International Business Environment Midterm
Evaluation of Potential for Import and Export Trade in Peru
Table of Contents
The Peru of today is much different from when it was captured from the Incas by Spanish Conquistadors in 1533. In 1821, Peru declared its independence from Spain and after many years of military rule adopted a democratic leadership in 1980. The following years brought further economic instability and civilian unrest. In 1990 President Alberto Fujimori came into office and led a turn-around in the economy and helped to reduce the amount of guerrilla activity within the country. Fugimori was removed from office in ...view middle of the document...
Peruâ€™s labor force reflects the topography of the country as identified by data from the CIA â€“ World Fact Book for Labor Force â€“ by occupation, Land Use, and Urbanization categories.
As indicated, land use is divided between arable land at 2.88%, that is, the land used for cultivated crops that are replanted after each harvest, permanent crops at 0.47%, that is, orchard type crops, and other at 96.65%, that is, non-agriculture related use such as mining and urban areas, all based on 2005 data. Statistics for the labor force by occupation (2005) reflect land use with agriculture making up 0.7%, industry at 23.8%, and services at 75.5%. Urbanization makes up 71% of the total population (2008), with the majority of all urbanization existing near the western coastal regions extending to the foothills of the Andes Mountains where the remaining areas are directly related to the mining industry.
As we move forward from here we will begin to further examine economic climate of Peru and look at its current resources and commodities currently imported and exported. We will also look into Peruâ€™s major industries, transportation, communication and infrastructure and attempt to assess their role in the future growth of Peru and its economy. We will also give consideration to the business climate in Peru and the risks that are prevalent today and potential threats to conducting business tomorrow. We will conclude with what we believe are the future growth areas for international trade with Peru.
Peruâ€™s Potential for Import and Export
Peru has many import and export trading partners around the world. These major global trading partners include the US, China, Canada, Japan, Argentina and Mexico as well as neighboring partners Brazil, Ecuador and Chile. Peru is one of the most ecologically diverse countries in the world, giving it an advantage in the exportation of goods in the areas of mining, agriculture, the fishing industry, and textiles.
Although Agriculture plays an important role in Peruâ€™s export sector, it is vulnerable to weather patterns, such as El NiÃ±o. As a result, Peru imports large amounts of food products, such as grains, soybeans, and other basic foodstuffs. Peru imports were worth 2 Billion USD in December of 2009. Peruâ€™s major imports include petroleum and petroleum products, plastics, machinery, vehicles, iron and steel, wheat, and paper. Its main import partners are United States, China, European Union, Brazil and Ecuador.
Factors of Production
The acquired skills of Peruâ€™s population revolve around its primary industries and products, and the services that support those industries. Specifically, skills required to facilitate their thriving agricultural and fishing industry as well as the mining of raw materials such as iron ore, copper ore, oil and natural gas and the refining of those raw materials into finished products.
Peruâ€™s warm and diverse...