By John Kim, The Korea Post reporter
Ambassador Albergo Necco Tello of Peru in Seoul said, “One of the biggest opportunities that we can offer international investors is participation in infrastructure projects and Peru has been catching up a lot over the past few decades in terms of economic growth as it has been one of the best performing economies in Latin America.”
Ambassador Tello made the statement at an interview with The Korea Post media the Grand Hyatt Seoul on Sept. 27, 2017.
Then he stated that Peru has reached the point where improvement of infrastructure is much needed in order to boost productivity and sustain long-term GDP growth and that, thus, for foreign investors it is a great opportunity to participate in long-term economic growth projects by investing in the infrastructure development of Peru. Excerpts from the interview follow:
Question: What kind of businesses are best for investment in Peru?
Answer: As you know, the Peruvian economy is an emerging one. We face many challenges in terms of development, but at the same time there are also many opportunities.
One of the biggest opportunities that we can offer international investors is participation in infrastructure projects. Peru has been catching up a lot over the past few decades in terms of economic growth. It has been one of the best performing economies in Latin America.
I believe we have reached the point where improvement of infrastructure is much needed in order to boost productivity and sustain long-term GDP growth. Thus, for foreign investors it is a great opportunity to participate in long-term economic growth projects by investing in our infrastructure development.
We have large-scale as well as smaller infrastructure projects that are attracting certain interest from the international community. We welcome all investments from all sources. Korean investors, of course, are much welcome in our country.
Q: What are the relevant regulations of the Peruvian Government?
A: Something that you should probably bear in mind is that in terms of foreign investments and capital flows the Peruvian economy is open. There are absolutely no restriction on capital inflows and no restrictions on capital outflows. There are no restrictions on dividends, no restrictions on asset sales or the currency that companies take out of the country.
Companies are completely free, there are no barriers. There is an absolute equality in terms of capital treatment, so for Peruvian law there is no distinction between local and foreign capital. They are all treated the same way – they have the same rights and they have the same obligations. There are few restrictions on investments related to national security when it comes to projects located near national borders etc., but there are only few of those.
Other than that, there are no distinctions between local and foreign investors whatsoever. This fact proves Peruvian framework to be very friendly and very easy to accommodate for foreign investors. As a company, you don't really need special permissions from the Government to conduct business in Peru. The company just needs to come to Peru, get proper legal advice and find an appropriate legal entity to use. It is not even mandatory to register with Central Bank or other financial entities in order to drive money into the country. Thus, it is very easy to enter Peru and invest.
Q: Which Korean companies are most active in Peru?
A: We are seeing a lot of interest from Korean companies in our metro line projects. I believe they are involved in one of those projects. Certainly, there is Korean involvement in the Peruvian economy, but I strongly believe there is room for more. There is a great interest from the Peruvian society to attract more Korean investments in our country. We are happy to have existing Korean investments in our country and we also feel very enthusiastic about having more.
Q: Is there any problem in Peru which prospective Korean investors should know?
A: There is an issue with public security that our Government is actively trying to address. Public investment in this area has been increasing. There are certainly great efforts and developments done in that area, although there is still much to do. The lack of infrastructure itself creates all sorts of social pressure – public demands increased Government presence.
Thus, infrastructure development is also a way not only to increase GDP growth, but also to improve the quality of life and ease the social pressure and address the demands of the public. Most of the social issues are related to mining projects or land expropriations. Those issues are being dealt with actively – the Government has set several legal initiatives to pass legislation in order to facilitate agreements with the communities and secure land acquisition.
It is a sort of an iterative problem, because on one hand we have social pressure deriving from the valid demand and expectations to see economic growth, but also at the same time economic growth will certainly ease that pressure. We need to address this problem by solving the infrastructure issue. I believe this would be the key to reduce social problems.