Globalization Peru 2007

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An overview of the situation of Peru about Globalization. Include an actual situation of the different sectors and recommendations (2007). References included.

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Globalization Peru 2007

  1. 1. Globalization in Peru A way out of the Sub-Development By Ing. MA. María Andrea Vásquez Castillo
  2. 2. Content <ul><li>Introduction </li></ul><ul><li>Definition of Globalization </li></ul><ul><li>Characteristicts – Positive and Negative effects. </li></ul><ul><li>Influence in Peru </li></ul><ul><ul><li>4.1 Basic Data </li></ul></ul><ul><ul><li>4.2 Political context </li></ul></ul><ul><ul><li>4.3 Technology </li></ul></ul><ul><ul><li>4.4 Agriculture </li></ul></ul><ul><ul><li>4.5 Mining and Energy </li></ul></ul><ul><ul><li>4.6 Textile </li></ul></ul><ul><ul><li>4.7 Tourismous </li></ul></ul><ul><ul><li>4.8 Fishing </li></ul></ul><ul><ul><li>4.9 Transport </li></ul></ul><ul><ul><ul><li>Inter-Oceanic Peru-Brazil-Bolivia Highway </li></ul></ul></ul><ul><ul><li>4.10 Peru-Germany relations </li></ul></ul><ul><ul><li>4.11 Peru: ready to the Globalization </li></ul></ul><ul><li>Recomendations </li></ul>
  3. 3. I. Introduction <ul><li>Globalization, everybody knows this word but not everybody knows ist meaning. </li></ul><ul><li>It lives between us since many time ago. </li></ul><ul><li>Globalization represents for the third world a way out of Sub-development. </li></ul>
  4. 4. II. Definition <ul><li>The worldwide process of homogenizing prices, products, wages, rates of interest and profits. [1] [1] Shariff,Ismail. GLOBAL ECONOMIC INTEGRATION: PROSPECTS AND PROBLEMS. </li></ul><ul><li>The growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology. (IMF- International Monetary Fund) </li></ul>
  5. 5. III. Characteristic <ul><li>Positive effects.- </li></ul><ul><li>Engine of commerce </li></ul><ul><li>Improving of standard living to developing countries. </li></ul><ul><li>Negative effects.- </li></ul><ul><li>Cultural assimilation from strong countries </li></ul><ul><li>Inhibition of authentic local community, ecology and cultures. </li></ul>
  6. 6. IV. Influence of the Globalization in Peru. <ul><li>Basic Data </li></ul><ul><li>Surface area: 1,285,216 km² </li></ul><ul><li>Capital: Lima </li></ul><ul><li>Languages: Spanish, Qechua, Aymara </li></ul><ul><li>Population: 27,9 million </li></ul><ul><li>GDP: 79,4 Mrd. US$ (12/2005) </li></ul><ul><li>GDP per head: 2.481 US$ (12/2005) </li></ul><ul><li>GDP growth rate : 6,6 % (January- June 2006) </li></ul><ul><li>Unemployment rate : 9,6% (Lima, 12/2005) </li></ul><ul><li>External debt : 26,0 Mrd. US$ (03/2006) </li></ul><ul><li>Currency reserves : 14,5 Mrd. US$ (03/2006) </li></ul><ul><li>Import (cif): 12,5 Mrd. US$ </li></ul><ul><li>From Germany: 0,40 Mrd. US$ </li></ul><ul><li>Export (fob): 17,0 Mrd. US$ </li></ul><ul><li>To Germany: 0,52 Mrd. US$ </li></ul><ul><li>Inflation: 2.5 (2006) </li></ul><ul><li>President of the Republic : Alan García </li></ul>
  7. 7. <ul><li>Geographical position: </li></ul><ul><ul><ul><li>Excellent position at the centre of South America </li></ul></ul></ul><ul><ul><ul><li>Easy access to the markets of South-East Asiatic and USA </li></ul></ul></ul><ul><ul><ul><li>Access to the markets of the Asia Pacific Economic Cooperation (APEC) integrated by 21 South-East Asiatic economies. </li></ul></ul></ul><ul><ul><ul><li>Access to the market of Andean Community of Nations (CAN), with more than 100 millions people and GDP in average of 250 billions dollars. </li></ul></ul></ul>
  8. 8. Political Context <ul><li>Internal Politics </li></ul><ul><ul><li>International relations </li></ul></ul><ul><ul><ul><li>Bilateral trade-promotion agreement (TPA) with the US ratified in late June. </li></ul></ul></ul><ul><ul><ul><li>Process of negotiating an FTA with Singapore </li></ul></ul></ul><ul><ul><ul><li>Peru-Chile Economic Complementation Agreement. </li></ul></ul></ul><ul><ul><ul><li>Peru is a member of the Andean Community . </li></ul></ul></ul><ul><ul><ul><li>Peru is in favour of an Association Agreement between the EU and the CAN </li></ul></ul></ul>
  9. 9. <ul><li>Economical Situation </li></ul><ul><ul><li>Accumulated growth Jan-Jun 2006 was 6.6% </li></ul></ul><ul><ul><li>Jul-Dec 2006 the most dynamic component was private investment. </li></ul></ul><ul><ul><li>Mining companies in Peru will pay a voluntary contribution of about US S 770 million to a social fund will administrate and manage social projects. [1] </li></ul></ul><ul><ul><li>[1] http:// ec.europa.eu/comm/external_relations/peru/intro/index.htm The EU's relations with Peru, 26/12/2006, 17:17h </li></ul></ul>
  10. 10. Technology sector <ul><li>Import </li></ul><ul><ul><li>Liquefaction of gas and mining industry </li></ul></ul><ul><ul><li>Textile industry and food manufacturers need modern plants for their export production </li></ul></ul><ul><ul><li>Transport and Communication sectors </li></ul></ul><ul><ul><li>Trade, commercial and service sector </li></ul></ul><ul><ul><li>Building of hydro-electric power plants and gas power stations. </li></ul></ul><ul><li>Export </li></ul><ul><ul><li>Small manufacturing </li></ul></ul>
  11. 11. Agriculture sector <ul><li>The agricultural sector represents only 7.5% of GDP. </li></ul><ul><li>400 new farming products are exportable </li></ul><ul><li>Main exporter of asparagus and paprika around the world </li></ul><ul><li>Farming products exports have grown thanks external factors ATPA (Andean Trade Preferential Act) y ATPDEA (Andean Trade Promotion and Drug Eradication Act) with USA and SPG (systems of generalized preferences) with EU. </li></ul><ul><li>El Niño phenomenon , strong raining and floods, making disasters in the rice and cereals production and lasting droughts in the south. </li></ul>
  12. 12. Mining and Energy <ul><li>Energy </li></ul><ul><li>08/2004, Peru inaugurated the Camisea natural gas project. </li></ul><ul><li>In a second phase, liquefied natural gas (LNG) will be exported to the west coast of the United States and Mexico. </li></ul><ul><li>Gas and condensates from Camisea are around equivalent 2.4 billion barrels of oil. </li></ul>
  13. 13. Mining and Energy (II) <ul><li>Mining </li></ul><ul><li>Peru is the world’s second-largest producer of silver. </li></ul><ul><li>sixth-largest producer of gold and copper </li></ul><ul><li>a significant source of the world’s zinc and lead </li></ul><ul><li>Mineral exports have most significant portion of Peru’s export revenue. </li></ul><ul><li>around 50% of total earnings in 1998 to 2005. [1] </li></ul><ul><li>Counts at present altogether 276 mining industry projects with an investment volume of 10 Mrd billion US$. [2] </li></ul><ul><li>[1] http://www.state.gov/r/pa/ei/bgn/35762.htm U.S. Departament of State, 29/12/2006, 2:39 h </li></ul><ul><li>[2] http://www.bfai.de/DE/Navigation/Fachfunktionalitaeten/Matrixsuche/sucheMatrixGT.html Branche kompakt - Maschinen- und Anlagenbau - Peru, 2006 , 29/12/2006, 16:16h </li></ul>
  14. 14. Textile sector <ul><li>Cloth exports to the United States went from US$147 million in 1996 to US$390 million in 2002, with a 160% increase in six years . </li></ul><ul><li>This increment was achieved before the approval of the Andean Trade Promotion and Drug Erradication (ATPDEA) law in the U.S.A. </li></ul><ul><li>Total export of Peruvian textiles and clothes reached from US$ 1.092 Million in 2004 to 1.274 Millions in 2005. </li></ul>
  15. 15. Tourisms sector <ul><li>UNESCO has inscribed on the World Heritage list the following properties: [1] </li></ul><ul><li>   Cultural </li></ul><ul><li>Chan Chan Archaeological zone (1986) </li></ul><ul><li>Chavin (Archaeological site) (1985) </li></ul><ul><li>City of Cuzco (1983) </li></ul><ul><li>Historic Centre of Lima (1988) </li></ul><ul><li>Historical Centre of Arequipa city (2000) </li></ul><ul><li>Lines and Geoglyphs of Nasca and Pampas de Jumana (1994) </li></ul><ul><li>   Natural </li></ul><ul><li>Huascarán National Park (1985) </li></ul><ul><li>Manú National Park (1987) </li></ul><ul><li>   Mixte </li></ul><ul><li>Historic Sanctuary of Machu Picchu (1983) </li></ul><ul><li>Río Abiseo National Park (1990) </li></ul><ul><li>They make Peru a country with big opportunities for development of tourism investment. </li></ul><ul><li>[1] http://whc.unesco.org/en/statesparties/pe Peru, 30/12/2006, 17:33 </li></ul>
  16. 16. Fishing sector <ul><li>Peru is the most important fishmeal producer in the world . </li></ul><ul><li>The total export of Peruvian fishing reached from US$ 284 Million in 2004 to 331 Millions in 2005. [1] </li></ul><ul><li>Peru doesn’t have many influence with the international prices, fishmeal represents only 10% from world-wide food balanced producers for animals, and could be replaced by soya. </li></ul><ul><li>Problems due to the ‚Informality‘ </li></ul><ul><li>[1] http://www.bfai.de/nsc_true/DE/Navigation/Fachfunktionalitaeten/Matrixsuche/sucheMatrixGT.html Wirtschaftsdaten kompakt - Peru , 29/12/2006 23:40h </li></ul>
  17. 17. Transport sector <ul><li>Airports </li></ul><ul><li>36 airports Lima, Arequipa, Chiclayo, Pisco, Pucallpa,Iquitos, Cusco, Trujillo and Tacna </li></ul><ul><li>Ports </li></ul><ul><li>Sea Port Callao (Lima), Paita (Piura), Salaverry (La Libertad), Chimbote (Ancash),San Martín (Ica), Ilo (Moquegua) and privates. </li></ul><ul><li>Roads </li></ul><ul><li>78,000 km of roads, </li></ul><ul><li>Pan-American Highway (North and South) </li></ul><ul><li>Marginal Jungle Highway links up the towns in the northern jungle with the south, near the Bolivian border. </li></ul><ul><li>Central Highway starts out in Lima and runs up to the central highlands. </li></ul>
  18. 18. Transport sector (II) <ul><li>Roads </li></ul><ul><li>Inter-Oceanic Highway Peru-Brazil-Bolivia </li></ul>
  19. 19. Transport sector (III) <ul><ul><li>Objectives </li></ul></ul><ul><ul><li>Transfer of Brazilian goods to the Pacific coast (and to Asian markets), and of Asian products to the Atlantic coast (and to US, European, and Brazilian markets) </li></ul></ul><ul><ul><li>Access for Peruvian products in Brazilian markets, resulting in an annual increase of 1.5 percent of Gross Domestic Product. [1] [1] http://www.biceca.org//en/Article.28.aspx#notes The Brazil-Peru Transoceanic Highway, 29/12/2006, 18:10h </li></ul></ul>
  20. 20. Social and Environmental Impacts <ul><li>Environmental </li></ul><ul><li>Forest degradation caused by unregulated, non-  renewable extraction. </li></ul><ul><li>Illegal hunting for meat, leather, and furs, and trafficking of live animals in particular. </li></ul><ul><li>Chemical pollution of soil and water caused by the abuse of agro-chemicals or mining. </li></ul><ul><li>Loss of biodiversity and extinction or rarifying of species. </li></ul><ul><li>Social </li></ul><ul><li>Displacement of indigenous populations, invasions of other indigenous territories, and Inter.-group conflicts. </li></ul><ul><li>Trafficking of drugs, arms, wild animals and other general smuggling. </li></ul><ul><li>Spread of shantytowns (“barriadas” or “favelas”). </li></ul><ul><li>Increase in female and child prostitution. </li></ul><ul><li>Loss of traditional cultural values. </li></ul>
  21. 21. Peruvian-German relations <ul><li>Political relations </li></ul><ul><li>Bilateral political relations between Germany and Peru under the government of Alejandro Toledo, in office since July 2001 </li></ul><ul><li>In development cooperation Germany is assisting Peru in the pressing task of reducing poverty. </li></ul>
  22. 22. Peruvian-German relations <ul><li>Economical relations </li></ul>Source: Statistisches Bundesamt, Wiesbaden This report was concluded in the middle of June 2006. 262.915 221.591 520.113 374.768 Total 1.523 1.654 2.163 809 other goods and - procedures 20.105 17.617 15.388 11.694 Finished products 126.415 106.826 4.146 960 Machines and vehicles 48.964 34.997 107.548 75.427 Vorerzeugnisse 57.300 53.022 5.926 5.793 Chemical products 139 73 216 178 Animal/vegetable oils 961 1.430 0 0 Fuels/technical oils 6.249 5.027 166.911 109.594 Raw materials 285 195 83 29 Beverages/tobacco 974 750 217.732 170.284 Food/living animals Export 2005 Export 2004 Import 2005 Import 2004 Goods Foreign trade of Germany with Peru (in 1000 € )
  23. 23. Graphic 1: Import Germany from Peru in 2005 Graphic 2: Exports Germany to Peru 2005
  24. 24. Peru: ready to the Globalization <ul><li>Investments Protection Agreements </li></ul><ul><li>Expansion of Marketplaces </li></ul><ul><li>International Arbitration </li></ul>
  25. 25. V. Recomendations <ul><li>In agricultural sector , more support from the government to the small producers. </li></ul><ul><li>Preventive measures against El Niño phenomenon, in order to protect culture fields </li></ul><ul><li>In energy sector , more attention to the quality control of natural gas projects in order to prevent fails in pipelines and protect the environment. </li></ul><ul><li>In mining sector , control of pollutions to mining companies, in order to protect culture fields, water resources and population around. </li></ul><ul><li>In textile sector , more support from the government to small producer </li></ul><ul><li>Strong fight against contraband and second hand cloths import </li></ul><ul><li>Create laws in order to protect Peruvian producers against Asia cloths import with low prices. </li></ul><ul><li>In fishing sector , the target is to develop its fishing sector beyond the anchoveta, especially products for exporting like prawns, shells and others. </li></ul><ul><li>In transport sector , make a review of the EIA for the Inter-Oceanic highway, in order to prevent disasters socio-environmental. </li></ul>
  26. 26. Thank you !

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