Throughout the 1980s, Peru was hit by a severe economic
crisis. Falling prices on the world market for the country's
export goods, reduced fish catches and reduced agricultural
yields contributed to economic instability and political
turmoil. In the period 1985–95, the country had an annual,
average, growth in the economy of 0.4%, however, population
growth was much higher, and gross domestic product (GDP)
calculated per domestic decline. To improve the financial
situation, and To bring down huge inflation, extensive
privatization of state-owned enterprises and substantial
savings in the public sector were carried out. The result
was a reduction in inflation from 7600% in 1990 to 10% in
1995, and a stimulus to foreign investment. In 1994, the
country achieved a full 13% economic growth. For 2002,
economic growth was 3.8%.
COUNTRYAAH, the tourism industry has a certain importance and is
progressing after a few years where health and safety
problems have led to a reduction in the number of visits. It
is Lima with its Spanish colonial architecture, the
incubator Machu Picchu, Lake Titicaca and the Amazon which
are the main tourist destinations. In 2004, the number of
foreign tourists increased by 11% and amounted to approx.
2.4 million people. Service-providing industries accounted
for approx. 53% of GDP.
Agriculture (including forestry and fishing) employed
approx. 1/3 of the work force, and
contributed about 13% of the country's gross domestic
product. Only approx. 3% of the total area is cultivated,
but there are great cultivation opportunities, especially in
the east. Most of the export production takes place in the
coastal zone, where the rivers are used as a source of
irrigation. Cotton and sugar are grown as monocultures on
large plantations. In addition, rice, maize, fruits and
vegetables are grown. In the highlands, agriculture is more
extensive, with large pastures and livestock of cattle,
sheep, llama and alpaca. The crops here are corn, wheat,
potatoes and vegetables. In the years 1969–76, the large
land properties in the highlands were partially converted
into cooperatives and smaller uses. Coffee, tea and coca
leaves are grown on the eastern slopes. Cookies, which
include can be transformed into cocaine, constituting an
increasingly important source of income for the population
of the inland area.
More than half of the country is wooded, but most of the
forest is in the Amazon area, as a result of. transport
difficulties and inaccessibility are of little use for
commercial operations. The only shipping option is via the
Amazon and the Atlantic. In the highlands, however, the
conditions are more suitable. rubber and mahogany trees.
Most of the logging is used on the domestic market for fuel,
furniture and as building material and wood pulp.
Peru had the largest catch in the world in 1969
(9,223,500 tonnes), but overfishing and unfavorable current
conditions almost led to a breakdown in fishing in the early
1970s. Catches were low, but relatively stable throughout
the 1980s, and then increased again. In 1994 over 11 million
tonnes of fish were fished, but after that time fishing has
declined somewhat. Most of the catches are the anchovy
fish anchoveta, which is used for herring oil and
herring flour, the rest are essentially sardines and
mackerel species. The fishing industry was nationalized in
1973, but partially privatized in 1976, and ended up largely
to foreign hands.
Catch quantities are largely dependent on offshore
coastal conditions where cold water emerges from deeper
water layers and contributes to increased nutrient base and
more fish. The El Niño ocean current has periodically
destroyed fisheries by hot nutrient-poor water displacing
the cold nutrient-rich water.
Peru has been known as a mineral-rich area ever since the
colonial era, and it is one of the world's largest exporters
of a number of minerals, including copper, zinc, silver,
lead, tin and iron. Bergverk employed 1.5% of the working
population (2002) and contributed approx. 3% of GDP. It is
expected that the industry, which is dominated by a few
large companies, will increase in size as foreign investors
become more established.
Most of the mines are located in the Andes Mountains
(between 3000-5000 meters). Here iron, copper, lead, zinc,
silver, antimony, molybdenum, etc. are produced. Important
mining towns are Cerro de Pasco in the central Andes,
Cuajone and Toquepala in the southern mountain areas and
Marcona near the coast in the south.
Peru has long been producing oil in the northern coastal
areas, near the border with Ecuador, and natural gas is
being extracted in the east. New petroleum fields were later
found. Natural gas is transported by pipeline across the
Andes to the coast.
The electricity supply, which is state-run, has been
significantly expanded in recent years. Part of the
development has been done with the help of foreign aid, i.a.
from Japan. In 1990, only 45 percent of the population had
access to electricity, but thanks to a comprehensive
government program to electrify the countryside, more than
96 percent of the country is now electrified. Today, the
cities have a relatively well-developed electricity grid,
but in a number of poor areas the population can still not
enjoy access to electricity. On a national basis, it is
estimated that this applies to about 20 per cent of the
population. About half of the electricity production comes
Peru's industry is largely based on processing of the
country's natural resources, and employs approx. 10% of the
country's workforce and contributed 24% of GDP in 2002.
Almost all industrial production is concentrated in the
Lima-Callao area, which includes has large motor vehicle
assembly plants and a versatile consumer goods industry.
Several of the largest companies in the country process
minerals, among others. copper, lead and zinc smelters, and
Chimbote in the north has an important iron and steel plant.
In addition, there are petrochemicals, foodstuffs and
textiles. Several herring flour mills are concentrated along
the central coastal zone north and south of Lima.
Peru, especially since 1991, has had a deficit in the
trade and balance of payments abroad. In 2002, the deficit
was 2%. The main export goods are copper (18%), zinc, silver
and fishmeal. Agriculture's most important export goods are
coffee and cotton. Imports consisted, among other things, of
of machinery and transport equipment, food and chemicals.
Peru is considered the world's largest exporter of cocaine
(processed into cocaine). The scope is somewhat uncertain,
but it is estimated to have greater value than total legal
exports. The United States is the largest recipient of the
Most important trading partner is the United States with
about 1/4 of both imports and
exports. Other important trading countries are Japan,
Brazil, Argentina, China and Germany.
Transport and Communications
The most important road traffic corps is the Pan-American
Highway (2954 km in Peru), which runs along the coast from
north to south and has cross connections with inland. In
addition, there are two main railways, one in the south and
one in the central parts of the country. Both go from the
coast to the inland over the Andes. Especially the central
train, which runs from Lima, is widely used for ore
transport. The course is also the highest in the world,
crossing the Andes at an altitude of 4817 meters. The
Mollendo-Cuzco railway in the south is connected to the
railway network in Bolivia via boat routes on Lake Titicaca.
The domestic routes are well developed, and Lima-Callao
has an international airport. Callao is the main port city,
while Talara in the north has large petroleum exports, San
Nicolás is the iron ore port and Mollendo – Matarani in the
southern copper port and the port city of Bolivia. Peru has
a smaller coastal shipping fleet and some domestic traffic
on the Amazon, where Iquitos is the river port.