Peru: Morning News Roundup – Thursday, June 28

Peru: Fujimori to Run in Japan’s Upper House Elections

Former Peruvian President Alberto Fujimori, under house arrest in Chile, will run in next month’s elections for Japan’s upper house of parliament. Fujimori, who holds Japanese as well as Peruvian citizenship, will run for a proportional representation seat with the People’s New Party, he said by phone from Santiago at a press conference at the party’s headquarters in Tokyo. “I have agreed to run in the upper house elections,” Fujimori said in accented Japanese, adding that he wanted to focus on Asian diplomacy and North Korean issues. “Please give me your support.” Peru is seeking the extradition of the 68-year-old former president on charges of bribery, misuse of government funds and involvement in death-squad killings. The son of Japanese immigrants, Fujimori fled to Japan in 2000 as his 10-year presidency collapsed. Japan refused to send him back to Peru. People’s New Party leader Shizuka Kamei said he hopes Fujimori will use his experience and knowledge to help Japan. (read entire article by Sachiko Sakamaki at Bloomberg.com)

Insurance – Pension fund assets jump 63% in 12mths to May – Peru

Peru’s private pension fund managers, the AFPs, saw assets under management reach 58.6bn soles (US$18.7bn) at end-May, up 62.8% compared to the same time in 2006. The figure is based on data from financial sector watchdog SBS. AFP local investments climbed 64.3% to 53.3bn soles at end-May compared to the same time last year, equivalent to 90.0% of their total investment portfolio, down from 90.5% a year ago. Offshore investments rose 64.2% during the 12 months ending May to 5.26bn soles, accounting for 8.9% of AFP investment portfolios, unchanged from end-May 2006. Peru’s multifund system offers three funds with different risk profiles. Fund 1 is conservative and mandatory for people over 60 years of age, fund 2 has a moderate risk profile and fund 3 is designed for affiliates who want an aggressive risk profile. As of May 31, fund 1 had 2.96bn soles in assets, fund 2, 47.2bn soles and fund 3, 8.4bn soles. The average 12-month real rates of return on assets under management at end-May were: fund 1, 23.8%; fund 2, 49.7%; and fund 3, 109%. (BusinessNewsAmericas)

Peru Congress Approves Trade Amendments

Peru’s Congress approved a series of amendments Wednesday to a pending trade agreement with the United States, addressing concerns by Democratic lawmakers over worker rights and environmental protection. On Monday, U.S. Trade Representative Susan Schwab said she hoped the amendments would clear the way for U.S. Congressional approval of the trade deal by next month. Peru’s 120-member Congress approved the amendments 70-38 with one abstention. "It’s time that they give us a signal, too, that the Peruvian-American friendship is valuable," Peruvian Trade Minister Mercedes Araoz said of U.S. lawmakers. The vote made Peru the first country to approve trade agreement modifications being sought by U.S. Democrats. President George W. Bush’s administration is still negotiating with Colombia, Panama and South Korea. After Democrats won control of the U.S. Congress last November, they made clear that no new trade agreements would move forward without progress on issues including child labor, protecting a worker’s right to join a union and environmental protection. (chron.com)

Oil & Gas – Jan-May oil, derivatives exports up 2.6% – Peru

Peruvian exports of oil and derivatives in the first five months of this year grew 2.6% to US$740mn compared to January-May 2006, Peru’s export and tourism promotion commission Promperú said in a statement. In the period, crude exports rose 43.3% to US$245mn, while shipments of derivatives fell 10.1% to US$495mn. The US and Panama were the principal destinations for these exports. Total January-May exports increased 14.9% to US$9.64bn from the year-ago period. (BusinessNewsAmericas)

Water & Waste – IDB approves US$200mn for water reforms program – Peru

The Inter-American Development Bank (IDB) has approved a US$200mn loan for a water resources management reform program in Peru, the bank reported in a release. The program seeks to increase the efficiency, equity and sustainability of water use by supporting measures designed to achieve the necessary structural, institutional, legal and policy reforms, which will be implemented under five different components: macroeconomic framework, national water resources strategy, institutional framework, policy framework and decentralization. "This operation will set the foundation for integrated water resource management and provide significant support to the water for all program," said IDB project team leader Luis Víctor Traverso. Peruvian President Alan García set water as a main priority when he came to power last year. The water for all program is the main engine to optimize hydrological resources and expand services to cover all of the population’s needs. The first reform component seeks to ensure that the macroeconomic environment is consistent with the program objectives. The objective of the national water resources strategy is to develop a consensus-based, multi-sector perspective on integrated water resource management analyses and proposals, in line with the program objectives, according to the release. The institutional framework component will support reform measures aimed at defining the new duties of the national authority to be placed in charge of sustainable water resource use; promote a water-use culture; and make available an integrated, up-to-date pool of quantitative and qualitative information on water resources. The policy framework component is to establish the technical, economic, financial, environmental and social measures needed for efficient integrated water resource management. The program will seek to support reforms for the establishment of water rights, the financing of water resource management and water quality, the release continued. At last, the decentralization component seeks to jump-start reforms intended to create and strengthen water management capacities through the transfer of functions and areas of authority to regional governments. The program will support the transfer of major regional water infrastructure facilities, together with institutional functions and competencies relating to water resources, to the regional governments. The 20-year loan will be handled by Peru’s ministry of finance and economy, the bank reported. (BusinessNewsAmericas)