworks. Over the last decade growth was about 6% on average which is 2% higher than the average for the rest of the region. This growth was accompanied with low inflation and visible gains in poverty reaction. Growth in 2014 slowed down markedly due to a combination of external and domestic shocks but it is gaining its growth recovery phase back again since. Peru has a low public death and high international reserves and strong policy framework that help to maneuver if there would be any shocks or risks due to external factors.
Peru has reached to impressive achievements in poverty reduction over the last decade. The poverty rate declined form about 60% in 2004 to under 30% in 2014. There has also been a visible drop in extreme poverty and in income inequality which was held by strong growth of the last decade. Peru is giving importance to continue with inclusive policies to sustain these gains in poverty reduction.
The super commodity cycle has ended now that in next few years Peru expects commodity prices much more moderate than it was in the past and external financial conditions to be tighter given expected normalization of monetary policy in the US. In order to boost the potential growth, Peru is giving its attention to tackling informality, improving human capital, education and support investment projects and investing in infrastructure. Although Peru’s poor infrastructure hinders its spread of growth to some regions of the country. Therefore, for foreign investors, especially for Turkey, cooperation in the infrastructure area would be extensive and beneficial undertaking.
Peru remains as a country with the lowest inflation rate in Latin America resulting from its sustainable economic regulations. This economic growth enhanced and developed Peruvian financial sector which is a non-traditional sector. Moreover this accomplishment supported the living standard of the, especially poor, population. Tourism industry of Peru is constantly developing in last decade after a long political and economic turmoil in the end of 20th century. With a rich historical and cultural heritage, archeological sites and biodiverse environment, Peru is a huge attraction for tourists around the world. From 2007 to 2012, the numbers of foreign visitors raised from about 1.9 million to 2.7 million.