1. PERÚ
One of the Most Attractive Investment Destinations
Luis M. Valdivieso
President of the Private Pension Fund Administrators Asociation (AAFP)
Director inPERÚ
London, April 2012
2. I. What makes Peru attractive for investment?
II. Market perception and the investors’ response to
such investment environment
III. Areas in need of improvement
IV. Risks and mitigating factors
2
5. Growth has been driven by rising investment and labor productivity and
supportive investors and consumers’ confidence
1.2 1.2
3.5
1.6
0.5
2.3
1.5
0.5
0.9 0.9
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Peru Colombia Chile Brazil Mexico
1995-1999
2000-2009
5
Optimist Trend
Pesimist Trend
Consumer Confidence Index
Family Economic Situation
Investment Expectations 6 months
Investment rises
Investment falls
Source: Central Bank of Perú
Source: Central Bank of Perú
Inversión Bruta Fija: 2004-2011
(En porcentaje del PBI)
Source: Central Bank of Perú, Ministry of Economy and Finance
2.8 2.9 3.1 3.4 4.3 5.2 5.9 4.5
15.1 15.5 16.4
18.2
21.5 17.7
19.2
19.6
0
5
10
15
20
25
30
2004 2005 2006 2007 2008 2009 2010 2011
Private Investment Public Investment
6. 2. Peru’s growth potential is very promising
Countries that will grow on average above 6 per cent per annum in 2012-2013
Source: IMF – WEO 2011, except for Peru which is based on official government projections base.
6
7. ____________________
Source: MEF, BCRP, MINEN, and media
7
…total investment is expected to reach new highs, with very auspicious private
investment plans for 2011-2016
2.8 2.9 3.1 3.4 4.3 5.2 5.9 4.5 5.8 5.8
15.1 15.5 16.4
18.2
21.5
17.7
19.2
19.6
19.9 20.3
0
5
10
15
20
25
30
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Gross National Investment: 2004-2013
(% GDP)
Private Investment Public Investment
Source: Central Bank of Perú, Ministry
8. 3. Peru has recorded the lowest inflation in LA in the last decade
and is expected to keep it well under control
8
23.4
10.9
9.0 7.9 6.6 5.6 5.2 5.1 4.4 3.2 2.5
0
5
10
15
20
25
Venezuela
Argentina
Uruguay
Paraguay
Brazil
Bolivia
Ecuador
Colombia
Mexico
Chile
Peru
Consumer Prices Inflation
(Average annual rate 2001-2011)
Source: WEO Database - IMF
Annual percentage of average consumer prices are year-on-year changes
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Argentina Bolivia Brazil Chile Colombia Peru
9. Source: BCRP
4. Peru’s current account is sustained by sizable long-term private capital inflows, but its
trade account is sensitive to commodity price volatility and changes in external demand
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (*) 2013 (*)
-1.5
0.0
1.4
3.1
1.1
-3.7
0.2
-1.7
-1.3 -1.5 -1.8
3.00 3.30
4.10
4.50
9.10
7.50
6.05
7.99
6.45
4.74
5.59
Current Account Balance and Long Term Private Financing:
2003 – 2013 (% of GDP)
Trade Balance and Terms of Trade (US$ billions and index 1994=100)
0.9
3.0
5.3
9.0
8.5
2.6
6.0
6.7
9.3 9.1 10.0
0
20
40
60
80
100
120
140
160
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (*) 2013 (*)
9
10. To control the impact of price volatility on the exchange market, the Central Bank has
intervened occasionally without countering underlying market forces
80
90
100
110
120
130
140
150
-07
-08
r-08
-08
-08
t-08
-08
-09
r-09
-09
-09
t-09
-09
-10
r-10
-10
-10
t-10
-10
Exchange Rate Index
(December 2007=100)
Brasil Chile Peru Colombia Mexico
12/07 2/12
11. Net International Reserves and Foreign Exchange Position
(US$ billion)
11
NIR/Short-term external debt 6.5
NIR/ Liquidity (%) 92.9
NIR / GDP (%) 30.3
13 14 9 10
29
NIR / GDP: 2010 (in %)
4.6
1.0
2.3 2.9
5.6
NIR / Short–term external debt: 2010 (Number of times)
In the process, Peru has built a very strong external position, enhancing
its ability to confront external shocks
12. 12
Overall Balance of the Non-Financial Public Sector
(In percent of GDP)
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-2.3
-1.7
-1.1
-0.3
2.2
3.1
2.1
-1.9
-0.3
1.0 1.1
1.4
Surplus
Deficit
44.3
37.7
33
29.7
24.1
27.1
23.4 21.7 19.9 18.3
36.1
30.1
24.1
17.8
12.5 14.2
11.5
8.2
6.1
4.1
2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013*
Gross Debt Net Debt
*Forecast
5. Peru has demonstrated its commitment to fiscal discipline and a
prudent public debt management
Public Sector Debt (% of GDP)
13. Brazil Chile Colombia Mexico Peru
64.98
10.49
35.92
42.90
21.52
General Government Gross Debt (%GDP) - 2011
64.981
10.49
35.918
42.897
21.518
0
10
20
30
40
50
60
70
80
90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
%
General Government Gross Debt (% GDP) - 2011
Brazil Chile Colombia Mexico Peru
Debt indicators are quite favorable
14. 6. The Central bank has kept inflation under control through timely actions,
while supporting economic activity
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
ene-06
mar-06
may-06
jul-06
sep-06
nov-06
ene-07
mar-07
may-07
jul-07
sep-07
nov-07
ene-08
mar-08
may-08
jul-08
sep-08
nov-08
ene-09
mar-09
may-09
jul-09
sep-09
nov-09
ene-10
mar-10
may-10
jul-10
sep-10
nov-10
ene-11
mar-11
may-11
jul-11
sep-11
nov-11
ene-12
Tasa de interés de referencia del Banco Central
(En porcentaje)
4,25
14,1
25,0
00
05
10
15
20
25
30
35
Ene-06
May-06
Sep-06
Ene-07
May-07
Sep-07
Ene-08
May-08
Sep-08
Ene-09
May-09
Sep-09
Ene-10
May-10
Sep-10
Ene-11
May-11
Sep-11
Ene-12
Tasa de encaje en moneda nacional
(Como % de las obligaciones sujetas al encaje)
Medio Exigible
Marginal
%
38,2
55,0
20
25
30
35
40
45
50
55
60
Ene-06
Abr-06
Jul-06
Oct-06
Ene-07
Abr-07
Jul-07
Oct-07
Ene-08
Abr-08
Jul-08
Oct-08
Ene-09
Abr-09
Jul-09
Oct-09
Ene-10
Abr-10
Jul-10
Oct-10
Ene-11
Abr-11
Jul-11
Oct-11
Ene-12
Tasa de encaje en moneda extranjera
(Como % de las obligaciones sujetas al encaje)
Medio Exigible
Marginal
%
Central Bank policy rate (%)
Reserve Requirement Ratio: Domestic Currency
(% of liabilities subject to reserves)
Reserve Requirement Ratio: Foreign Currency
(% of liabilities subject to reserves)
Average
Marginal
Average
Marginal
15. …credit to the private sector has increased steadily in real terms
90
95
100
105
110
115
120
125
130
135
140
3Q-08 1Q-09 3Q-09 1Q-10 3Q-10
Credit to the private sector
(2008.Q3=100)
Brazil Colombia
Peru 1/ Chile 2/
1/ In Peru includes loans made by banks branches
CRÉDITOALSECTORPRIVADO
Tasasdevariaciónanual
feb-2011 mar-2011 abr-2011 may-2011 jun-2011 jul-2011 ago-2011 sep-2011 oct-2011 nov-2011 dic-2011 ene-2012 feb-2012
11,6
13,4
14,9
16,2 17,2 17,3
19,4 20,2 19,9 21,0 20,9 20,8 21,2 22,0 22,5 21,7 20,6 21,5 20,4 19,6 19,0 19,0 19,1 18,0
mar10abr10may10jun10 jul10 ago10sep10oct10nov10 dic10 ene11feb11mar11abr11may11jun11 jul11 ago11sep11oct11nov11 dic11 ene12feb12
Growth in Credit to the Private Sector (in
percent)
16. Credit Cards per capita (1)
7. Peru’s banking system is still small compared to other Latin American
countries
Banking Depth at retail level
(Mortgage and Consumption loans/GDP)
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
BRASIL ARGENTINA CHILE MÉXICO PERÚ
1.52
1.15
0.63
0.48
0.35
Bank offices per 100,000 persons
16
Sources: SBS - PERÚ: indicadores de inclusión financiera de los sistemas financiero, de seguros y de pensiones
Sources: FELEBAN – Boletín Económico a Diciembre 2010 Sources: SBS - II Congreso latinoamericano de educación financiera
Banking Depth (Deposits/GDP in %)
17. 17
Non Performing Loans in % of Total Loans
Source: SBS y BCRP.
…but it is quite sound, progressively becoming less dollarized, and it is very well
regulated and supervised
73 74 77 79 82 80 79 77 74 71 67 60 57 52 46 44
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Dolarization of credit to the private sector
(%)
Dollarization of Credit to the Private Sector and Liquidity (in percent)
Credir
Liquidity
-
0.5
1.0
1.5
2.0
2.5
3.0
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
dic-94
jun-95
dic-95
jun-96
dic-96
jun-97
dic-97
jun-98
dic-98
jun-99
dic-99
jun-00
dic-00
jun-01
dic-01
jun-02
dic-02
jun-03
dic-03
jun-04
dic-04
jun-05
dic-05
jun-06
dic-06
jun-07
dic-07
jun-08
dic-08
jun-09
dic-09
jun-10
dic-10
jun-11
dic-11
Profitability Indicators
Return on Equity Return on Assets
1.47
0
2
4
6
8
10
12
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
19. EFTA
New Zealand
South AfricaECA Plus
Existing FTA agreements
Planned FTA negotiations
Mexico: ECA 8
A P E C
W T O
singapore
European
Union
Korea
Japan
Australia
Central
America
CARICOM
India
Morocco
RussiaRussia
China
Thailand
China
Chile: ECA 38
United States
Canada
MERCOSUR ECA 58
Andean
Community
9. Peru has a very open economy
CHILE
CANADA
USA
ANDEAN
COMMUNITY MERCOSUR
CHINA
EUROPEAN
UNION
EFTA
KOREA
THAILAND
MEXICO
PANAMA, COSTA RICA,
EL SALVADOR &
HONDURAS
NEW ZELAND
AUSTRALIA
MALAYSIA/B
RUNEI
JAPAN
VIETNAM
SOUTH AFRICA
INDIA
RUSSIA
TURKEY
MOROCCO
VENEZUELA
Negotiated FTA agreements
Current or recently concluded FTA negotiations
WTO
APEC
PERU
19
20. Australia
China*
Korea
Malaysia
Singapore*
Thailand
Japan Argentina
Bolivia
Chile*
Colombia
Ecuador
Paraguay
Venezuela
Cuba
El Salvador
Germany
Belgium and Luxembourg
Denmark
Spain
Finland
France
Netherlands
Italy
Norway
Portugal
United Kingdom
Czech Republic
Romania
Sweden
Switzerland
Canada*
United States*
… open trade policy has been complemented with investment
agreements
It also has existing agreements to avoid double taxation with Brazil, Chile and
Canada and has scheduled negotiations with 14 countries.
* FTA
21. 10. Peru has a stable and predictable legal framework for
investment
The State guarantees:
Non discriminatory treatment between national and foreign investors
Unrestricted access to most economic sectors
Free transfer of capital and free access to the most favorable exchange rate available in the market
Free competition
Constitutional Guarantees for Private Property
Freedom to purchase stocks from locals
Freedom to access internal and foreign credit
Freedom to pay and remit royalties and dividends
The State also extends stability agreements 1/ on:
The income tax rules applicable to dividends.
The right of recruitment regimes.
The regimes for the promotion of exports.
The Income Tax Regime,
The State also offers a special regime on the value added tax, which allows for a tax
reimbursement during the pre=production stage of the project (minimum 2-year term).
Peru is adherent to the OECD Declaration on International Investment and Multinational
Enterprises and a member of the ICSID and MIGA
Source:s: Constitutional provisions, “Law for the Promotion of Foreign Investment”, Legislative Decree N° 662, “Framework Law for Private Investment Growth”,
Legislative Decree N° 757, “Law for the Promotion of Private Investment in Infrastructure and Public Service Works”, Approved by Supreme Decree N° 059-96-PCM
1/ For FDI of at least US$ 5 MM in any economic sectors, except for hydrocarbon and mining sectors where the minimum is US$10 MM.21
23. Rating agencies granted an investment grade to Peru in 2008
Source: Bloomberg, March 2012
PAIS S&P FITCH MOODY'S
Chile A+ A+ Aa3
México BBB BBB Baa1
Brasil BBB BBB Baa2
Perú BBB BBB Baa3
Colombia BBB- BBB- Baa3
Bolivia B+ B+ B1
Venezuela B+ B+ B2
Argentina Bu B B3
Ecuador B- B- Caa2
23
24. Various surveys indicate that Peru is perceived as one
among the best countries in the region for investment
5.7
5.7
5.8
5.8
5.8
5.9
6.1
6.1
6.2
6.2
6.2
6.4
6.5
6.6
6.7
Sweden
Bahrain
Korea,Rep
Israel
Slovak Republic
Canada
Japan
Chile
Panama
Philipphines
China
Singapore
Malaysa
Thailand
Peru
Aggregate macroprudential indicator*
*This is the aggregate measure of macroeconomic soundness
based on real GDP growth, deposit interest rate, inflation
volatility, and inflation level
Source: WEF - Financial Development Report 2011
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
3.1
3.2
4.0
4.1
4.2
4.2
4.5
4.6
4.8
5.5
5.6
5.8
Argentina
Venezuela
Guatemala
Mexico
Brazil
Dominic. Rep.
Bolivia
El Salvador
Uruguay
Chile
Colombia
Peru
Government Readiness for private
investment in infraestructure
Source: WEF - Fi El Benchmarking National Attractiveness for Private
Investment in Latin american infraestructure 2007
1
2
3
4
5
6
7
8
9
10
11
12
Rank
24
Perú
18%
Uruguay, 2%
Argentina
8%
Brasil,
41%
Chile
13%
Colombia
14%
México,
2%
Paraguay
1%
Otros
1%
Source: PWC 2010. (200 CEOs in LA survey)
25. 25
PERU: Ranking on the ease of doing business 2006-2011
Ranking improvement 2006-2011
0
10
20
30
40
50
60
70
80
2006 2007 2008 2009 2010 2011 2012
78
65
53
65
46
39 41
-30
-20
-10
0
10
20
30
40
37
34
18
9
-4
-15
-20
0 20 40 60 80 100 120
Enforcing Contracts
Resolving Insolvency
Getting Electricity
Starting a Business
Getting Credit
Protecting Investors
111
101
100
85
82
56
55
41
24
22
17
0
20
40
60
80
100
120
140
160
Peru Chile Mexico Brazil Colombia
Peru has been escalating rapidly the ranks of the Doing Business Survey
26. The market for long-term sovereign bond has also been signaling a
perceived lower country risk
12.3
12.9
5.6
6.8
7.8
8.2 8.3 8.3
3.55
4.2
4.64
5.45
5.96 6.21 6.28 6.46
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
5 10 15 20 25 30 35 40
Yield(%)
Time to maturity (years)
Peruvian Tresasury Bond's Yield Curve
Jun 2001
May 2006
Feb 2012
26
27. Source: PROINVERSIÓN
FDI'S STOCK IN PERU(US$ million)
FDI'S STOCK PER COUNTRY (%()
…it is therefore not surprising that Peru keeps attracting large FDI inflows
27
0
5,000
10,000
15,000
20,000
25,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
MINERÍA
26%
FINANZAS
20%
COMUNICACI
ONES
18%
INDUSTRIA
15%
ENERGÍA
14%
COMERCIO
4%
OTROS
3%
FDI'S STOCK BY SECTOR
ESPAÑA
20%
REINO UNIDO
20%
EE.UU.
14%
PAÍSES BAJOS
7%
CHILE
6%
COLOMBIA
5%
BRASIL
5%
OTROS
23%
28. Several multinational companies are now
operating in Peru
Shougang Corp
Sapet
Marubeni
Honda
SK
LS Nikko
Sumitomo
Matsushita
P&O Dover
China Fishery Group
Chinalco
Zijin Mining
Nippon Mining
Mitsui Mining
Teck Cominco
Quebecor
Barrick
Scotiabank
Firth Ind.
Newcrest
BHP
Chariot
Amcor
Downing Teal
Orica
Rio Tinto
Grupo Slim
Grupo Mexico
Grupo Bimbo
Zeta Gas
Minas Peñoles
Banco Azteca
Elektra
Café Britt
Techint
Pluspetrol
Odebrecht
Petrobras
AmBev
Gerdau
Votorantim
Vale
Grupo ISA
Falabella
Ripley
CENCOSUD
ENAP
LAN
• Hunt Oil
• Nextel
• Citibank
• Phelps Dodge
• Duke Energy
• Freeport McMoRan
• Procter & Gamble
• Kimberly Clark
• Coca Cola Comp.
• Chevron Corp.
• Cargill
• Kraft
• Sempra
• PSEG
• Newmont
• Doe Run
• Telefónica
• BBVA
• Endesa
• Repsol - YPF
• HSBC
• Flughafen Frankfurt
• Suez Group
• Xstrata
• Acea /Impregilo
• Messer
• Faber Castell
• Deutsche Bank
• Grupo Santander
• Grupo Fierro
• Ashmore
• SN Power
• Elecnor / Isolux
• Polysius
• OHL
• Orient Express
• Cimpor
Anglo American
Sonatrach
Gold Fields
Sab Miller
28
29. Large public projects have been granted in concession over
the last decade (US$10.3 billion)
____________________
Source: PROINVERSION
14 Concessions in Road Transportation Sector
(2002 – 2011)
US$ 2,360.9 MM in
investment commitments
19 Concessions in Energy Sector (1998 – 2011)
6 Concessions in Port Sector (1999 – 2011)
3 Concessions in Airport Sector (1999 – 2011)
US$ 4,597.3 MM in
investment commitments
US$ 1,743.5 MM in
investment commitments
US$ 1,622.6 MM in
investment commitments
29
31. There is certainly no room for complacency
PERU:
Fuente: World Economic Forum, The Global Competitiveness
Report 2011-2012
Innovation
Health and primary education
Institutions
Infrastructure
Higher education and training
Technological readiness
Business sophistication
Macroeconomic environment
Goods market efficiency
Market size
Labor market efficiency
Financial market development
Bottom of scale top of scale
38
43
48
50
52
65
69
77
88
95
97
113
31
32. The need is particularly significant in infrastructure
Source: World Economic Forum, The Global Competitiveness Report 2010-2011.
32
34. External Risks
Downside
• Weaker and more protracted than anticipated global recovery
• Lower commodity prices
• Sustained sharp increase in food an oil prices
• Higher volatility of capital inflows and reversal of in risk appetite
• Intensification of drug trafficking and associated violence
Upside
• Stronger, faster and more sustained than anticipated global recovery
• More favorable than expected terms of trade
• Higher inflows of FDI
Mitigating factors: strong NIR position, low external debt, flexible exchange
rate, and ample room for fiscal and monetary maneuver
34
35. Domestic Risks: Tilted to the Upside
Upside Risks
• Stronger than expected recovery of net exports
• Higher than anticipated private investment, especially into
PPP for infrastructure
• Continuation of the economic and social model
Downside risks
• Reversal of social development weakening social cohesion
in support of sustained growth
• Political risk
35
36. Social Risk
Sustained growth and poverty reduction are key in in mitigating social risk
URBAN EMPLOYMENT (% change)
URBAN EMPLOYMENT IN LATIN AMERICA
(% of population in working age)
42.7 42.4
47.5
48.4
54.8 54.3
52.2
48.6 48.7
44.5
39.3
36.2
34.8
30.4
80
90
100
110
120
130
140
150
160
170
30
35
40
45
50
55
60
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Pobreza PBI pér capita
POBREZA Y PBI PER CAPITA
POVERTY (% of population)
- - - GDP PER CAPITA (2003=100)
-1.9
0.0
1.7
2.7
4.5
7.2
8.3 8.3
1.3
4.2
5.4
2001 2003 2005 2007 2009 2011
-
1
-
1
-
5
0
Peru
Brazil
Ecuador
Chile
Latin America
Dom. Rep.
Honduras
Guatemala
Panama
Paraguay
Colombia
Costa Rica
Mexico
Latin America: Poverty Reduction 2005 -2009
(Change in percentage points)
36
0
10
20
30
40
50
60
70
Argentinab/
Brasil
Chileb/
Colombiab/
CostaRicac/
Ecuadorb/
Jamaicad/
Mexico
Panamáe/
Paraguayb/
Perúb/
Rep.Dominicanaf/
Uruguay
Venezuela(Rep.Bol.de)
54.4 53.1 53.2
57 56.4
53
54.9 56.4
59.1 57.9
64.5
47
58.9 59.1
55.2 53.6 55.5
58.4 57.8
51.6
54.5
56.6
59.8
57.5
64.4
48
60 58.9
2010
37. 55.6 55.2
50.3
51.1 50.9
51.7
49.0 49.1
48.1
2002 2003 2004 2005 2006 2007 2008 2009 2010
GINI INDEX - PERU
Source: World Bank Indicators
LATIN AMERICA (18 COUNTRIES): GINI INDEX
1990-2002, 2002-2008 AND 2008-2010
1990-2002 2002-2008 2008-2010
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of special
tabulations of data from household surveys conducted in the respective countries.
37
Social Risk
…the same goes for ensuring that income growth is equally distributed
38. Source: INEI, MINTRA
Social Risk
It is encouraing that income growth in Peru has been more pro-poor and decentralized, and as a result,
there is a rapidly growing emerging middle class
0 1000 2000 3000 4000 5000 6000
Quintil 1
Quintil 2
Nacional
Quintil 3
Quintil 4
Quintil 5
2010
2005
5.1
37.3
48.9
49.7
54.4
74.1
0 1000 2000 3000 4000 5000
Sierra
Selva
Costa
Nacional
Lima M.
2010
2005
38.1
48.9
47.5
85.2
59.8
Average Monthly Income by Household
(Current Nuevos Soles)
By RegionBy Quintile
38
39. 39
54.4 54.8
48.7
44.5
39.3
36.2 34.8
30.9
27.3
23.0 24.4
17.4 16.1 13.7 12.6 11.5 9.8 11.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
1991 2001 2005 2006 2007 2008 2009 2010 Goal
2015
Erradication of Extreme Poverty and Hunger
Total Poverty (% of Population with less than 2 US$)
Extreme Poverty (% of Population with less than 1 US$)
Net Rate of Primary Education Enrollment (%)
Literacy Rate (% of population between 15-24
years old)
Promote Gender Equality and Women's Autonomy
1.00
0.99 0.98
0.99 1.00
0.99
1.00 1.001.01
0.99
1.00
0.99
1.01
1.00
1.01
1.00
0.97
1.02 1.02
1.04 1.04
1.10
1.12
1.00
0.850
0.900
0.950
1.000
1.050
1.100
1.150
2004 2005 2006 2007 2008 2009 2010 Goal 2015
Primary Education (ratio of girls to boys attendance)
Seconadry Education (ratio of girls to boys attendance)
94.5
94.7
96.2
96.7 96.6
96.8
96.5
100
2004 2005 2006 2007 2008 2009 2010 Goal 2015
94.0
94.3
95.3 95.3
95.6
96.2
96.6
100
2004 2005 2006 2007 2008 2009 2010 Goal 2015
Social Risk
Progress achieved in addressing basic development needs has
also helped as a mitigating factor
40. 43.0
33.0
21.0 21.0 21.0 19.0 19.0 20.0 17.0 17.0
59.0
47.0
29.0 29.0 29.0 27.0 27.0 26.0 23.0 23.0
0.0
20.0
40.0
60.0
80.0
Base 1996 2000 2004 2005 2006 2007 2008 2009 2010 Goal 2015
Infant Mortality Rate Infant Mortality Rate (more than 5 years)
Reduction of Mortality in Infants below 5 years old
40
66.0 63.0 59.2
48.6 45.5 40.0
29.3 26.7
20.4
0.0
20.0
40.0
60.0
80.0
100.0
2002 2003 2004 2005 2006 2007 2008 2009 2010
PROPORTION OF RURAL POPULATION THAT USE SOLID COMBUSTIBLES LIKE CHARCOAL OR
WOOD TO COOK THEIR FOOD (PERCENTAGES)(2002-2009)
Social Risk
…a widespread set of social and environmental issues has been
addressed
41. Political Risk
Markets price in politically driven uncertainty relatively quickly
41
As of March 15,2012
Source Bloomberg, IPE
Cabinet change Dec. 11, 2011
Uncertainty during
election period
Political risk mitigating factors:
March-July 2011: Announcement of a new government program by President Ollanta´s party
Dec 2011: Renewal of cabinet members was well received