Peruvian Central Reserve Bank governor, Julio Velarde, attributes his country’s impressive economic success to a number of factors, citing macroeconomic stability, a growing middle-class, and the continued strength of the extractive and commodity industries as key. Peru’s mining industry makes up more than half of its total export earnings. The country is also the second largest copper producer after Chile, of which China has been a significant investor. Velarde did admit, however, that a dearth of projected mining production and investment projects beyond 2016 is a concern that needs to be addressed.
Governor Velarde, who spoke at a CCA event on July 15, was joined by analysts Eduardo Suarez of Scotiabank and Katie Micklethwaite of Control Risks. Jonathan Hausman, vice-president of alternative investments and emerging markets at the Ontario Teachers’ Pension Plan, moderated the lunch discussion. Both commentators shared the Governor’s optimism about Peru’s economic growth adding that foreign direct investment in Peru has led to strong and fast growth. They also praised the country’s growing middle class. But the commentators cautioned that challenges remain for Peru. They recommended that Peru invest more in human capital, increase productivity, and address bouts of political instability and inequality.
All panelists were optimistic about the Pacific Alliance, a trade block comprised of Peru, Chile, Colombia, Mexico, and, most recently, Costa Rica. Canada holds observer status. The Pacific Alliance is the new player in town in Latin America where it was launched in 2012, and many argue that the group is already showing success with members achieving GDP growth rates above 5 percent for 2012. According to one speaker, the Pacific Alliance has the potential to be a hugely powerful economic force in the region if it continues to focus on trade—and leaves politics aside.
For more on the event, visit out photo gallery. The CCA thanks the Peruvian-Canadian Chamber of Commerce for co-hosting the event, and our event sponsors ScotiaMcleod and Heenan Blaikie.