Republic of Peru
Area: 1.28 million sq. km. (496,225 sq. mi.).
Peru is the third-largest country in South
America and is approximately three times the
size of California.
Cities: Lima (capital), Arequipa, Chiclayo,
Cuzco, Huancayo, Ica, Trujillo, Ayacucho, Piura,
Terrain: Western arid coastal plains, central
rugged Andean mountains, and eastern lowlands
with tropical forests that are part of the
Climate: Arid and mild in coastal area,
temperate to frigid in the Andes, and warm and
humid in the jungle lowlands.
Ethnic groups: Indigenous (45%), mixed
background ("mestizo") (37%), European (15%),
African, Japanese, Chinese, and other (3%).
Population: 27.2 million (2005 census).
Approximately 30% of the population lives in the
Lima/Callao metropolitan area.
Annual population growth rate (2005 est.):
Religions: Roman Catholic (90%), Seventh Day
Adventist (1.4%), other Christian (0.7%).
Languages: Spanish is the principal language.
Quechua, Aymara and other indigenous languages
also have official status.
Education: Years compulsory--11.
Attendance--92% ages 6-11, and 66% ages
12-16. Literacy--95% in urban areas,
77% in rural areas.
Health: Infant mortality rate
(2005)--31.94/1,000. Life expectancy
(2005)--67.77 years male; 71.37 years female.
Unemployment (2005): 9.6%; underemployment
Type: Constitutional republic.
Independence: July 28, 1821.
Constitution: December 31, 1993.
Branches: Executive--President, two Vice
Presidents, and a Council of Ministers led by a
Prime Minister. Legislative--Unicameral
Congress. Judicial--Four-tier court
structure consisting of Supreme Court and lower
Administrative divisions: 25 departments
subdivided into 180 provinces and 1,747
Political parties: Alianza Popular
Revolucionaria Americana (APRA), National Unity
(UN), Peru Posible (PP), Popular Action (AP),
Union for Peru (UPP), Solucion Popular, Somos
Suffrage: Universal and mandatory for citizens
18 to 70.
GDP (2005): $78.4 billion.
Annual growth rate (2005): 6.7%.
Per capita GDP (2005): $2,806.
Natural resources: Iron ore, copper, gold,
silver, zinc, lead, fish, petroleum, natural
gas, and forestry.
Manufacturing (14.9% of GDP, 2004): Types--Food
and beverages, textiles and apparel, nonferrous
and precious metals, nonmetallic minerals,
petroleum refining, paper, chemicals, iron and
Agriculture (8.3% of GDP, 2004): Products--Coffee,
asparagus, paprika, artichoke, sugarcane,
potato, rice, banana, maize, poultry, milk,
Other sectors (by percentage of GDP in 2004):
Services (55.0%), mining (6.6%), construction
(4.8%), fisheries (0.5%).
Trade: Exports (2005)--$17 billion: gold,
copper, fishmeal, petroleum, zinc, textiles,
apparel, asparagus and coffee. Major markets
(2005)--U.S. (30%), China (11%), Chile (6.6%),
Canada (6.0%), Switzerland (4.6%), Japan (3.6%),
Spain (3.3%), Netherlands (3.1%). Imports
(2005)--$12.5 billion: machinery, vehicles,
processed food, petroleum and steel. Major
suppliers (2005)--U.S. (17.7%), China
(8.5%), Brazil (8.2%), Ecuador (7.3%), Colombia
Peru is the fifth most populous country in
Latin America (after Brazil, Mexico, Colombia
and Argentina). Twenty-one cities have a
population of 100,000 or more. Rural migration
has increased the urban population from 35.4% of
the total population in 1940 to an estimated 73%
Most Peruvians are either Spanish-speaking
mestizos--a term that usually refers to a
mixture of indigenous and European/Caucasian--or
Amerindians, largely Quechua-speaking indigenous
people. Peruvians of European descent make up
about 15% of the population. There also are
small numbers of persons of African, Japanese,
and Chinese ancestry. Socioeconomic and cultural
indicators are increasingly important as
identifiers. For example, Peruvians of
Amerindian descent who have adopted aspects of
Hispanic culture also are considered mestizo.
With economic development, access to education,
intermarriage, and large-scale migration from
rural to urban areas, a more homogeneous
national culture is developing, mainly along the
relatively more prosperous coast. Peru's
distinct geographical regions are mirrored in a
socioeconomic divide between the coast's mestizo-Hispanic
culture and the more diverse, traditional Andean
cultures of the mountains and highlands.
HISTORY, GOVERNMENT, AND POLITICAL
The Inca Empire and Spanish Conquest
When the Spanish landed in 1531, Peru's
territory was the nucleus of the highly
developed Inca civilization. Centered at Cuzco,
the Incan Empire extended over a vast region
from northern Ecuador to central Chile. In
search of Inca wealth, the Spanish conqueror
Francisco Pizarro, who arrived in the territory
after the Incas had fought a debilitating civil
war, conquered the weakened people. The Spanish
captured the Incan capital at Cuzco by 1533, and
consolidated their control by 1542. Gold and
silver from the Andes enriched the conquerors,
and Peru became the principal source of Spanish
wealth and power in South America.
Pizarro founded Lima in 1535. The viceroyalty
established at Lima in 1542 initially had
jurisdiction over all of the Spanish colonies in
South America. By the time of the wars of
independence (1820-24), Lima had become one of
the most distinguished and aristocratic colonial
capital and the chief Spanish stronghold in the
Peru's independence movement was led by Jose de
San Martin of Argentina and Simon Bolivar of
Venezuela. San Martin proclaimed Peruvian
independence from Spain on July 28, 1821.
Emancipation was completed in December 1824,
when Venezuelan General Antonio Jose de Sucre
defeated the Spanish troops at Ayacucho, ending
Spanish rule in South America. Spain
subsequently made futile attempts to regain its
former colonies, but in 1879 it finally
recognized Peru's independence.
After independence, Peru and its neighbors
engaged in intermittent territorial disputes.
Chile's victory over Peru and Bolivia in the War
of the Pacific (1879-83) resulted in a
territorial settlement in which Peru ceded the
department of Tarapaca and the provinces of
Tacna and Arica to Chile. In 1929, Chile
returned Tacna to Peru. Following a clash
between Peru and Ecuador in 1941, the Rio
Protocol--of which the United States is one of
four guarantors (along with Argentina, Brazil
and Chile)--sought to establish the boundary
between the two countries. Continuing boundary
disagreement led to brief armed conflicts in
early 1981 and early 1995, but in 1998 the
governments of Peru and Ecuador signed an
historic peace treaty and demarcated the border.
In late 1999, the governments of Peru and Chile
likewise implemented the last outstanding
article of their 1929 border agreement. Peru and
Chile still dispute the sea boundary.
Military Rule and Return to Democracy
The military has been prominent in Peruvian
history. Coups have repeatedly interrupted
civilian constitutional government. The most
recent period of military rule (1968-80) began
when Gen. Juan Velasco Alvarado overthrew
elected President Fernando Belaunde Terry of the
Popular Action Party (AP). As part of what has
been called the "first phase" of the military
government's nationalist program, Velasco
undertook an extensive agrarian reform program
and nationalized the fishmeal industry, some
petroleum and mining companies, and several
Because of Velasco's economic mismanagement
and deteriorating health, he was replaced in
1975 by Gen. Francisco Morales Bermudez. Morales
Bermudez tempered the authoritarian abuses of
the Velasco administration and began the task of
restoring the country's economy. Morales
Bermudez presided over the return to civilian
government under a new constitution and in the
May 1980 elections, President Belaunde Terry was
returned to office by an impressive plurality.
Instability in the 1980s (1982-1990)
Nagging economic problems left over from the
military government persisted, worsened by an
occurrence of the "El Niño" weather phenomenon
in 1982-83, which caused widespread flooding in
some parts of the country, severe droughts in
others, and decimated the fishing industry. The
fall in international commodity prices to their
lowest levels since the Great Depression
combined with the natural disasters to decrease
production, depress wages, exacerbate
unemployment, and spur inflation. The economic
collapse was reflected in worsening living
conditions for Peru’s poor and provided a
breeding ground for social and political
discontent. The emergence of the terrorist group
Sendero Luminoso (Shining Path) in rural areas
in 1980--followed shortly thereafter by the
Tupac Amaru Revolutionary Movement (MRTA) in
Lima--sent the country further into chaos. The
terrorists were financed in part from alliances
with narcotraffickers, who had established a
stronghold in the Peruvian Andes during this
period. Peru and Bolivia became the largest coca
producers in the world, accounting for roughly
four-fifths of the production in South America.
Amid inflation, economic hardship, and
terrorism, the American Popular Revolutionary
Alliance (APRA) won the presidential election in
1985, bringing Alan García to office. The
transfer of the presidency from Belaunde to
García on July 28, 1985, was Peru's first
transfer of power from one democratically
elected leader to another in 40 years.
The Fujimori Decade (1990-2000)
Economic mismanagement by the García
administration led to hyperinflation from 1988
to 1990. Concerned about the economy, the
increasing terrorist threat from Sendero
Luminoso, and allegations of official
corruption, voters chose a relatively unknown
Fujimori, as president in 1990. Fujimori felt he
had a mandate for radical change. He immediately
implemented drastic economic reforms to tackle
inflation (which dropped from 7,650% in 1990 to
139% in 1991), but found opposition to further
drastic measures, including dealing with the
growing insurgency. On April 4, 1992, Fujimori
dissolved the Congress in the "auto-coup,"
revised the constitution, and called new
congressional elections. With a more pliant
Congress, Fujimori proceeded to govern
unimpeded. Large segments of the judiciary, the
military and the media were co-opted by
Fujimori's security advisor, the shadowy
Vladimiro Montesinos. The government unleashed a
counterattack against the insurgency that
resulted in countless human right abuses and
eventually quashed the Shining Path and MRTA.
During this time he also privatized state-owned
companies, removed investment barriers and
significantly improved public finances.
Fujimori’s constitutionally questionable
decision to seek a third term, and subsequent
tainted electoral victory in June 2000, brought
political and economic turmoil. A bribery
scandal that broke just weeks after he began his
third term in July forced Fujimori to call new
elections in which he would not run. Fujimori
fled the country and resigned from office in
November 2000. A caretaker government under
Valentin Paniagua presided over new presidential
and congressional elections in April 2001. The
new elected government, led by President
Alejandro Toledo, took office July 28, 2001.
The Toledo Administration (2001-2006)
The Toledo government successfully
consolidated Peru's return to democracy, a
process that had begun under President Paniagua.
The government undertook initiatives to
implement the recommendations made by the Truth
and Reconciliation Commission (TRC), which had
been charged with studying the circumstances
surrounding the human rights abuses and
violations committed between 1980 and 2000.
Criminal charges for corruption and human rights
violations were brought against former President
Fujimori, who is in Chile fighting efforts to
extradite him to Peru. Despite being a frequent
target of media criticism, Toledo has maintained
strong commitments to freedom of the press.
Under President Toledo, Peru signed a Trade
Promotion Agreement (TPA) with the U.S., to
replace the Andean Trade Preferences and Drug
Eradication Act, which expires in December 2006.
Toledo also unveiled the construction of a road
that will connect Brazil and Peru's isolated
interior to the Pacific coast.
Toledo's strong economic management has led
to an impressive economic boom in Peru that
remains strong. Poverty reduction has been
uneven, however. Although poverty in some areas
has decreased by up to 37% over the last five
years, nationally it has only decreased by 5%
and over half of Peruvians are still considered
to be living below the poverty line (living on
less than $2 a day). In 2005 the government
implemented "Juntos," a program to double the
income of people living under extreme poverty
(less than $1 a day).
2006 Elections and Transition
Peru held presidential and congressional
elections on April 9, 2006, and in a
presidential runoff on June 4 between the two
top vote-getters, former President Alan Garcia,
of the APRA party, defeated Ollanta Humala, of
the Union por el Peru (UPP) party, 52% to 47%,
respectively. Despite the loss, Humala's UPP
will have the largest block in Congress, with 45
seats, followed by Garcia's APRA with 36, the
Union Nacional coalition with 17, and four other
parties splitting the remaining 22 seats.
Garcia and the members of Congress will be
sworn in on July 28, 2006.
Constitution and Political Institutions
The president is popularly elected for a
five year term. A constitutional amendment
passed in 2000 prevents reelection. The first
and second vice presidents also are popularly
elected but have no constitutional functions
unless the president is unable to discharge his
duties. The principal executive body is the
Council of Ministers, comprised of 15 members
and headed by a prime minister. The president
appoints its members, who must be ratified by
the Congress. All Executive laws sent to
Congress must be approved by the Council of
The legislative branch consists of a
unicameral Congress of 120 members. In addition
to passing laws, Congress ratifies treaties,
authorizes government loans, and approves the
The judicial branch of government is headed
by a 16-member Supreme Court. The Constitutional
Tribunal interprets the constitution on matters
of individual rights. Superior courts in
departmental capitals review appeals from
decisions by lower courts. Courts of first
instance are located in provincial capitals and
are divided into civil, penal, and special
chambers. The judiciary has created several
temporary specialized courts in an attempt to
reduce the large backlog of cases pending final
court action. In 1996 a human rights Ombudsman's
office was created.
Peru is divided into 25 regions. The regions
are subdivided into provinces, which are
composed of districts. High authorities in the
regional and local levels are elected. The
country's latest decentralization program is in
hiatus after the proposal to merge departments
was defeated in a national referendum in October
Principal Government Officials
President--Alejandro TOLEDO MANRIQUE
First Vice President--vacant
Second Vice President--David WAISMAN RJAVINSTHI
President of the Council of Ministers (Prime
Minister)--Pedro Pablo KUCZYNSKI
Foreign Affairs Minister--Oscar MAURTUA
Finance and Economy Minister--Fernando ZAVALA
Defense Minister--Marciano RENGIFO RUIZ
Minister of the Interior--Romulo PIZARRO TOMASIO
Ambassador to the United States--Eduardo FERRERO
Permanent Representative to the United Nations--Oswaldo
Ambassador to the Organization of American
States--Luis Fernando DE LA FLOR
Peru maintains an
in the United States at 1700 Massachusetts
Avenue, NW, Washington, DC 20036 (tel. (202)
833-9860/67, consular section: (202) 462-1084).
Peru has consulates in Atlanta, New York,
Paterson (NJ), Miami, Chicago, Houston, Denver,
Los Angeles, San Francisco, Boston, and
Peru’s economy is one of the most dynamic in
Latin America, showing particularly strong
growth over the past five years. During the
1990s, Peru was transformed by market-oriented
economic reforms and privatizations, and met
many conditions for long-term growth. From 1994
through 1997, the economy recorded robust growth
driven by foreign direct investment, but
stagnated from 1998 through 2001. Upon taking
office in 2001, President Alejandro Toledo
maintained largely orthodox economic policies,
and took measures to attract investment. GDP
grew 6.7% in 2005, 4.8% in 2004, 4.0% in 2003,
and 4.9% in 2002. Recent economic expansion has
been driven by construction, mining, investment
(particularly in the Camisea natural gas
project), domestic demand, and exports.
Inflation was 1.5% by year-end 2005, and the
fiscal deficit fell to 0.6 % of GDP. In 2005
external debt decreased to 41.8% of GDP, and
foreign reserves reached a record $14.1 billion
by the end of 2005.
Peru’s economy is well managed, and better
tax collection and growth are increasing
revenues, with expenditures keeping pace.
Private investment is rising and becoming more
broad-based. The government has had success with
recent international bond issuances, resulting
in ratings upgrades.
Foreign Trade and Balance of Payments
Peru and the U.S. signed the Trade Promotion
Agreement on April 12, 2006 in Washington, DC.
The Trade Promotion Agreement must still be
ratified by both the Peruvian and U.S.
Peru registered a $5.2 billion trade surplus
in 2005, as exports swelled to $17 billion, up
37% from 2004. Peruvian growth was propelled by
high mineral prices, U.S. Andean Trade Promotion
and Drug Eradication Act (ATPDEA) benefits and
completion of the Camisea gas project. The trade
surplus drove up reserves and caused the
currency to strengthen 3.4% against the dollar
over the year.
Peru's strong economic performance allowed it
to buy back $2 billion in debt from the Paris
Club in June 2005.
Peru’s major trading partners are the U.S.,
the European Union (EU), China, Chile, and
Japan. In 2005, 30.6% of exports went to the
U.S. and 17.9% of imports came from the U.S.
Exports include gold, copper, fishmeal,
petroleum, zinc, textiles, apparel, asparagus
and coffee. Imports include machinery, vehicles,
processed food, petroleum and steel. Peru
belongs to the Andean Community, the
Asia-Pacific Economic Cooperation forum (APEC),
and the World Trade Organization (WTO).
The Peruvian Government actively seeks to
attract both foreign and domestic investment in
all sectors of the economy. The registered stock
of foreign direct investment (FDI) is over $14.3
billion, with the U.S., Spain and Britain the
leading investors. FDI is concentrated in
telecommunications, mining, manufacturing,
finance, and electricity. International
investment was spurred by the significant
progress Peru made during the 1990s toward
economic, social, and political stability. The
Peruvian government’s economic stabilization and
liberalization program lowered trade barriers,
eliminated restrictions on capital flows, and
opened the economy to foreign investment, with
the result that Peru now has one of the most
open investment regimes in the world. Between
1992 and 2001, Peru attracted $10 billion in
foreign direct investment, after negligible
investment during the 1980s. President Alejandro
Toledo has made investment promotion a priority
of his government.
The basic legal structure for foreign
investment in Peru is formed by the 1993
constitution, the Private Investment Growth Law,
and the November 1996 Investment Promotion Law.
Although Peru does not have a bilateral
investment treaty with the United States, it has
signed an agreement (1993) with the Overseas
Private Investment Corporation concerning
OPIC-financed loans, guarantees, and
investments. Peru also has committed itself to
arbitration of investment disputes under the
auspices of the World Bank's International
Center for the Settlement of Investment Disputes
(ICSID) or other international or national
arbitration tribunals. The Report to Congress on
Expropriation Claims and Certain Other
Investment Disputes (Section 527) lists 6 active
investment disputes in Peru involving U.S.
companies for 2005, many of which are either
under arbitration or the jurisdiction of the
Mining and Energy
Peru is a source of both natural gas and
petroleum, although the country is a net energy
importer. Oil output has been in steady decline
since the early 1980s, resulting in Peru running
an oil trade deficit since 1992. Crude oil
production in 2003 averaged 91,351 barrels per
day (bpd), compared to 195,000 in 1982. Recent
initiatives by the Peruvian Government have
begun to enhance incentives for private sector
investment in oil exploration, although several
barriers remain in place.
In August 2004, Peru inaugurated operations
of the Camisea natural gas project. Camisea gas
is fueling an electricity generator and six
industrial plans in Lima, with other facilities
in the process of switching to gas. In a second
phase, liquefied natural gas (LNG) will be
exported to the west coast of the United States
and Mexico. The gas and condensates from Camisea
are equivalent to some 2.4 billion barrels of
oil, approximately seven times the size of
Peru’s proven oil reserves. The Camisea project
is expected to gradually transform Peru’s
economy and catalyze national development. Once
the export phase is in place, the project is
expected to boost GDP by 1.3% annually for 20 to
40 years, draw over $3 billion in FDI, create
thousands of jobs, generate $10 billion in
government revenues, and turn Peru into a net
Peru is the world’s second-largest producer
of silver, sixth-largest producer of gold and
copper, and a significant source of the world’s
zinc and lead. Mineral exports have consistently
accounted for the most significant portion of
Peru’s export revenue, averaging around 50% of
total earnings in 1998 to 2005.
Under President Toledo, Peru has had one of the
best performing economies in Latin America,
largely attributable to growth in the mining and
export sectors. Solid growth and continued
increases in tax revenues, barring severe
external shocks, should allow positive
macroeconomic trends to continue in 2006.
Despite Peru’s macroeconomic success, major
challenges remain. The Government of Peru faces
strong social pressures to reduce poverty of 52%
(under $58/month) and extreme poverty of 19%
(under $32/month). One-fourth of children under
five are malnourished. Wealth and economic
activity are overly concentrated in Lima and
other major cities, with rural Andean and jungle
areas suffering extreme poverty. Unemployment
and underemployment levels total 64.5%
nationwide. Growth is barely strong enough to
generate employment faster than new entrants
come into the labor force. The government lacks
revenues for adequate social investment.
Boosting long-term growth and reducing poverty
will require strengthening the judiciary and
other institutions, reducing corruption and
completing other reforms to improve the
Peru generally enjoys friendly relations with
its neighbors. Peru, however, has expressed
concern over recent weapon purchases by Latin
American nations, in particular Chile, citing
the need to avoid a regional arms race.
In November 1999, Peru and Chile signed three
agreements that put to rest the remaining
obstacles holding up implementation of the 1929
Border Treaty. (The 1929 Border Treaty
officially ended the 1879 War of the Pacific.)
However in late 2005, a declaration of maritime
borders by Peru's Congress set off a new round
of recriminations with Chile, which claims that
the maritime borders were agreed to in fishing
pacts dating from the early 1950s.
In October 1998, Peru and Ecuador signed a
peace accord to resolve once and for all border
differences that had sparked violent
confrontations. Peru and Ecuador are now jointly
coordinating an internationally sponsored border
integration project. The U.S. Government, as one
of four guarantor states, was actively involved
in facilitating the 1998 peace accord between
Peru and Ecuador and remains committed to its
implementation. The United States has pledged
$40 million to the Peru-Ecuador border
integration project and another $4 million to
support Peruvian and Ecuadorian demining efforts
along their common border.
In 1998, Peru became a member of the
Asia-Pacific Economic Cooperation (APEC) forum,
facilitating closer ties and economic relations
between Peru and Asian nations.
Peru has been a member of the United Nations
since 1949, and is a member of the Security
Council. Peruvian Javier Perez de Cuellar served
as UN Secretary General from 1981 to 1991.
Peru maintains 204 troops in peacekeeping
operations in Haiti under the UN's MINUSTAH.
The United States enjoys strong and cooperative
relations with Peru. Relations were strained
following the tainted re-election of former
President Fujimori in June 2000, but improved
with the installation of an interim government
in November 2000 and the inauguration of the
government of Alejandro Toledo in July 2001. The
United States continues to promote the
strengthening of democratic institutions and
human rights safeguards in Peru and the
integration of Peru into the world economy.
The United States and Peru cooperate on
efforts to interdict the flow of narcotics,
particularly cocaine, to the United States.
Bilateral programs are now in effect to reduce
the flow of drugs on Peru's extensive river
system and to perform ground interdiction in
tandem with successful law enforcement
operations. The United States is considering
whether to resume cooperation on an aerial
interdiction program. The United States and Peru
cooperate on promoting programs of alternative
development in coca-growing regions.
U.S. investment and tourism in Peru have
grown substantially in recent years. U.S.
exports to Peru were valued at $2.1 billion in
2005, accounting for 17.9% of Peru's imports. In
the same year, Peru exported $5.2 billion in
goods to the United States, accounting for about
30.6% of Peru's exports to the world.
About 200,000 U.S. citizens visit Peru
annually for business, tourism, and study. About
16,000 Americans reside in Peru, and more than
400 U.S. companies are represented in the
Principal U.S. Embassy Officials
Deputy Chief of Mission--Phyllis Powers
Director, USAID Mission--Hilda Arellano
Counselor for Political Affairs--Alexander H.
Counselor for Economic Affairs--Timothy M.
Counselor for Narcotics Affairs (NAS)--Susan
Counselor for Public Affairs--Sam Wunder
Counselor for Management Affairs--Robert Davis
Counselor for Consular Affairs--Ray Baca
Commercial Counselor--Margaret Hanson-Muse
Naval and Defense Attaché--Capt. Lee Rivas
Army Attaché--Col. Kris Cuello
Chief, Military Assistance Advisory Group
(MAAG)--Col. Jeffrey Fargo
Consular Agent, Cuzco--Olga Villagarcia
Embassy in Peru is located at Avenida
Encalada, Cuadra 17 s/n, Monterrico (Surco),
Lima 33 (tel. (511) 434-3000; fax. (511)
434-3037. Home page:
The embassy is open from 8:00 a.m. to 5:00
p.m., Monday-Friday, except U.S. and some
Peruvian holidays. The mailing address from the
United States is American Embassy Lima, APO AA
34031 (use U.S. domestic postage rates). The
American Citizen Services section is open to the
public from 8:00 a.m. to 12:00 p.m.
The Consular Agency in Cuzco is located at
Anda Tullamayu 125 (tel. (51) (84) 224112 or
(51) (84) 239451; fax. (51) (84) 233541). The
USAID Building is located at Av. Encalada cdra.
17 s/n, Monterrico (Surco) Lima 33, (tel. (511)