Peru-Pest Analysis
* * MAN 6930 * * October 3, 2011 * * PEST ANALYSIS: PERU * * POLITICAL ENVIRONMENT * Over the past 10 years, Peru has experienced great political change following the impeachment of President Alberto Fujimori in late 2000, on accounts of bribery and corruption. Since then, former Presidents Alejandro Toledo and Alan Garcia as well as current President Ollante Humala have significantly decreased bribery and corruption, stabilizing the political climate and allowing for economical growth to take over. * For the first half of the decade, Peru’s volume of trade increased by 172.5 percent, from US$14,324 to US$39,036 million, which increased the Peruvian economy and made Peru a more attractive country for investment. Several trade agreements also have contributed to this expansion such as:
2009 Peru-United States Trade Promotion Agreement. This guarantees Peru permanent preferential access to the United States market, consolidating investment policy and opening economic activities to investors and professional experts as well as establishing a judicial mechanism for settling trade disputes between the two countries.
In April 2011 Peru signed a free trade agreement with the European Union that is estimated at €500 million in duties alone and will expand markets on both sides, eliminate tariffs in many industries and reduce technical barriers to trade.
In the last five years Peru has also ratified trade agreements with China, Australia and Canada. * ECONOMICAL ENVIRONMENT Peru’s currency is the “Nuevo Sol” which has been steadily growing against the Dollar for the last 7 years with a minor fluctuation in 2009. In 2001, the Nuevo Sol was at a rate of 3.52 per US dollar while today, the current exchange rate is 2.78 per US dollar. Economists speculate that the Nuevo sol will stabilize at 2.71 for 2012. Until 2010, the Peruvian government injected US $10 billion in private investment, (domestic and
2009 Peru-United States Trade Promotion Agreement. This guarantees Peru permanent preferential access to the United States market, consolidating investment policy and opening economic activities to investors and professional experts as well as establishing a judicial mechanism for settling trade disputes between the two countries.
In April 2011 Peru signed a free trade agreement with the European Union that is estimated at €500 million in duties alone and will expand markets on both sides, eliminate tariffs in many industries and reduce technical barriers to trade.
In the last five years Peru has also ratified trade agreements with China, Australia and Canada. * ECONOMICAL ENVIRONMENT Peru’s currency is the “Nuevo Sol” which has been steadily growing against the Dollar for the last 7 years with a minor fluctuation in 2009. In 2001, the Nuevo Sol was at a rate of 3.52 per US dollar while today, the current exchange rate is 2.78 per US dollar. Economists speculate that the Nuevo sol will stabilize at 2.71 for 2012. Until 2010, the Peruvian government injected US $10 billion in private investment, (domestic and
Cited: Coinca S.A.C. - About Us. Web. 28 Sept. 2011. <http://www.coinca.com.pe/>. “Peru Trade Policy.” World Bank-Peru. 29 Sept. 2011. <info.worldbank.org/etools/wti/docs/Peru_brief.pdf>.