Living in Peru : your everyday companion

Chilean businesses worried about investments heading for Peru

Chilean Wood Corporation (Corma) and the Society for the Promotion of Manufacturing (Sofofa) showed their concern about the announcement made by the directory of Empresas CMPC, owned by Matte Group, that they will not build a paper plant in Chile due to high energy costs, transferring this investment to Peru, instead.

Corma’s president, Fernando Léniz, stated there are other internal problems in Chile besides the high electricity costs that are causing resentment in the business sector.

“Peru has a better labor environment and a better violence control. Chile is being affected by the idea that pressure groups can satisfy their demands through the illegality and violence”, said Léniz to the Chilean journal “El Mercurio”.

Andrés Concha, general secretary of Sofofa, has a similar opinion. He says that companies are considering several factors, such as stability and how the institutions work.

However, the president of the Confederation for Production and Commerce (CPC), Alfredo Ovalle had a different opinion. He ruled out that Chile had a business tendency to move its investment to other countries, such as Peru.

“We regret that Matte has taken this decision. We don’t think this is a tendency, but a reasonable decision especially when you have to think in long-term investments”, said Ovalle to the Chilean journal.

News source: ANDINA

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# Jet says :
10 May, 2008 [ 01:13 ]

This is actually quite common when countries open up their trade to eachother.  Business will go back and forth depending on economic conditions in each country.  I don't think Chile has anything to worry about there.

# it's all good says :
10 May, 2008 [ 06:50 ]

This is why I love free trade.  It will force governments to provide the proper infrastructure, safety and labor force to be competitive.  No hiding because companies can and will go across the border.

Fix your power problems Chile.  Peru fix your education.  Compete.

# CC says :
10 May, 2008 [ 11:54 ]

Please use your brains.

The reason they are going to Peru.
Cheap Labor

When you can pay Peruvians slave wages
for unskilled labor
why would you build a plant in Chile where
an educated populace demand a livable wage?

Case Closed

# Thanks says :
10 May, 2008 [ 15:16 ]

We'll take the jobs, and are happy to work.  Thanks Chile.  Keep them coming.  CC you can collect your livable unemployment check.

# sw33t says :
11 May, 2008 [ 08:05 ]

(When you can pay Peruvians slave wages for unskilled labor)

When there is more demand for labor, higher wages are paid. Chile has high wages because they have a consistently low unemployment. It is the law of supply and demand.

It looks like what destroyed Peru's economy decades ago is now affecting Chile, Ecuador, and Venezuela. I know of several major Ecuadorian companies that are also moving to Peru.

# Anonymous Dave says :
11 May, 2008 [ 09:53 ]

sw33t,

Peru's economy was destroyed by full employement and high wages??

# carl_ says :
11 May, 2008 [ 12:22 ]

Maybe Chileans entrepreneurs feel Peru like were at home. Lan, etc.

# sw33t says :
11 May, 2008 [ 13:03 ]

No silly. Peru's economy was destroyed by a socialist/Marxist Alvarado. Peru is finally recuperating but a few neighboring countries fell for their equivalent of Humala, and have plumetting economies as a result.

My family is from Ecuador and Correa is completely destabalizing the economy with threats of government consfiscations, increased crime, etc. Not to mention his ties to FARC and Chavez.

I have to hand it to Peruvians for realizing what was best for Peru. I'm a little jealous. Americans and Europeans are triping over themselves to invest in Peru.

# sw33t says :
11 May, 2008 [ 13:09 ]

This article explains a lot. It is a must read for those of us interested in Peru and Latin America.

http://www.ibdeditorials.com/IBDArticles.aspx?id=295226032195285

# carl says :
11 May, 2008 [ 19:44 ]

We have passed what other countries are facing right now, from Velasco who expropriate companies (like Evo, and Chavez is doing right now) farmer reforms; consequence chaos, then we have had hyperinflation Alan Garcia first government   so now  we are very aware of that, kind of totalitarian regime during the second period of Fujimori (like Chavez is doing right now, confiscation of mass media). We have had terrorism.
We know what Chavez wants but we do not give him, what he wants. Our economy is strong, and healthy. We have tourism, farming industries like no others (maca, kiwicha, kanihua, camu camu) potatoes, rice, ,  sugar cane, etc, fishery industries. We have mining industries, natural gas. We do not need Chavez.
We need more companies and investments like is doing Chilean entrepreneur, Bolivians who are afraid  of  expropriation.
Ecuandorians does not need Chavez, Why do they support Chavez? Ecuador has been successful atracting foreign real estate from Americans retirees, Cuenca, Salinas, etc. I think Ecuador should join us with Chile, Peru, Colombia. Leave Chavez alone.

# Theo says :
11 May, 2008 [ 22:21 ]

This periodical publication is for foreigners and expatriates living or who wants to live and work in Peru, I am amazed of the attention Chileans pay to this publication, every time there is some news related to Peru and Chile, immediately brings the attention of Chileans, I am wondering why?

# sw33t says :
12 May, 2008 [ 07:09 ]

Carl, you are so right. The problem is that they don't realize how hard it is to get rid of Marxism and terrorism. They think they can eventually overthrow Correa if he doesn't succeed. The people are a little too innocent.

Ecuador has petroleum and Correa uses that money for his personal gain. He has already given himself complete powers and he is turning people against each other. Of course those against him are the people who supposedly have money, and they are against Correa becasue they want to opress his supporters. People see the dangerous things Correa is doing, but they don't see it for what it is. FARC camp is an example of that. They think Correa is defending Ecuador. You get the picture.

The most precious commodity Ecuador has is "amabilidad". It is now being destroyed by crime, FARC infiltrators, and social resentment all of which have been introduced by Correa.

Peru has no idea how lucky they are right now. Chavez is a dangerous man.

# sw33t says :
12 May, 2008 [ 07:19 ]

Carl, Forgive me if I offend you but I think if it weren't for Fujimori, Peru would be just like Ecuador right now, if not worse.

Fujimori eliminated very cancerous elements in Peru and you are now reaping the rewards. Another difference is that like Pinochet, he did eventually leave, and ne left Peru in a better situation than when he found it. That is not the case with Castro, Chavez etc.

At least that's my experience over the past 8 years of visiting.

# vivaperu says :
12 May, 2008 [ 09:49 ]

Peru is doing great.  It just needs to stay on this path.  Peru has all the core elements needed as someone stated above - tourism, construction, rich agriculture, abundant natural resources.

Now Peru needs to take the next step.  Start to harvest the gains that have been made in the above areas and invest in education and infrastructure.  Continue to strengthen democracy and the rule of law.

If that continues then you will see the next wave of investment with Peru moving into higher value added businesses.  Entrepreneurism needs to be encouraged.  Clean manufacturing (yes I am not just a hard line capitalist, the environment needs to be respected).  Move further up the chain into stronger banking, outsourcing for telecom, software development.

The key is none of this happens overnight, but Peru needs the stability to continue that has evolved from Fujimori-Toledo-Garcia-...... There is no one person to take credit, it is all of Peru that needs to remain focused and make progress each and every day.  Poco a poco.

In 25 years Peru can be thought of the same as Canada.

Believe Peru!  And don't accept the lies of those that will try to manipulate you for short term gain.  At the first sign of setback (and there will be some) the cockroaches will come out in full force.

Will you sacrifice your children's future or keep your resolve?

Peru knows what doesn't work, an entire generation has seen it.  Now Peru will see what does does work and I believe they will stick with it.

# End The Tax Treaty says :
12 May, 2008 [ 12:34 ]

vivaperu, you are right on target. With the exception of Canada. Canada has started down the path of allowing to much of the government to control every thing. Especialy health care. The one true way to encourage even more investment in Peru would be to eliminate the tax treaty with the United States. Panama has the highest percentage of Americans investing & retiring there. No property taxes on new developed property, no import taxes on new automobiles brought into the country, no frivolous suit laws-> not much of a problem here unlike the U.S. Affordable health care, over all costs of goods and services are way down as a result. And very strong bank laws, No IRS Meat Hooks Allowed, with is the one true incentive for investing.

# sw33t says :
12 May, 2008 [ 13:10 ]

I'm with you guys. Peru is doing great. I just hope this government keep Chavez out. I have seen first hand how they take advantage of innocent people and promise them the world.

Peru has great potential. I'm investing. I still think the is a threat, the only threat.

# carl says :
12 May, 2008 [ 20:28 ]

I think if Fujimori, have had a third period of government. He would have caused our ruin, why because investments would have been flown. Believing a Dictatorial Regime.

Vladimiro was evil, you have seen the videos. In other words Vladi wants a third period, Fujimori did not, but was forced to. There are a lot of people that says Fuji, was a dictator. A dictator stay in politics forever he just quit so he could not be called dictator. Fujimori  improved relatioshin with Asian countries APEC.

Toledo was right, he improved relationship with the USA, indirectly with Canada. Neverthless, he broke relationship with Japan.

Garcia is doing well by now. He got his second chance to wash all what he did during his first period.

Yeap, more education is what we need.

# Julia Chacon says :
16 June, 2008 [ 15:52 ]

I am from Peru, proud of it, and I'm planning on doing business over there. And yes, we're hardworkers, and also intelligent to make this to happen "we will make our economy stronger every day, because we have the sources that we need for that"