Peru - Economic sectors

Peru's diverse geography and climates, as well as its location along South America's central Pacific coast, give it privileges enjoyed by few nations. However, the country's natural wealth in agriculture, mining, and fishing

has not been harnessed to the benefit of the population. The country's principal problems have been, and continue to be, its reliance on raw material exports and its unstable political climate. As a result of its dependence on raw materials, Peru's economy is highly susceptible to downturns in the world economy. Natural phenomena, particularly El Niño (a warm water current that changes ocean and air patterns off the coast of Peru and provokes droughts in some parts of the world and flooding in others), periodically play havoc on fishing and agriculture, as well as destroy infrastructure . Because of political turbulence, Peru has had 3 presidents between November 2000 and November 2001, a disturbing trend that keeps local and foreign investors skeptical about placing their money in the country.

The administration of former president Alberto Fujimori (1990-2000) emphasized the raw material export model, offering incentives to capital-intensive investments, particularly in mining. By privatizing telecommunication services, the government opened this as a new and important sector within the economy, with investments totaling nearly US$4 billion throughout the last decade. The new government, while recognizing the importance of mining, is pledging to emphasize labor-intensive sectors, particularly manufacturing, farming, and tourism as a way to diversify the economy and create jobs.

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