CADE 2010: News from Peru’s business executive conference

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CADE 2010: RURAL DEVELOPMENT

Peru needs to close gaps in urban and rural development, says IDB representative

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Fidel Jaramillo, representative of the Inter-American Development Bank in Peru, at the CADE conference in Urubamba. (Photo: Alberto Orbegoso/Andina)

A top priority for the Inter-American Development Bank in Peru is to help close the urban-rural development gaps, said Fidel Jaramillo, the bank’s representative in Peru.

“While in urban areas poverty rates are below 10 percent, in some rural regions are over 90 percent,” Jaramillo said in an interview with LivinginPeru.com. “If Peru wants to become a developed country, it has to close these gaps.”

The IDB’s strategy to support rural development includes ensuring environmental sustainability and preserving resources, particularly water, considering that the Peruvian economy is based on mining, hydrocarbon production and agriculture.

Last July, the IDB received the fastest and highest capital expansion in its history, from US $100 billion to 170 billion, increasing its annual lending capacity from US $8 billion to 12 billion. In Peru, IDB announced it plans to loan up to US $600 million for projects.

“The capital expansion will enable IDB’s work in the region in five thematic aspects: infrastructure development, fight against poverty, international integration and insertion, institutional development and adaptation to climate change,” said Jaramillo.

Jaramillo, who is from Ecuador, was recently appointed IDB representative in Peru. He served as reserve bank general manager and then as finance minister in Ecuador. For the past five years, he was the IDB’s chief economist for the Andean countries.

“Peru is my favorite country,” he said. “The first time I came here I was 17 and came as a backpacker. I came back many other times and I feel at home here. I am from Quito and I believe the Andean countries share a special magic.”

CADE 2010: SOCIAL CONFLICTS

Cusco Chamber of Commerce: Investors in Peru must collaborate with communities to succeed

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Carlos Milla, left, is president of the Cusco Chamber of Commerce.

“When you have prosperity next to poverty, two things can happen. Either you are intelligent and show solidarity and wealth gets distributed, or you maintain disparities until the situation explodes,” said Carlos Milla, president of the Chamber of Commerce of Cusco, in an interview with LivinginPeru.com.

Milla, who participated in the annual CADE, a convention of business executives in Peru, said that companies need to carefullt analyze any intervention in the rural and native communities. “Corporations should not believe that they have solved the issues because they have hired someone to manage community relations in isolation of the rest of the business or because they have gained some government warranties or special conditions through lobbying,” said Milla. “You have to design your whole project based on a proper understanding of the local community needs and culture,” he added.

Milla said the construction of the Interoceánica, a highway that will connect Peru and Brazil, is an example of a project that avoided social conflicts, “despite the project’s size,” he added. “They knew how to do things,” Milla said. “On the other hand, many energy and hotel development projects have had myriads of conflicts, because they ignored local demands.”

CADE 2010: HIGHER EDUCATION

Peru’s Cesar Vallejo University to open branches in Miami, Los Angeles

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Juan Manuel Pacheco, director of César Vallejo University, at the 2010 CADE. (Photo by Mario Sandoval)

César Vallejo University is in the works to open a university in Miami to serve Florida’s Latin American population, says the university’s director, Juan Manuel Pacheco, in an interview with LivinginPeru.com.

The university is also planning to open a second campus in Los Angeles as well as a Spanish language school in Shanghai.

Pacheco said that César Vallejo University started 19 years ago and has eight campuses, mainly in Northern Peru and Lima.

Offering 27 career paths, César Vallejo University has over 100,000 students, from which 60,000 are bachelor students, 28,000 are in the graduate program, and the rest participate in other courses and programs.

The director also highlighted that César Vallejo University is currently developing new career paths with greater technological content, based on what a university delegation learned in a recent visit to China.

The César Vallejo university consortium also includes two other universities, Señor de Sipán and Autónoma del Perú.

CADE 2010: CARS

Toyota executive in Peru predicts new car sales of 200,000 for 2014

Rafael Chang, director of Toyota in Peru, at a CADE lunch. (Photo by Mario Sandoval)

URUBAMBA–The sale of new cars in Peru will reach 120,000 sold by all manufacturers, said Rafael Chang, executive director of Toyota in Peru, in an interview with LivinginPeru.com. This represents a 1,000 percent increase in sales over the past ten years.

Chang explained that this growth is a consequence of Peru’s economic expansion and improvements in access to credit.

“In particular, this increase is a reflection of the growth of the middle class segment in Peru,” Chang said. He estimates that in 2014, new car sales in Peru will exceed 200,000 vehicles.

Despite this growth, Chang highlighted that the numbers are still small when compared to the sales of new cars in Chile, Argentina, Brazil and even Ecuador.

“Peru is among the last countries in the region that allows the import of used cars, despite their poor safety and environmental record,” remarked Chang.

Although the number of service stations supplying natural gas for transportation fuel is still limited, Chang sees a great potential for natural gas vehicle sales. Toyota already offers natural gas cars as an option for the Yaris model, said Chang.

Regarding new technologies, “Toyota believes that vehicles will evolve from hybrid to electric to hydrogen,” said Chang.

He mentioned that Toyota’s Prius hybrid vehicles are became available for sale in Peru last year and have had good acceptance thus far. With regards to the most advanced technologies, Chang hopes to soon bring exhibition vehicles to Peru.

CADE 2010: HOME ENERGY

Cálidda to connect 24,000 Lima homes to natural gas grid in 2011

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Ernesto Córdova, General Manager of Cálidda. (Photo: EnfoqueEconomico.tv)

Cálidda is expanding the connection of homes to the natural gas grid to Lima districts San Juan de Miraflores and Villa María del Triunfo.

It is expected to reach 24,000 new homes in 2011, said Ernesto Córdova, General Manager of Cálidda, in an interview with LivinginPeru.com.

Three years ago, Cálidda started connecting homes to the natural gas grid in Lima districts San Juan de Lurigancho and El Agustino at a rate of 500 homes per month.

In March, the government approved the price of natural gas for residential use. Since then, the connection rate has increased to 1,700 homes per month.

The current focus of Cálidda is to connect Lima homes in lower-income neighborhoods.

“For them, the 50 to 60 percent cost savings, which amount to approximately seven dollars, are significant,” said Córdova.

The Cálidda manager declared that despite the cost savings, there is still a need to develop a natural gas culture to increase demand.

“Lima residents need to be educated about the advantages of using natural gas,” said Córdova. “They need to know that it is the safest fuel and also that is the most environmentally friendly,” he added.

Cálidda has been present in Peru for the past six years. Three years ago, it became a joint venture of U.S.-based AEI and Colombia’s Promigas. Its initial focus was the development of a gas grid for industrial users. Now, 360 Lima industrial companies use natural gas.

In addition to targeting residential users, these days Cálidda is also expanding the use of natural gas as transportation fuel.

“Currently, 120 gas stations supply natural gas to over 100,000 natural gas vehicles,” said Córdova.

CADE 2010: THE 2011 ELECTION

Aráoz kicks off speeches by presidential candidates

Ar���¡oz kicks off speeches by presidential candidates at Peru CADE 2010
 Mercedes Aráoz in Urubamba Valley, Cusco, site of this year’s CADE in Peru. (Photo: Mario Sandoval)
 

On Thursday, Mercedes Aráoz, Apra’s governing party candidate, opened the participation of Peru’s presidential candidates at the 2010 Annual Business Leaders Convention, CADE for its acronym in Spanish. (See website here.)
 
Speaking as a panel member in the discussion about progress achieved by Peru thus far, Aráoz highlighted that as Peru’s president, she would work with heart and soul for the social and economic welfare of Peruvian citizens, focusing on improving the global and local competitiveness of Peruvian businesses and of Peru as a whole.
 
“Business leaders know my abilities and the results of my work for the benefit of our country,” said Aráoz. “However, I do not only need their confidence, but that of all Peruvians.”
 
She also mentioned that her technical team will be composed by independent and Apra party professionals.
 
Mercedes Aráoz also had the opportunity to mingle with the local people. Dressed in traditional Cusco clothes, she spoke with the local population. After shouting “Kausachun Cusco, Kausachun Urubamba” (long live Cusco, long live Urubamba), locals celebrated her words with loud cheers.
 
Today, presidential candidates Alejandro Toledo, Luis Castañeda, Ollanta Humala and Keiko Fujimori will speak at the convention, in that order.
 
From Nov. 11 to 13, CADE is taking place in Urubamba city, the heart of Cusco’s Sacred Valley. For the past years, Urubamba and surroundings have experienced an investment boom in the tourism sector. More than 1,000 CADE participants are enjoying the dozens of newly established luxury hotels and restaurants.

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