PERU

Republic of Peru
República del Perú

CAPITAL: Lima

FLAG: The national flag consists of red, white, and red vertical stripes.

ANTHEM: Himno Nacional, beginning "Somos libres, seámoslo siempre" ("We are free; let us remain so forever").

MONETARY UNIT: The nuevo sol (ml), a paper currency of 100 céntimos, replaced the inti on 1 July 1991 at a rate of i1,000,000 = ml1, but, in practice, both currencies are circulating. There are coins of 1, 5, 10, 20, and 50 céntimos and 1 nuevo sol, and notes of 10, 20, 50, and 100 nuevos soles and 10,000, 50,000, 100,000, 500,000, 1,000,000, and 5,000,000 intis. ml1 = $0.30395 (or $1 = ml3.29) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year's Day, 1 January; Labor Day, 1 May; Day of the Peasant, half-day, 24 June; Day of St. Peter and St. Paul, 29 June; Independence Days, 28–29 July; Santa Rosa de Lima (patroness of Peru), 30 August; Battle of Anzamos, 8 October; All Saints' Day, 1 November; Immaculate Conception, 8 December; Christmas, 25 December. Movable holidays include Holy Thursday and Good Friday.

TIME: 7 am = noon GMT.

LOCATION, SIZE, AND EXTENT

Peru is South America's third-largest country, with an area of 1,285,220 sq km (496,226 sq mi), extending about 1,287 km (800 mi) se–nw and 563 km (350 mi) ne–sw. Comparatively, the area occupied by Peru is slightly smaller than the state of Alaska. It is bounded on the n by Ecuador and Colombia, on the e by Brazil and Bolivia, on the s by Chile, and on the w by the Pacific Ocean, with a total land boundary length of 5,536 km (3,440 mi) and a coastline of 2,414 km (1,500 mi).

Various offshore islands, chiefly the Chincha Islands off Pisco in southern Peru, are uninhabited, but at least 21 of these are important to the Peruvian economy and are protected by the government's guano monopoly.

Peru's capital city, Lima, is located on the Pacific coast.

TOPOGRAPHY

Peru is divided into three contrasting topographical regions: the coast (costa), the highlands (sierra), and the eastern rain forests (selva). The coastline is a narrow ribbon of desert plain from 16 to 160 km (10 to 100 mi) broad. It is scored by 50 rivers, which water some 40 oases. Only a few of these rivers, which have their source in the Andean snowbanks, reach the sea in all seasons. Although the coastal region constitutes only 12% of the national territory, it contains the ports and chief cities of Peru.

Inland, the low costa rises through the steep wastes of the high costa (760–2,000 m/2,500–6,500 ft), then ascends abruptly to the western cordillera (Cordillera Occidental) of the Andes, which, with its ridge of towering peaks, runs parallel to the coast and forms the Peruvian continental divide. The less regular Cordillera Central and Cordillera Oriental merge in central Peru with the Cordillera Occidental. They branch off to the southeast, meeting a transverse range that becomes a crescent of peaks forming the drainage basin of the 8,288 sq km (3,200 sq mi) Lake Titicaca, the highest large navigable lake in the world (about 3,810 m/12,500 ft high), which is bisected by the Peruvian-Bolivian border. Of the 10 Peruvian peaks that rise above 5,800 m (19,000 ft), Huascarán, 6,768 m (22,205 ft), is the highest.

The intermontane basins, deep-gashed canyons, and high treeless plateaus (punas) of the Andes form the sierra and constitute 27% of the country's surface. The most important rivers draining the Andes on the Atlantic watershed, such as the Marañón, Huallaga, and Ucayali, flow north or south and eventually east to form the Amazon Basin. The selva covers 61% of Peru and consists of the low selva (the Amazon rain forest) and the high selva, a steeply sloping transition zone about 100–160 km (60–100 mi) wide between the sierra and the rain forest.

Peru lies near the boundary of the Nazca and South American Teutonic Plates, which is a seismically active area. An 8.4 magnitude earthquake occurred near the coastal region on 23 June 2001, triggering a tsunami that affected parts of Chile and Bolivia. Over 100 people were killed by the event and over 2,600 more were injured. It was recorded as the largest earthquake of the year worldwide. One of the countries most devastating quakes on record occurred in May 1970 when a 7.9 magnitude earthquake killed 66,000 people.

CLIMATE

Although Peru's seaboard is situated well within the tropical zone, it does not display an equatorial climate; average temperatures range from 21°c (70°f) in January to 10°c (50°f) in June at Lima, on the coast. At Cuzco, in the sierra, the range is only from 12°c (54°f) to 9°c (48°f), while at Iquitos, in the Amazon region, the temperature averages about 32°c (90°f) all year round. The cold south–north Humboldt (or Peruvian) Current cools the ocean breezes, producing a sea mist with the inshore winds on the coastal plain. Only during the winter, from May to October, does this sea mist (garúa) condense into about 5 cm (2 in) of rain.

Latitude has less effect upon the climate of the sierra than altitude. The rainy season in the Andes extends from October to April, the reverse of the coastal climate. Temperatures vary more from day to night than seasonally. The snow line ranges from 4,700 to 5,800 m (15,500 to 19,000 ft). In the eastern rain forest, precipitation is heavy, from 190 to 320 cm (75 to 125 in) annually; rain falls almost continuously between October and April.

A warm Pacific west-to-east current called El Niño appears near the Peruvian coast every four to ten years around Christmastime (the name is a reference to the Christ child), occasionally causing serious weather disturbances.

FLORA AND FAUNA

Peru's several climates and contrasting surface features have produced a rich diversity of flora and fauna. Where the coastal desert is not barren of life, there are sparse xerophytic shrub, cactus, and algarroba, and a few palm oases along the perennially flowing rivers from the Andes. Where the sea mist (garúa) strikes against the rising slopes between 800 and 1,400 m (2,600 and 4,600 ft), a dense belt of lomas, flowering plants, and grasses (important for grazing) grows. Perennial shrubs, candelabra cacti, and intermontane pepper trees account for much of the western slope vegetation in the higher altitudes and forests of eucalyptus have been planted.

High-altitude vegetation varies from region to region, depending on the direction and intensity of sunlight. Tola grows in profusion at 3,400 m (11,000 ft) in the southern volcanic regions; bunch puna grasses may be found at 3,700 m (12,000 ft). On the brow (ceja) of the eastern slopes, mountain tall grass and sparse sierra cactus and low shrub give way at 900 m (3,000 ft) to rain forests and subtropical vegetation. As the eastern slopes descend, glaciers are remarkably close to tropical vegetation.

The 601,000 sq km (232,000 sq mi) of eastern selva, with 18 rivers and 200 tributaries, contain the dense flora of the Amazon basin. Such native plants as sarsaparilla, barbasco, cinchona, coca, ipecac, vanilla, leche caspi, and curare have become commercially important, as well as the wild rubber tree, mahogany, and other tropical woods.

For centuries, vast colonies of pelicans, gannets, and cormorants have fed on the schools of anchovies that graze the rich sea pastures of the Humboldt Current and have deposited their excrement on the islands to accumulate, undisturbed by weather, in great quantities of guano. This natural fertilizer was used by the pre-Inca peoples, who carried it on their backs to the sierra. Forgotten during the days of colonial gold greed, guano attracted the attention of scientists in 1849, when its rich nitrogen content was analyzed as 14–17%. For 40 years thereafter, Peru paid many of its bills by exporting guano to exhausted croplands of Europe. Guano has since been largely replaced in the international market by synthetic fertilizers.

The rich marine plant life off the Peruvian coast attracts a wealth of marine fauna, the most important of which are anchoveta, tuna, whale, swordfish, and marlin. Characteristic of the Andes are the great condor, ducks, and other wild fowl. The vizcacha, a mountain rodent, and the chinchilla are well known, as is the puma, or mountain lion. Peru is famous for its American members of the camel family—the llama, alpaca, huarizo, and guanaco—all typical grazing animals of the highlands. The humid forests and savannas of eastern Peru contain almost half the country's species of fauna, including parrots, monkeys, sloths, alligators, paiche fish, piranhas, and boa constrictors, all common to the Amazon Basin.

As of 2002, there were at least 460 species of mammals, 695 species of birds, and over 17,000 species of plants throughout the country.

ENVIRONMENT

Peru's principal environmental problems are air pollution, water pollution, soil erosion and pollution, and deforestation. Air pollution is a problem, especially in Lima, due to industrial and vehicle emissions. Carbon dioxide emissions from industrial sources totaled 26.1 million metric tons in 1996. In 2000, the total of carbon dioxide emissions was at 29.5 million metric tons.

Water pollution is another of Peru's environmental concerns. Its sources are industrial waste, sewage, and oil-related waste. The nation has 1,616 cu km of renewable water resources with 86% of the annual withdrawal used to support farming and 7% used for industrial activity. Only 87% of city dwellers and 66% of the rural population have access to improved water sources. Soil erosion has resulted from overgrazing on the slopes of the costa and sierra.

The National Office for the Evaluation of Natural Resources is the principal policymaking body for resource development, while the General Department of the Environment, part of the Ministry of Health, deals with control of pollution problems; water, forest, and wildlife resources are the province of the Ministry of Agriculture. Numerous environmental protection measures have been passed, but enforcement is lax and hampered by inefficient management and scarce fiscal resources. A major environmental challenge for Peru in the 1980s had been opening the selva for agricultural development without doing irreparable harm to the ecology of the Amazon Basin.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 46 types of mammals, 94 species of birds, 6 types of reptiles, 78 species of amphibians, 8 species of fish, 2 species of invertebrates, and 274 species of plants. Threatened species included the yellow-tailed woolly monkey, black spider monkey, puna rhea, tundra peregrine falcon, white-winged guan, arrau, green sea turtle, hawksbill turtle, olive ridley turtle, leatherback turtle, spectacled caiman, black caiman, Orinoco crocodile, and American crocodile. The red-throated wood rail has become extinct.

POPULATION

The population of Peru in 2005 was estimated by the United Nations (UN) at 27,947,000, which placed it at number 40 in population among the 193 nations of the world. In 2005, approximately 5% of the population was over 65 years of age, with another 32% of the population under 15 years of age. There were 101 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 1.6%, a rate the government viewed as too high. The projected population for the year 2025 was 35,725,000. The overall population density was 22 per sq km (56 per sq mi), with some 53% of the inhabitants living in the coastal region; 36% living in the Andean sierra; and 11% living in the eastern rain forest.

The UN estimated that 73% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 1.86%. The capital city, Lima, had a population of 7,899,000 in that year. Other important cities are Trujillo, Arequipa, and Chiclayo.

MIGRATION

In the 1860s and 1870s, the Peruvian government imported Chinese laborers to mine guano deposits, build railroads, and work on cotton plantations. Since then, Peru has not attracted large numbers of immigrants, although there are Japanese as well as Chinese enclaves in the coastal cities. In 1991, some 377,485 Peruvians left the country, and 309,136 returned. The United States was the leading country of destination (38%), with Chile second. In 1999, Peru continued to produce more refugees than it received, due particularly to human rights violations. As of 2004, there were 766 refugees recognized by the United Nations High Commissioner for Refugees (UNHCR), and 232 asylum seekers, the latter mainly from Colombia. In that same year, 1,593 Peruvians sought asylum in Canada, Ecuador, and the United States.

For decades, the government encouraged the movement of people into the empty areas of the eastern Andean slopes (the high selva) in order to bring the eastern provinces into the national economic mainstream. Since the 1950s, however, the main trend has been in the reverse, from the sierra to the coastal cities. Lima has received the bulk of rural migrants, and by the mid-1990s the metropolitan area of Lima supported nearly one-third of the total national population.

The total number of migrants living in Peru in 2000 was 46,000. In 2004, remittances were $1.3 billion, 5% of GDP. In 2005, the net migration rate was an estimated -1.0 migrants per 1,000 population. The government views the migration levels as satisfactory.

ETHNIC GROUPS

According to the latest estimates, about 45% of the inhabitants are Amerindian, 37% are mestizo (of mixed Amerindian and Spanish or other European ancestry), 15% are white, and 3% are black, Asian, or other. Small groups of Germans, Italians, and Swiss are important in commerce, finance, and industry. Chinese and Japanese operate small businesses, and some Japanese have been successful in agriculture.

Of the 4–7 million sierra Amerindians under Inca domination, fewer than one million were left when the first colonial census was taken in 1777. A failing food supply and new diseases, such as smallpox, scarlet fever, and measles, were lethal to the young. Despite continuing disease and poverty found among the Amerindians today, they have increased to more than eight million. The main groups are the Quechua- and Aymará-speaking tribes, but there are also some other small tribes in the highlands. Peru's lowland forest Amerindians were never subjugated by Incas or by Spaniards and continue to be fishermen, hunters, and foragers.

In the mid-1980s, at least 225,000 rain forest Indians were grouped in 37 tribes. A 20-year plan announced in 1968 called for the full social, economic, and political integration of Peru's Amerindian population. Nevertheless, in the 1980s, sociocultural distinctions based on ethnic background were endemic to Peruvian society, with whites (especially the criollos, those of early Spanish descent) at the top of the hierarchy, mestizos and cholos (acculturated Amerindians) below them, and monolingual Quechua- or Aymará-speaking Amerindians at the bottom.

LANGUAGES

Spanish is spoken, as in all Latin America, without the use of the sound represented by th in thing characteristic of Castilian. The majority of the population speaks only Spanish. At least seven million Amerindians, as well as many mestizos, speak Quechua, the native tongue of the Inca peoples, the use of which was outlawed following an Amerindian revolt in 1780. A decree of 27 May 1975 granted Quechua the status of an official language, along with Spanish. Some words in modern English usage derived from Quechua are alpaca, condor, pampa, coca, guano, Inca, llama, guanaco, vicuña, puma, and quinine. Aymará is spoken by at least 700,000 people, especially in the department of Puno and around Lake Titicaca, and various other languages are spoken by tribal groups in the Amazon Basin.

RELIGIONS

Although about 80% of the population is nominally Roman Catholic, it has been estimated that only about 15% of all Catholics actively participate in religious services. The practice of Catholicism in Peru is often imbued with Amerindian elements. Between 7% and 12% of the populations are Protestants, including evangelical Christians (Lutherans, Calvinists, Anglicans, Methodists, Baptists, Presbyterians, Pentecostals, members of the Assemblies of God, the Christian Missionary Alliance, The Evangelical Church of Peru, and the Church of God) and non-evangelical Christians (Mormons, Seventh-Day Adventists, and Jehovah's Witnesses). Approximately 2.5% of the populace are members of other religions, including Jews, Muslims, Buddhists, and Shintoists. Atheists and agnostics account for 1.4%.

The constitution guarantees religious freedom, but it also recognizes the Roman Catholic Church as an "important element in the historical, cultural, and moral development" of the country. A 1980 concordat signed with the Vatican grants special recognition, and preferential treatment, to the Catholic Church as well.

TRANSPORTATION

The system of highways that was the key to the unification of the Inca Empire was not preserved by the Spanish conquerors. The lack of an adequate transportation system is still a major obstacle to economic integration and development.

As of 2004, Peru's railroad system consisted of 3,462 km (2,153 mi) of standard and narrow gauge railway lines. Of that total, the standard gauge accounts for 2,962 km (1,842 mi). Nationalized in 1972, the system is subject to landslides and guerrilla attacks. Operation of the system was given in concession in July 1999, for 30 years, to two companies: Ferrovias Central Andina S. A. (central railway); and Ferrocarril Transandino S. A. (south and south-east railways). The two principal railway systems, the Central and Southern railways, were built during the second half of the 19th century and were at one time owned and operated by British interests. The Central Railway, the world's highest standard-gauge rail-road, connects Lima-Callao with the central sierra. The Southern Railway links Arequipa and Cuzco with the ports of Mollendo and Matarani and runs to Puno on Lake Titicaca, where steamers provide cross-lake connections with Bolivia. The Tacna-Arica Railway, totaling 62 km (39 mi) and linking Peru with Chile, is also a part of the nationalized system.

In 2002, of the estimated 72,900 km (45,300 mi) of existing roads, only 8,700 km (5,406 mi) were paved. The nation's highways are deteriorating, especially in the mountains, where land-slides and guerrilla attacks often occur. The two primary routes are the 3,000 km (1,864 mi) north-south Pan American Highway, connecting Peru with Ecuador, Bolivia, and Chile, and the Trans-Andean Highway, which runs about 800 km (500 mi) from Callao to Pucallpa, an inland port on the Ucayali River. The 2,500-km (1,550-mi) Jungle Edge Highway, or Carretera Marginal de la Selva, spans most of Peru along the eastern slopes of the Andes and through the selva. In 2003, there were 346,300 automobiles and 234,800 commercial vehicles. About 60% of inland freight and 90% of all passengers are carried by road.

The Amazon River with its tributaries, such as the Marañón and the Ucayali, provides a network of waterways for eastern Peru. Atlantic Ocean vessels go 3,700 km (2,300 mi) up the Amazon to Iquitos and, at high water, to Pucallpa. As of 2004, there were 8,808 km (5,473 mi) of waterways, of which 8,600 km (5,349 mi) consist of tributaries of the Amazon River and 208 km (129 mi) on Lake Titicaca. Peru has 11 deepwater ports and in 2005 its merchant fleet consisted of four vessels of 1,000 GRT or more, totaling 13,666 GRT. Only Peruvian ships may engage in coastal shipping. Callao, Peru's chief port, and Salaverry, Pisco, and Ilo have been expanded.

Much of Peru would be inaccessible without air transport. In 2004 there were an estimated 234 airports. In 2005, a total of 54 had paved runways, and there was also one heliport. The two principal airports are Col. Fco. Secada at Iquitos and Jorge Chavez at Lima. Faucett Airlines is the older of the two main domestic air carriers, which serve 40 airports and landing fields. The recently privatized Aeroperú, created in May 1973, provides both domestic and international services. In 2003, about 2.233 million passengers were carried on scheduled domestic and international flights. The Peruvian Air Force also operates some commercial freight and passenger flights in rain forest areas.

HISTORY

Archaeological evidence indicates that Peru has been inhabited for at least 12,000 years. Perhaps as early as 6,000 years ago, the first primitive farmers appeared. Between 500 bc and ad 1000 at least five separate civilizations developed. The Paracas, on the southern coast, produced elaborately embroidered textiles and performed brain surgeries, in spanish "trepanaciones craneanas. " The Chavín, in the highlands, were noted for their great carved stone monoliths. The Mochica, on the north coast, produced realistic pottery figures of human beings and animals. The Nazca in the south were noted for the giant figures of animals in the ground that can be seen only from the sky. The Chimú were the most developed of these groups.

The Quechua Empire, whose emperors had the title Sapa Inca, was established in the 13th century. During the next 300 years, the extraordinary empire of the Incas, with its capital at Cuzco, spread its spiritual and temporal power to northern Ecuador, middle Chile, and the Argentine plains. By means of a system of paved highways, the small Cuzco hierarchy communicated its interests to a population of 8–12 million. The intensive agriculture of scarcely tillable lands, held in common and controlled by the state, created a disciplined economy. The ayllu, a kinship group that also constituted an agrarian community, was the basic unit of the Inca Empire, economically and spiritually. The Incas were sun worshipers and embalmed their dead. Their highly developed civilization used a calendar and a decimal system of counting and advanced arquitecture, but never developed a wheel.

Francisco Pizarro's small band of Spaniards arrived in 1532, shortly after a civil war between the Inca half-brothers Huáscar and Atahualpa. The empire collapsed in 1533. Lima was established in 1535 and promptly became the opulent center of the Viceroyalty of Peru. It held jurisdiction over all Spanish South America except Venezuela. The Spanish imperial economy, with its huge land grants given by the crown and its tribute-collecting encomiendas, brought vast wealth and a new aristocracy to Peru. To Spain, Peru was a gold bank. Mines were exploited, and overworked Indians perished by the millions as food supplies declined.

Peru remained a Spanish stronghold into the 19th century, with modest internal agitation for independence. One notable exception was the abortive revolt led by a mestizo known as Tupac Amaru II in 1780. Otherwise, Peruvian royalists helped the crown suppress uprisings in Peru and elsewhere. In the end, Peru was liberated by outsiders—José de San Martín of Argentina and Simón Bolívar of Venezuela. San Martín landed on Peruvian shores in 1820 and on 28 July 1821 proclaimed Peru's independence. The royalists were not quelled, however, until the Spaniards were defeated by forces under Bolívar at the battle of Junín and under Antonio José de Sucre at Ayacucho in 1824. The victory at Ayacucho on 9 December put an end to Spanish domination on the South American continent, although the Spanish flag did not cease to fly over Peru until 1826.

Between 1826 and 1908, Peruvian presidents ruled an unstable republic plagued by rivalries between military chieftains (caudillos) and by a rigid class system. Marshal Ramón Castilla, president from 1845 to 1851 and from 1855 to 1862, abolished Amerindian tributes and introduced progressive measures. Between the 1850s and the mid-1880s, Peru experienced an economic boom financed by sales of guano to Europe. A program of road building was implemented, and an American entrepreneur, Henry Meiggs, was hired by the government to build a railroad network in the Andes. In 1866, a Spanish attempt to regain possession of Peru was frustrated off the port of Callao. An 1871 armistice was followed in 1879 by the formal recognition of Peruvian independence by Spain. The War of the Pacific (1879–84) followed, in which Chile vanquished the forces of Peru and Bolivia and occupied Lima from 1881 to 1883. Under the Treaty of Ancón, signed in October 1883, and subsequent agreements, Peru was forced to give up the nitrate-rich provinces of Tarapacá and Arica.

Peru entered the 20th century with a constitutional democratic government and a stable economy. This period of moderate reform came to an end in 1919, when a businessman, Augusto Leguía y Salcedo, who had served as constitutionally elected president during 1908–12, took power in a military coup and began to modernize the country along capitalistic lines. It was in opposition to Leguía's dictatorship, which had the backing of US bankers, that a Peruvian intellectual, Víctor Raúl Haya de la Torre, founded the leftist political party "American Popular Revolutionary Alliance" (APRA). In 1930, after the worldwide depression reached Peru, Leguía was overthrown by Luis M. Sánchez-Cerro, who became Peru's constitutional president in 1931 after an election which the Apristas (the followers of APRA) denounced as fraudulent. An Aprista uprising in 1932 was followed by the assassination of Sánchez-Cerro in April 1933, but the military and its conservative allies maneuvered successfully to keep APRA out of power. Manuel Prado y Ugartache served as president during World War II, a period which also brought the eruption of a border war with Ecuador in 1941. The 1942 Protocol of Río de Janeiro, which resolved the conflict on terms favorable to Peru, was subsequently repudiated by Ecuador.

In 1945, Prado permitted free elections and legalized APRA. Haya de la Torre and the Apristas supported José Luis Bustamante y Rivera, who won the elections, and APRA (while changing its name to the People's Party) received a majority in congress. In 1948, military leaders charged the president with being too lenient with the Apristas and dividing the armed forces. A coup led by Gen. Manuel A. Odría ousted Bustamante, and APRA was again outlawed. Several hundred Apristas were jailed, while others went into exile. In January 1949, Haya de la Torre found refuge in the Colombian embassy, where he lived for the next five years. Under the rule of Odría and his military board of governors, the Peruvian economy flourished. Odría announced his retirement in 1956, and promoted his own candidate for the presidency. In a free election, the opposition candidate, former President Prado (tacitly supported by the outlawed APRA) returned to office.

Peru under the Prado regime was characterized by deep-rooted social unrest and political tension. Prado himself faded into the background, allowing Premier Pedro Beltrán to rule. Beltrán's economic moves stabilized Peru's financial picture, but the political problems remained. The election of 1962 was a three-way race between Haya de la Torre; Odría, back from retirement; and Fernando Belaúnde Terry, leader of the Popular Action Party (AP). Although Haya de la Torre got the most votes, he did not receive the constitutionally required one-third of the votes cast. The parties then went into negotiations, and a deal was struck giving Odría the presidency with an APRA cabinet. The military thereupon intervened, annulled the vote, and suspended the newly elected congress. The governing junta then announced new elections for July 1963, and the same candidates ran. This time, Belaúnde received 39% of the votes cast to become president.

Belaúnde embarked on a program of agrarian reform, as well as tax incentives to promote manufacturing. However, he was caught in a crossfire between the Odrístas, who considered him a radical, and the Apristas, who believed he was not doing enough. Belaúnde's AP formed a coalition with the Christian Democratic Party to control the senate, but APRA and the Odría National Union controlled the Chamber of Deputies. On top of all this, Belaúnde had to deal with two separate leftist insurgencies in Peru's highlands. As Peru approached new presidential elections, the AP began to quarrel, and opposition parties continued to sabotage Belaúnde's programs. Then a scandal concerning the granting of oil concessions to the International Petroleum Co., a subsidiary of Standard Oil of New Jersey, rocked the government. A military junta exiled Belaúnde on 3 October 1968 in a bloodless coup.

In 1969, the military government, under the presidency of Gen. Juan Velasco Alvarado, began enacting a series of social and economic reforms. This time, they did not worry about opposition, ruling instead by decree. By 1974 they had converted private landholdings into agricultural cooperatives, nationalized a number of basic industries, and had mandated profit-sharing schemes for industrial workers. The military also reached out to Peru's long-neglected Amerindian population, making Tupac Amaru a national symbol, and recognizing Quechua as an official national language.

In August 1975, Velasco, whose health and political fortunes had both declined, was removed from office in a bloodless coup and replaced by Gen. Francisco Morales Bermúdez Cerruti, formerly his prime minister. The new regime moved to liberalize the system, declaring a general amnesty for post-1968 political exiles and the legalization of some previously banned publications. They subsequently announced a return to civilian government and the creation of a "fully participatory social democracy." Some state-controlled enterprises were sold and worker-participation programs were scaled down. A Constituent Assembly was elected, and under the leadership of the perennial candidate Haya de la Torre they drew up a new constitution in 1979. New elections were held in 1980, and the AP and Belaúnde returned to power.

Belaúnde's second term was even less a success than his first. Adverse weather conditions and the world recession accompanied ill-conceived policies that led to triple-digit inflation. Austerity programs caused increased rates of unemployment and currency problems pinched the Peruvian middle-class. Perhaps most disturbing of all, a small Maoist guerrilla group, Sendero Luminoso (Shining Path) was operating openly in the Andes, especially around Ayacucho. Despite passage of an antiterrorist law in 1981, terrorist activities intensified. The AP's tenuous hold on the government was slipping. The AP won only 15% of the vote in the 1983 municipal elections. By 1985, with Peru on the brink of an economic collapse, the AP received a mere 7% of the vote.

The election of 1985 was historic in two ways: it was the first peaceful transfer of power in 40 years, and it brought the first president from APRA since the party's founding in 1928. Alán García Pérez, secretary-general of APRA, won with 53% of the vote and brought with him an APRA majority in both houses. The new president pursued populist economic policies aimed at controlling inflation, stimulating the economy, and limiting external debt repayments. To get inflation under control, García established a strict set of price controls, dropping inflation precipitously. Salaries were then allowed to increase, which led to a dramatic surge in the production of industrial and consumer goods. García also announced that external debt service would be set at 10% of export earnings, when several times that amount would have been required to keep up with interest payments alone.

While initially successful, these programs eventually ran aground. The IMF, a constant target of García, declared Peru ineligible for any further borrowing because of the size of Peru's external debt. After its initial boom, industrial production began to sag. Food shortages became common as suppliers refused to produce with artificially low prices. By 1990, inflation had climbed to four-digit levels.

García had some success in dealing with Peru's democratic left, but the militant left was another story. By increasing the stridency of his rhetoric, especially against the United States, García was able to capture leftist votes, seriously damaging the power of the United Left (Izquierda Unida—IU). However, Sendero escalated its attacks, coming down out of the mountains and striking at urban and suburban targets around Lima and Callao. In addition, the Tupac Amaru Revolutionary Movement (MRTA) merged with the Movement of the Revolutionary Left (MIR), and struck with increasing intensity. Although García had promised to get the military under control, it was soon clear that he could not function without them, and authorized a set of brutal counter-insurgent campaigns.

By 1990, Peruvians began to cast about for someone to deliver the country from its economic and social woes. Neither APRA nor the AP had any credibility left. In a surprise, Alberto Fujimori, the son of Japanese immigrants, defeated conservative novelist Mario Vargas Llosa by 57% to 34%. Other candidates totaled a little over 9%. Fujimori immediately imposed a draconian set of austerity measures designed to curb inflation, which he had promised not to do during his candidacy. These measures caused a great deal of economic dislocation, but did reduce inflation to pre-1988 levels.

Fujimori moved aggressively to combat Sendero and the MRTAMIR. He organized and armed rural peasants to counter the increased guerrilla presence, and gave the military a broad mandate to crack down on the insurgents. The capture of Abimaél Guzmán, leader of Sendero Luminoso, was hailed as a major blow against the movement, but the violence continued. Human rights continued to deteriorate, and the military became stronger.

Domestic opposition increased as Fujimori became increasingly isolated politically. Then, in April 1992, Fujimori shut down Congress and refused to recognize any judicial decisions. The autogolpe ("self-coup") received widespread popular approval and, most significantly, the military supported Fujimori's moves. In 1992, elections were held to create a Constituent Assembly charged with making constitutional reforms, including allowing Fujimori to run for a second five-year term in 1995. Both APRA and AP refused to participate, and Fujimori's New Majority/Change 90 party took a majority of seats. With full executive powers and a legislature full of supporters, Fujimori was able to enact whatever reforms he deemed necessary to improve Peru's economic and social situations.

A border war with Ecuador in early 1995 (in which both sides claimed victory) boosted Fujimori's popularity to a level that enabled him to win his unprecedented second-consecutive presidential election by a landslide, roundly defeating former UN secretary general Javier Perez de Cuellar. In May 1999, Fujimori and Ecuadorian President Jamil Mahuad formally ended the border dispute that dated from 1941. The accord gave Ecuador a small piece of Peruvian territory and navigation rights on some Peruvian rivers. In Ecuador, the peace treaty was considered a capitulation, turning the army against Mahuad.

Fujimori continued to rule by martial law, and took decisive steps to end terrorist opposition and violence in Peru. In 1996, the second-highest leader of Sendero, Elizabeth Cardenas Huayta, was arrested. The Tupac Amaru rebel movement was decimated in April 1997 when military commandos stormed the Japanese Embassy, where the rebels had been holding hostages since December 1996, and killed all 14 of the Tupac Amaru guerrillas who had carried out the siege (one hostage died in the raid, from a heart attack as a result of a gunshot wound).

Although the success of the embassy raid and the end of the hostage crisis at first raised Fujimori's popularity, it soon began to decline as Peruvians wearied of Fujimori's strong-arm tactics. Government attacks on the press and on certain members of the business community created a mounting dissatisfaction with the Fujimori regime. When Fujimori fired three Constitutional Tribunal judges for rejecting his claim to a third consecutive presidential term, Peruvians' tolerance was pushed beyond its breaking point and protests erupted. Continuing widespread poverty (despite recent years of economic growth), coupled with governmental abuses of power and violence eroded Fujimori's popular support. As the April 2000 elections came near, Fujimori at first remained silent on whether he would seek a third term. However, political maneuvering by his supporters had ensured that no viable candidate would rise to face him.

Opposition parties were weak and divided. Former President Alan García, who had fled the country in 1992 and faced corruption charges, became a possible candidate. Fujimori's supporters in congress quickly approved a law banning any former officeholder facing criminal charges from running for election. But Fujimori did remain vulnerable; a two-year recession and widespread unemployment had left one of every two Peruvians living in poverty by mid-1999. Fujimori also was under a great deal of international pressure to rectify undemocratic conduct. In June 1999, members of the US House of Representatives said they were concerned at the "erosion of democracy and the rule of law" in Peru. A Senate subcommittee said it should be consulted before the White House gave any more American intelligence to Peru. Later that year, the Inter-American Court of Human Rights rejected Peru's bid to withdraw from its jurisdiction, saying it would continue to summon Peruvian officials to declare on reported abuses.

Within weeks of the April 2000 elections, Fujimori seemed all but certain of winning the presidency for a third term. Yet, a virtual unknown had suddenly become a viable candidate, winning support from throughout the country. Alejandro Toledo, a 54year-old business school professor, was soon ahead of other challengers trying to defeat Fujimori. Toledo had a modest upbringing. His father was a bricklayer, and his mother sold fish at a street market. Of indigenous ancestry, Toledo quickly gained an important following in Peru's Amerindian communities, where Fujimori had found support. The election was held on 9 April, with several international organizations monitoring polling stations.

It soon became clear that Fujimori's supporters were trying to steal the election. There were unexplained delays in revealing the results, and widespread reports of voter fraud. The United States, the Organization of American States, the Atlanta-based Carter Center, and several other international organizations monitoring the election agreed that widespread fraud had tainted the elections and demanded a second presidential election between Fujimori and Toledo. Tens of thousands of Peruvians marched in peaceful protests demanding a second round. The other presidential candidates backed Toledo. Three days after the election, the electoral office said Fujimori had obtained 49.8% of the vote, not enough to capture the 50% plus one he needed to avoid a second round. Toledo received 40.3% of the vote.

The political crisis resulting from the rigged election became uncontrollable after Fujimori's chief advisor, Vladimiro Montesinos, was shown nationwide in a video, which he had produced, bribing an opposition congressman to join with Fujimori in September 2000. Dissenting politicians had leaked the tape to the media and with the knowledge that hundreds of similar tapes existed, Montesinos fled the country to Panama, which did not grant him political asylum. Montesinos then returned to Peru, but his whereabouts were unknown. Fujimori enacted a far-fetched search for the runaway Montesinos, but in the process Montesinos escaped by yacht to Costa Rica and later Venezuela. In a last hope to stabilize the political environment, Fujimori offered to hold new presidential elections in April 2001 in which he would not run. However, such gestures did not prevent the deepening of the institutional crisis and in an official APEC meeting in November, Fujimori flew to Japan and resigned via facsimile. He remained in exile in Japan, and the Japanese government subsequently recognized him as a Japanese citizen. Congress impeached Fujimori, judging him "morally unfit to govern" and selected congressman Valentin Paniagua to be the president of the interim government (after the sitting vice president also resigned). During Paniagua's presidency, Montesinos was found and extradited to Peru, and political calm was restored for a brief period.

A new presidential election was held in April 2001. Alejandro Toledo came in first with 36.5% of the vote, but he was forced into a runoff with former president Alan García (25.8%) who had returned to the country after Fujimori's resignation. Toledo went on to win the runoff with 53.1% of the vote. But García's impressive 46.9% transformed the former discredited president into a powerful actor in Peruvian politics.

Toledo became the first Peruvian of indigenous heritage to become president. Yet, his popularity and support during the first months of his administration began to fall as accusations of corruption and moral improprieties tainted his presidency. After failing to keep his campaign's main promise to create jobs for all Peruvians within 90 days after his inauguration, protests and national strikes plagued the country as people demanded better services and wages, as well as less corruption. No real advancement in the economy was perceived, and further resentment was sparked by criminal acts of Toledo's family and symbolic acts of government, such as increasing the president's salary and attempting to increase the sales tax twice in one year. Security declined as crowds in poorer areas took the law in their own hands, even lynching corrupt local bureaucrats or criminals. Toledo's efforts to prosecute those responsible for corruption and human rights violations during the Fujimori government also distracted him from the urgent social and economic challenges facing his country.

During his tenure, Toledo suffered from dismal approval ratings, ranging in the single digits. Politically, his party quickly crumbled, with many key followers leaving or beginning new parties. The political turmoil brought by his style of leadership led him to change presidents of congress five times, in vain attempts to appease the opposition and Peruvian citizens. His ineffectual leadership and the lack of discipline within his political party also hindered the process of democratic restoration in Peru.

GOVERNMENT

Prior to the military coup in 1968, Peru was governed under the constitution of 1933, which declared Peru to be a republic with a centralized form of government. Legislative powers were vested in a Senate and a Chamber of Deputies, of variable number. Both senators and deputies served their electoral districts for a period of six years. Under the constitution, executive power was held by the president, who, with two vice presidents, was elected for a six year term, with a minimum of one-third of the vote, but could not be reelected until an intervening term had passed. Voting was obligatory for all literate Peruvian citizens aged 21 to 60.

The military leaders who seized control of the government in 1968 immediately disbanded the bicameral Congress. For the following decade, Peru was ruled by a military junta consisting of the president and the commanders of the three armed forces. The return to civilian rule began with the election of a Constituent Assembly in June 1978 and the promulgation of a new constitution on 12 July 1979. Presidential elections were held in May 1980, and Peru's first civilian government in 12 years took office in July.

After the autogolpe in 1992, the constitution was suspended. A new Constituent Assembly was elected and a new constitution was written. For the most part, all the major elements of the 1979 constitution were preserved, but presidents were allowed to run for one immediate reelection. Under the 1979 constitution, the president was popularly elected for a five-year term and could not be reelected to a consecutive term. The winning candidate had to win at least 50% of the vote or face a runoff election against the second-place candidate. The National Congress consisted of a 60-member Senate and a 180-member Chamber of Deputies. All elected legislators had five-year terms. The 1979 constitution eliminated literacy as a qualification for voting and made suffrage universal at age 18. In addition, there are more than 160 locally elected government councils.

POLITICAL PARTIES

Throughout most of Peru's modern political history, personalities and power politics have counted for more than party platforms. There are nevertheless several parties with origins at least as far back as the 1950s.

The American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana—APRA) was begun in 1924 by Víctor Raúl Haya de la Torre as a movement of and for Latin American workers. The five planks in its original platform were opposition to "Yankee imperialism," internationalization of the Panama Canal, industrialization, land reform, and solidarity among the world's oppressed. Controlling most of unionized labor, APRA was anti-Communist and anti-imperialist. Outlawed in 1931 and again in 1948, APRA was legalized in 1956. APRA has been historically opposed to the military, and political conditions in Peru from the 1930s until the mid-1980s have been dominated by hostility between APRA and armed forces leaders. After the death of Haya de la Torre in 1979, APRA was weakened by internal dissension. By 1985, new leadership and the failure of the Belaúnde government allowed APRA its first experience in power. Yet, the economic crisis experienced during the Alan García government severely hurt the party. Lack of leadership within APRA also hindered that party electorally. After Fujimori's demise, APRA reemerged as a strong and unified party. In the 2001 presidential and parliamentary elections, APRA obtained 20% of the vote (26 seats in the 120-member chamber), consolidating its position as the second-largest and the most disciplined party in Peru.

The Popular Action Party (Partido de Acción Popular, or AP) was founded in 1956. Originally a reform party, it competed with APRA for the support of those favoring change in Peru. After an impressive campaign in 1956, the AP won the presidency in 1963, thanks to the military's hatred of APRA. In the 1980 presidential election, Belaúnde received 45.4% of the votes cast, compared with 27.4% for APRA candidate Armando Villanueva del Campo. After Belaúnde's tenure, AP has lost electoral appeal. In the most recent election, AP only obtained 4% of the vote and three seats in the chamber.

After the dissolution of congress by the 1968 military coup, political parties continued to exist, although they were denied any role in government until the late 1970s. Ideologically, the military rulers between 1968 and 1980 reflected both strong socialist and nationalist principles.

The left has undergone a number of changes, partly as a result of military intervention, and most recently has been undermined by the activities of leftist guerrillas. The Peruvian Communist Party (Partido Comunista Peruano) was formed in 1929. Outlawed in 1948, it changed its name to the Revolutionary Labor Party (Partido Obrero Revolucionario—POR), which split in the 1980s into a number of small factions. The United Left (Izquierda Unida—IU), which formed to support the candidacy of Alfonso Barrantes Lingán, took 21.3% of the 1985 ballot. Barrantes was mayor of Lima until APRA unseated him in 1986, whereupon Barrantes resigned as IU president and the coalition dissolved.

The largest active guerrilla party is Sendero Luminoso (Shining Path), a Maoist group founded in 1964. Its founder, Abimaél Guzmán, a former college professor, was captured by the government and is still imprisoned. Sendero's strength is concentrated around Ayacucho, in the sierra southeast of Lima. Its program includes not only attacks on bridges, power lines, and urban centers but also attempts to organize highland peasants. Sendero collects tribute from peasants in exchange for protection and encourages peasants not to sell their food crops to the cities.

A smaller group, the Tupac Amaru Revolutionary Movement (Movimiento Revolucionario Tupac Amaru—MRTA), merged with the Movement of the Revolutionary Left (MIR) to form a group that has been increasingly active. The MRTA-MIR is more urban-oriented and follows a more orthodox Marxist line than the eccentric Sendero.

President Alberto Fujimori came to office in 1990 as an independent, calling his party Change 90-New Majority. In the 1995 elections, Fujimori was reelected in a landslide victory and his party took 67 of the 120 congressional seats, giving it a clear majority (the next-highest number of seats, 17, went to the Union for Peru party, led by former UN secretary general Javier Perez de Cuellar who came in second in the presidential election).

Current president Alejandro Toledo also formed his own party before the 2001 election. Peru Posible was formed in 2001 around the then-popular figure of Toledo. With 26.3% of the vote, it captured 45 seats in the Assembly. But Peru Posible has shown little party discipline and it is unlikely that the party will survive beyond Toledo's own political career.

By 2005 the Popular Christian Party (Partido Popular Cristiano—PPC), aligned with former Prime Minister Antero Florez Arao, led in the political arena against Fujimori's newly named party Si Cumple and APRA which came in second and third. However, with growing discontent with the more traditional political parties, several new options emerged. Business leaders from the manufacturing conglomerate commonly known as Gamarra created their own political party named Solución Nacional. Another political party growing from the small and medium business sector is Proyecto Pais and Somos Peru, started by the former Mayor of Lima Alejandro Andrade. For the 2006 elections, 28 candidates were formally registered. Because political parties represent small constituencies and have uncertain political futures, the prospect of party politics remains uncertain.

LOCAL GOVERNMENT

In March 1987, President García promulgated a regionalization law that would replace the nation's 24 departments (and the constitutional province of Callao) with 12 regions having economic and administrative autonomy. Each region was to have an assembly of provincial mayors, directly elected members, and representatives of various institutions. However, due to inadequate funding and an uncertain political picture, these regions did not function and existed alongside the departmental structure, which was never dismantled. The 148 provincial subdivisions remained intact.

The 1979 constitution confirmed the legal status of about 5,000 Indian communities. The first local elections since 1966 took place in November 1980 and occur at three-year intervals. The 1993 constitution reaffirmed those indigenous rights and divided the country into 25 departments.

JUDICIAL SYSTEM

The Peruvian legal system is based generally on the Napoleonic Code. The 1993 constitution guarantees the independence of the judiciary. Peru's highest judicial body, the 16-member Supreme Court, sits at Lima and has national jurisdiction. The nine-member Court of Constitutional Guarantees has jurisdiction in human rights cases. Superior courts, sitting in the departmental capitals, hear appeals from the provincial courts of first instance, which are divided into civil, penal, and special chambers. Judges are proposed by the National Justice Council, nominated by the president, and confirmed by the Senate; they serve permanently until age 70. Justices of the Peace hear misdemeanor cases and minor civil cases.

The 1993 constitution abolished the death penalty (except for treason in time of war) and limited the jurisdiction of military tribunals; it also established the Public Ministry, including an independent attorney general, to serve as judicial ombudsman. Despite such reforms, the Peruvian judicial system still suffers from overcrowded prisons and complex trial procedures. Many accused persons (especially those accused of drug trafficking or terrorism) may spend months or even years in prison before they are brought to trial.

Although the judicial branch has never attained true independence, provisions of the 1993 constitution establish a new system for naming judges which may lead to greater judicial autonomy in the future. The 1993 constitution also provides for a human rights ombudsman (the Office of the Defender of the People), a Tribunal of Constitutional Guarantees empowered to rule on the constitutionality of legislation and government actions, a National Judiciary Council, and a Judicial Academy to train judges and prosecutors. The Tribunal of Constitutional Guarantees has seven members; three of them are in some way associated with the president or his party. To declare a law unconstitutional, at least six of the judges must agree.

ARMED FORCES

Peru's armed forces in 2005 totaled 80,000 active personnel, supported by 188,000 reservists. The Army numbered 40,000 members, whose equipment included 275 main battle tanks and 110 light tanks. The Navy had 25,000 active personnel including 4,000 Marines, 1,000 Coast Guard members, and 800 naval aviation personnel. The Air Force numbered 15,000 personnel, with 89 combat capable aircraft, including 18 fighters, over 73 fight ground attack aircraft, and 16 attack helicopters. The Navy operated 6 tactical submarines, 1 cruiser, 4 frigates, and 13 patrol/coastal vessels. About 77,000 paramilitary troops comprise the national police force. The defense budget in 2005 totaled $1.08 billion.

INTERNATIONAL COOPERATION

Peru is a charter member of the United Nations, having joined on 31 October 1945; it belongs to ECLAC and several nonregional specialized agencies, such as the FAO, IAEA, the World Bank, ILO, IMF, UNESCO, UNIDO, and the WHO. Peru is a member of the WTO, APEC, the South American Community of Nations, the Arab Bank for Economic Development in Africa, the Andean Community of Nations, G-15, G-24, G-77, the Inter-American Development Bank, the Latin American Economic System (LAES), the Latin American Integration Association (LAIA), the OAS, and the Río Group.

Peru is part of the Nonaligned Movement and a signatory of the 1947 Río Treaty, an inter-American security agreement. The government has supported UN missions and operations in Ethiopia and Eritrea (est. 2000), Liberia (est. 2003), Burundi (est. 2004), Côte d'Ivoire (est. 2004), and the DROC (est. 1999). The country belongs to the Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL) and the Organization for the Prohibition of Chemical Weapons.

In environmental cooperation, Peru is part of the Antarctic Treaty, the Basel Convention, Conventions on Biological Diversity and Whaling, Ramsar, CITES, International Tropical Timber Agreements, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on Climate Change and Desertification.

ECONOMY

Since World War II, the Peruvian economy has developed rapidly, exhibiting a rate of growth that has been among the highest in Latin America. The strength of Peru's economy lies in the diversity of its natural resources. Silver and gold were the prized commodities of colonial Peru. In more recent times, lead, copper, zinc, iron ore, and since the late 1960s, petroleum have become important export earners. Fishing, including the production of fish meal, has become a major undertaking. Agriculture, which occupies about 4.9% of the work force, is sharply divided between two sectors: small-scale farming, producing food crops for subsistence and the domestic market, and export-oriented production.

Policies from 1960 to 1990 were aimed at social reform, but worsened and perpetuated poverty. Repeated experiments in social engineering created economic and institutional uncertainty and a prolonged decline in governance. Government spending grew steadily in the 1980s—until it collapsed in 1989—but spending in the production of public services fell. As a result, there was a steady degradation of the civil service and the provision of public goods that undermined productivity, fostered anarchy and public turmoil, and, ultimately, made poverty reduction impossible.

By 1990 per capita income was below that of 1966; political violence was claiming 3,000 lives each year; tax collections were less than 5% of GDP; and prices had increased by a factor of 27 million over three decades. In fact, Peru's economy had all but collapsed. It was the finale of 30 years of misguided policies, economic mismanagement, and since 1980, rampant and escalating terrorism.

Since 1990 and the Fujimori regime, the government has pursued a bold reform agenda. It has strengthened the authority of the state throughout the country, defeating terrorism and fighting drug trafficking. It liberalized interest rates, the exchange rate, and international capital flows. It established the independence of the central bank and eliminated credit from the central bank to the government. It increased competition by opening the economy to trade with the rest of the world and eliminating public monopolies and price controls. It improved labor market efficiency by addressing tenure regulations and establishing more flexible terms for probationary periods and fixed-term contracts. It facilitated private ownership of land and developed a vast privatization program. It eliminated the state monopoly in social security and established the framework for a private pension fund system. And it eliminated public development banks and state intervention in the allocation of credit.

Since the reform program, Peru has enjoyed macroeconomic success, but the reforms have done little to alleviate poverty. Between 1993 and 1996, Peru's economy grew by 32%, in part due to the privatization of state companies; but thousands of Peruvians lost their jobs as a result. The rate of inflation fell steadily as a result of stringent monetary and fiscal measures. It dropped from over 7,650% in 1990 to about 40% in 1993; and 4% in 2000, one of the lowest inflation rates in Latin America. The Peruvian economy grew by 7.3% in 1997, but in 1998 and 1999 growth slowed to an estimated 1.8% and 3.8% respectively. A combination of El Niño weather that hurt the fishing and agricultural industries, and the Asian financial crisis which depressed metal prices, contributed to the Peruvian economic downturn. Growth for 2000 was forecast at over 5%.

In 2004, the economy expanded by 4.8%, up from 4.0% in 2003, but down from 4.9% in 2002; in 2005, the GDP growth rate was estimated at 4.7%. These steady growth rates contrasted with the erratic development patterns displayed by Peru in previous years. The country's overdependence on minerals and metals makes its economy susceptible to world market price fluctuations. Inflation has been fairly stable, and at 2.1% in 2005 it did not pose any major problems to the economy. In the same year, the unemployment rate has reached 8.4%, and while it is not endemic, it remained a matter of concern to policy makers.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Peru's gross domestic product (GDP) was estimated at $168.9 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $6,000. The annual growth rate of GDP was estimated at 5.6%. The average inflation rate in 2005 was 2.1%. It was estimated that agriculture accounted for 8% of GDP, industry 27%, and services 65%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $860 million or about $32 per capita and accounted for approximately 1.4% of GDP. Foreign aid receipts amounted to $500 million or about $18 per capita and accounted for approximately 0.9% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Peru totaled $43.00 billion or about $1,587 per capita based on a GDP of $60.6 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 3.5%. In 2001 it was estimated that approximately 26% of household consumption was spent on food, 17% on fuel, 13% on health care, and 5% on education. It was estimated that in 2003 about 54% of the population had incomes below the poverty line.

LABOR

In 2005, Peru's labor force was estimated at 9.06 million. As of 2001 (the latest year for which data was available), 9% of the population was employed in agriculture, 18% in industry, and 73% in the services sector. In 2005, the unemployment rate in metropolitan Lima was estimated at 8.7%. However, there was widespread underemployment across the country as a whole.

About 5% of the total labor force was unionized in 2001. Although unions have played an important role in Peruvian politics in recent decades, membership has declined as the informal labor sector grows. Begun in 1944 under Communist domination, the Workers' Confederation of Peru was reorganized in 1956 as the national central labor organization, now known as the Peruvian Revolutionary Workers' Center (Central de Trabajadores de la Revolución Peruana—CTRP). In 1980, this organization was incorporated into the Democratic Trade Union Front, which also includes the Communist-led General Confederation of Peruvian Workers, the National Workers' Confederation, and the APRA-affiliated General Confederation of Peruvian Workers (Confederación General de Trabajadores Peruanos—CGTP), which dates from 1944. In 1999, the CGTP called a one-day general strike, supported by 400,000 transit workers and other public-sector employees that paralyzed normal activity in Peru's major cities.

An eight-hour day and a 48-hour week are the maximum in Peru, with a weekly day of rest mandated. Legislation has been uneven, but the law requires in most cases that employers create healthy and safe working conditions. Dangerous and night work are regulated. The civil code prohibits labor by minors under 14; nevertheless, a recent study indicated that 8% of the workforce was between the ages of 8 and 16. Peru's labor stability laws provide that after three months of employment a worker may be dismissed only for a "serious offense." As of 2002, the minimum wage was $128 a month.

AGRICULTURE

Only 4.3 million hectares (10.6 million acres), or 3.4% of the total land, was under cultivation in 2003. The area of available agricultural land per capita is one of the lowest in the nonindustrialized world. The major portion of the coastal farmland is devoted to the raising of export crops, while the sierra and the selva are used primarily for the production of food for domestic consumption. In various communities, the Inca system of cooperative labor and land use still remains; fields are communally planted and harvested, and the produce or the profits divided.

The Agrarian Reform Law (ARL) of 1969 profoundly affected the whole of Peruvian agriculture. By 1973, most of Peru, except for the rain forest on the eastern side of the Andes, was brought under the reform program. Large private landholdings were abolished. Contrary to the expectations of farm workers, however, the appropriated land was not redistributed in small individual parcels. The large estates expropriated by the government were instead reorganized into cooperatives that maintained their administrative unity and were often incorporated into still larger units, known as social-interest agricultural societies, through which they were linked on a cooperative basis. By 1980, the expropriation and redistribution of land were largely complete. Out of the nine million hectares (22.2 million acres) of cropland and pasture originally expropriated, 8.8 million hectares (21.7 million acres) were allocated to 379,000 families. In addition, 2.9 million hectares (7.2 million acres) reverted to the state, and 1.1 million hectares (2.7 million acres) were distributed to 10,706 families in the selva. The bulk of land went to cooperatives, and only about 43,000 families received land, totaling 683,000 hectares (1,688,000 acres), in the form of private holdings. The government justified this program by arguing that the supply of arable land in inhabited zones of Peru is so small that equal distribution of the land would permit an allotment of less than 0.5 hectares (1.2 acres) per rural inhabitant; that community ownership of land accords with Peruvian traditions, especially the proto-socialist Inca heritage; and that improved equipment and technique are more easily implemented in larger enterprises. As it turned out, inadequate distribution systems and lack of technical expertise limited the productivity of the cooperatives, and by 1981, about 80% of them were operating at a loss. The free market policies of President Fujimori played an important role in Peruvian agriculture during the 1990s, virtually undoing the expropriative and redistibutive policies of the ARL. In 1996, the Land Tenure Law was instituted, which was a step toward allowing land to be titled and used as collateral. The Water Law no longer ties water usage with land area, and mandates that farmers must pay for their use of water. Water is an extremely expensive commodity in the coastal valleys.

Peru's agriculture is highly diversified but not well integrated. In an irrigated section of the coastal desert lowlands, more than 1,195,000 hectares (2,953,000 acres) are cultivated with cotton, sugar, rice, soybeans, pulses, fruits, tobacco, and flowers. Modern methods are widely used in this area, and as a result, output has risen at a much faster rate than population growth. The sierra, in contrast, is relatively dormant, its lands being inferior or impractical to till. The selva contributes cocoa, fruits and nuts, tea, coffee, tobacco, and forest products.

In the 1980s, a combination of weak financing, heavy overseas borrowing, poor pricing policy, bad weather, and outmoded equipment contributed to a serious deterioration in the performance of the sugar industry. In 1996, the sugar industry's twelve collective farms were forced to change their management and ownership structure. Most had been inefficient, overloaded with administrative workers, and together owed the government $250 million in back taxes and social security payments. Some of the collective farms began to sell portions of their capital to the private sector. Staples are potatoes and corn, grown throughout Peru, but with very low yields. The leading commercial crops are rice, cotton, sugar, and barley. The principal agricultural deficiencies—wheat, livestock and meat, animal and vegetable fats, and oils—are covered by imports. Production of major crops (in thousands of tons) in 2004 included rice, 1,816; corn, 1,180; coffee, 145; wheat, 168; and beans, 83. Sugarcane and potato production in 2004 amounted to 7.9 million tons and 3 million tons, respectively.

Cultivation for illicit purposes of the coca leaf (the source of cocaine), which has long been used habitually and ritually by Andean Amerindians, has been a problem recognized by the Peruvian government and by the International Narcotics Control Board since the 1980s. The US government estimated there were 31,150 hectares (76,970 acres) of managed coca in 2003 (67% growing in the Upper Huallaga and the Apurimac valleys), the lowest level of coca cultivation in Peru since 1986. The total cocaine economy in Peru may amount to $1.2–2.4 billion annually (2–4% of Peru's GDP). Nearly all of the wealth derived from the cocaine economy accrues to narcotics traffickers and other criminal elements.

ANIMAL HUSBANDRY

The cattle, sheep, hogs, goats, horses, and poultry brought by the Spaniards to Peru were strange to the Amerindians, whose only domestic animals were the hunting dog and the American members of the camel family—the llama, alpaca, and their hybrids—which served as carriers and for food, clothing, and fuel. Only recently domesticated, the vicuña is protected by law, and limited quantities of its fine fleece are marketed. Most Amerindians of the southern highlands are herders.

The southern Andes contain the major cattle ranges. Brown Swiss, zebu, and Holstein have been imported, and agronomists are crossbreeding stock to attain herds of greater weight or of more milk on less feed. Although 16.9 million hectares (41.7 million acres), or 13% of Peru's land area, are permanent natural pasture and meadow, areas suitable for dairy cattle are few. In 2005, the livestock population included 14,009,000 sheep, 5,100,000 head of cattle, 2,900,000 hogs, and 2,000,000 goats. Living at altitudes of 10,000 ft above sea level, Peru has an estimated three million alpacas, or 80% of the world's alpaca population. There are also about 150,000 vicuñas, up from 5,000 in the 1960s. Production of alpaca hair fiber amounts to about 4,000 tons per year. Livestock output in 2005 included 152,000 tons of beef, 90,000 tons of pork, 34,000 tons of mutton, 650,000 tons of poultry, 180,000 tons of eggs, and 1,311,000 tons of milk.

FISHING

Commercial deep-sea fishing off of Peru's coastal belt of over 3,000 km (1,860 mi), is a major enterprise. Peruvian waters normally abound with marketable fish: bonito, mackerel, drum, sea bass, tuna, swordfish, anchoveta, herring, shad, skipjack, yellowfin, pompano, and shark. More than 50 species are caught commercially. There are over 40 fishing ports on the Peruvian coast, Paita and Callao being the most important centers.

The Peruvian fishing industry, primarily based on the export of fish meal, used in poultry feed, is among the largest in the world. Fish meal production in 2004/05 was 1.5 million tons; fish oil, 210,000 tons. Only 90 of the 110 fish meal plants on Peru's coast were operating in 2004. Peru's fishing sector led the world during the mid-1960s, although production since then has fluctuated radically. In the 1970s, over fishing nearly lead to the disappearance of the anchovy resource. The fish meal and fish-processing industry is managed by Pescaperú, which was founded in 1973.

The key to Peru's fishing industry in any given year is the presence or absence of El Niño; this warm ocean current displaces the normally cool waters deep in the Pacific, thereby killing the microorganisms upon which other marine life depends. The recurrence of El Niño causes the disappearance of anchoveta and a sharp fall in the catch of other species. The average annual catch during 1991–2000 was 8,515,000 tons. The total catch in 2003 was 6,089,660 tons, second highest in the world after China. That total included 5,347,187 tons of anchoveta, and 217,734 tons of Chilean jack mackerel. Exports of fish products in 2003 amounted to $1.03 billion, with fish meal accounting for 72%. The major export markets are China, Germany, Japan, and Taiwan.

To suppress invasion of their rich fishing grounds by foreign powers, Peru made formal agreements with Chile and Ecuador to extend the rights to their coastal waters out to 200 nautical mi. Violations of the proclaimed sovereignty by Argentine and US fishing fleets in 1952 and 1954 gave rise to shooting incidents. Since then, US fishing boats have occasionally been seized and fined or required to purchase fishing licenses; after eight US tuna boats were taken in November 1979, the United States retaliated by imposing a temporary embargo on Peruvian tuna.

FORESTRY

About 51% of Peru's land area, or approximately 65.2 million hectares (161.1 million acres), is covered by tropical rain forests. Most of Peru's exploitable timberlands lie on the eastern slopes of the Andes and in the Amazon Basin; the arid Pacific watershed cannot support forestlands. The trees of commercial importance on the coastal plain are amarillo, hualtaco, and algarroba (cut for railway ties and for charcoal fuel). Lumber from planted eucalyptus is used locally in the sierra for ties and for props by the mining industry. Eastern Peru, however, with its abundance of rain, consists of approximately 70 million hectares (173 million acres) of forestland (more than half the country's area), most of it uncut. A precise indication of Peru's volume of standing timber has never been ascertained. The selva contains Peru's only coniferous stand, where ulcumano is logged. Cedar, mahogany, moena, tornillo, and congona (broadleaf hardwoods) are also logged. The rain forests of the Amazon lowlands contain cedar, mahogany, rubber (wild and plantation), and leche caspi (a chewing-gum base). Commercially important are tagua nuts, balata, coca, fibers, and a wide range of medicinal plants.

Lumbering is conducted chiefly in the selva, where Pucallpa and Iquitos are the main sawmill centers. Mahogany is now the principal lumber export product, sent mainly to the United States and Europe; mahogany and Spanish cedar trees supply about half of Peru's lumber output, which falls far short of the nation's needs. In 2004, production of roundwood totaled 10,486,000 cu m (370 million cu ft).

MINING

The mining of metals was Peru's leading industry in 2003. Among the minerals exported in that year were gold, copper, zinc, lead, silver, tin, and iron. In 2003, the country's mining industry accounted for $4.6 billion or more than 51% of total export revenues, which came to $9 billion in that year. Peru was the second-largest producer of silver, after Mexico, the third-largest producer of zinc, after China and Australia, and the fourth-largest producer of lead, after Australia, China, and the United States. Peru's zinc output represented 12% of world concentrate output, almost 62% of Latin America's concentrate, and 29% of refined zinc. Other leading industries were cement, steel, and metal fabrication in 2003.

Gold output (from mines and placers) was about 172,000 kg in 2003, up from 157,530 kg in 2002. Of that total, 159,770 kg came from mines. Reserves (metal content) totaled 3.5 million tons, excluding placer deposits. The southeastern Andes had well-known gold placers on the Inambari River and its tributaries. Placer gold production, which accounted for about 14% of total gold output, was concentrated in the Inca and the Mariategui regions, and gold was also recovered from placers in rivers and streams throughout the jungle.

Copper mine output in 2003 (metal content) was 842,578 metric tons, down slightly from 844,553 metric tons in 2002. The country's copper reserves totaled 57.4 million tons (metal content). Southern Peru Copper Corp. (SPCC) remained the largest copper producer, with a total output of 326,900 metric tons of copper metal from its mine operations at the Cuajone open pits and its solvent extraction and electro winning cathode plant at Toquepala. Peru's second-largest copper producer, Compañía Minera Antamina S.A., owned the $2.3 billion copper-zinc Antamina megaproject (Huari, Ancash Department), which could become the world's third-largest producer of zinc (163,000 tons per year) and seventh-largest producer of copper (272,000 tons per year). The project included the Antamina open pit and concentrator, a 302-km slurry pipeline, port facilities in Huarmey, and a new access road, power line, and town site. The new mine had a capacity of 275,000 tons per year; the concentrator, 70,000 tons per day. Antamina's revised proven and probable ore reserves were 559 million metric tons at a grade of 1.24% copper, 1.03% zinc, 13.71 grams per ton of silver, and 0.029% molybdenum, or 1.8% equivalent copper.

Zinc mine output (metal content) was 1,372,790 metric tons in 2003, up from 1,232,997 metric tons in 2002. Mined lead output was 308,874 metric tons in 2003, up from 305,651 metric tons in 2002. Cía Minera Volcán S.A. (CMA) was Peru's largest private producer of zinc. CMA had operations in the Yauli mining district and the Paragsha property, in Cerro de Pasco. Total reserves of zinc (metal content) amounted to 16 million tons; lead, 3.5 million tons.

In 2003 Peru produced 2,921 metric tons of mined silver (metal content), up from 2,870 metric tons in 2002. Medium-sized companies accounted for three-quarters of production. Reserves totaled 36 million tons (metal content).

Production of iron ore and concentrate (gross weight) was 5,239,000 tons in 2003, up from 4,594,000 tons in 2002. Shougang Hierro Perú S.A., a subsidiary of China's Shougang Corp., continued to be Peru's sole iron ore producer. Iron ore reserves (metal content) totaled 830 million tons. Exploitation of iron ore, centered in southern Peru, was exclusively for export until the steel mills at Chimbote began operations in 1958.

The metals antimony, white arsenic, bismuth, indium, manganese, molybdenum, and tin were extracted in various parts of Peru. No cadmium or chromium was mined in 1998–2001, or in 2003, nor was any tungsten mined in 1999–2001, or 2003.

Of the 30 industrial minerals mined commercially in Peru, the most important were salt, gypsum, marble, and limestone. Peru also produced barite, bentonite, boron materials (borates), hydraulic cement, chalk, common clay, fire clay, diatomite, dolomite, feldspar, flagstone, granite, kaolin, lime, nitrogen, onyx, phosphate rock, pyrophyllite, quartz, quartzite, sand and gravel (including silica sand), marl shell, slate, sulfur, talc, and travertine. Minero Perú had proven reserves of 550 million tons of phosphate rock at its Bayóvar Project, in the Sechura Desert. The Bayóvar Project had tremendous export opportunities to the Asia-Pacific region via the port of Paita.

Peru has long been famous for the wealth of its mines, some of which have been worked extensively for more than 300 years. Through modern techniques and equipment, a vast potential of diverse marketable minerals was gradually becoming available from previously inaccessible regions. Because many of the richest mines were found in the central Andes, often above 4,300 m, their operations have been wholly dependent on the Andean Indians' adaptation to working at high altitudes. Copper, iron, lead, and zinc were mined chiefly in the central Andes, where all refining was done at La Oroya, the metallurgical center.

The government no longer had exclusive control over exploration, mining, smelting, and refining of metals and fuel minerals, although, in principle, all mineral and geothermal resources belonged to the government. The role of the government has been limited to that of a regulator, promoter, and overseer. Individuals and private companies were allowed to hold mining permits. As of 2001, the government has privatized 90% of its assets in mining, a greater rate than in any other sector, with some mining tenders still pending, and several mining prospects waiting to be privatized, which could generate $2.14 billion. The promotion of domestic and foreign private investment via a sweeping privatization process and the formation of joint ventures started off at a vigorous pace in 1991 and has continued at a slower pace. Private firms, most of which were controlled by local interests, dominated medium- and small-sized mining operations. More than 100 foreign mining companies have been established in Peru since 1990. Of the $10.02 billion of foreign direct investment in 2001, $3.32 billion was in the minerals sector, $1.67 billion of it in mining. In 2001, $1.4 billion worth of mine and facility expansions were completed, and $2.6 billion worth of mine projects were completed. In addition, $3.3 billion of investment were projected for mine projects with feasibility studies, and $1.3 billion were expected in projects with advanced exploration work. The state was expecting Minero Perú's projects pending privatization to generate $2.1 billion of investment. Mining, energy, telecommunications, and related industries were the most attractive sectors of the Peruvian economy. Privatization of Centromín, Electroperú S.A., Minero Perú, Petroperú, and the banking sector was expected to continue to generate investments in every sector of the economy, particularly in the mining and energy sectors. Future foreign investments in the minerals sector were projected to be $17 billion, the largest amount of capital committed to date, with $9.1 billion expected in the mining sector for the 2001–2009 period.

Peru was facing political upheavals, and the mining industry was increasingly on the defensive. Development of MYSA's Cerro Quilish gold deposit was stalled by the city of Cajamarca to protect its major watershed. The citizen group Coordinadora Nacional de Comunidades Afectadas por la Minería (Conacami) indicated that it had the right to participate and to be consulted on mineral policies that involved communities affected by mining operations.

The junta that came to power in 1968 pursued a steady program of nationalization. In 1971, state mining rights were assigned to the government enterprise Minero Perú. The General Mining Law of 1992 made legal procedures to obtain mining rights easier, and amendments in 1996 guaranteed protections to mining ventures and contracts. These laws have ensured more favorable exploration and production contract terms for investors. Within the framework of four 1990s laws promoting investment in mining and natural resources and dealing with foreign and private investment, more than 250 domestic "Stability and Guarantee" contracts have been signed since 1993.

ENERGY AND POWER

Peru, as of 1 January 2005, had proven oil reserves of 253 million barrels, a crude oil refining capacity of 192,950 barrels per day, and proven natural gas reserves of 8.7 trillion cu ft.

Oil production in 2004, was estimated at 94,120 barrels per day, with crude oil production accounting for 79,900 barrels per day. However, domestic oil demand averaged an estimated 161,000 barrels per day in 2004, making Peru a net oil importer. Net oil imports in 2004 averaged an estimated 66,880 barrels per day.

Natural gas production and domestic demand in 2002 were each estimated at 15.5 billion cu ft. However, Peru's Camisea project, when it does come fully on-stream, is seen as making Peru a net exporter of natural gas. September 2004 marked the first full month of production for the Camisea field, producing 3.68 billion cu ft of natural gas.

Peru's electric power generating capacity in 2002 totaled 5.912 million kW, of which hydroelectric capacity came to 2.965 million kW and conventional thermal capacity accounted for 2.940 million kW. Geothermal/other capacity accounted for 0.007 million kW. Electric power output in 2002 totaled 21.749 billion kWh, with hydroelectric generation providing the largest share at 17.860 billion kWh. Conventional thermal sources provided 3.705 billion kWh, and geothermal/other 0.184 billion kWh. Demand for electric power in 2002 totaled 20.227 billion kWh.

INDUSTRY

Manufacturing in Peru began with the establishment of consumer goods industries, which still dominate the sector. Smelting and refining are among Peru's most important industrial enterprises. As part of a long-term industrial program through hydroelectric power development, the Chimbote steel mills began to function in 1958; by 1965, capacity reached 350,000 ingot tons. A number of foundries, cement plants, automobile assembly plants, and installations producing sulfuric acid and other industrial chemicals have also come into operation. The expansion of the fish meal industry necessitated the construction of new plants as well as the establishment of many subsidiary industries: boatyards, repair and maintenance installations, and factories for the production of tinplate and cans, paper, jute nags, and nylon fishnet. Once a major guano exporter, Peru now produces synthetic fertilizers high in nitrogen and related industrial chemicals.

The country's sustained economic growth has been the result of a well diversified economic base. In 1996, the most dynamic area was agriculture, with crop production rising by 7% due to substantial increases in industrial crops like cotton, soy bean, tea, and asparagus. Other industries showing important growth during the late 1990s were the mining of metals, petroleum, and construction. In 1998, it was estimated that an average of 11 new oil wells would be drilled per year until 2003, but in 1999 oil exploration slowed when a couple of dry wells were drilled. There are five oil refineries operating in Peru, with a production capacity of 182,000 barrels per day. In 2000, a concession was signed to develop the 13 trillion cubic foot (Tcf) Camisea natural gas field, and the development of this field may lead to the establishment of a natural gas market in Peru. Growth in construction during 1998 skyrocketed by 12%, with projects related to the repair of an estimated $1 billion in El Niño damage, and road building projects. Revenues from manufacturing production fell by 3%, however, because of low agricultural production and low world metals prices. By 2003, the economy was recovering. Textile production was an increasingly important sector, as was the production of leather goods, shoes, and the Alpaca and Vicuna sectors. In 2003, it was expected that 150,000 new jobs would be created in textile manufacturing.

The industrial production growth rate in 2005 was 6.6%, higher than the overall GDP growth rate, and an indicator that industry was an economic growth engine. In 2005, industry accounted for 27% of the GDP and it employed less than 20% of the labor force. Services were by far the largest sector, with a 65% share of the economy, while agriculture was the smallest one, with an 8% share.

SCIENCE AND TECHNOLOGY

The Lima Academy of Exact, Physical, and Natural Sciences was founded in 1939. In 1996, Peru had 18 other scientific and technological learned societies and 15 scientific and technological research institutes. The Natural History Museum of the National University of San Marcos, founded in 1918, and the Geological Museum of the National University of Engineering are both located in Lima. In 1996, Peru had 34 universities that offered courses in basic and applied sciences. In 1987–97, science and engineering students accounted for 34% of college and university enrollments. According to the Industrial Law of 1982, enterprises may invest up to 10% of their income tax-free in research and development (R&D) projects approved by the National Council of Science and Technology and carried out by the national universities.

In the period 1990–2001 there were 233 scientists and engineers and 1 technician engaged in research and development (R&D) per million people. In 2002 spending on R&D totaled $138.196 million, or 0.10% of GDP. High technology exports in that same year totaled $24 million, or 2% of the country's manufactured exports.

DOMESTIC TRADE

A disproportionate amount of Peru's purchasing power is concentrated in the Lima-Callao area, where selling practices increasingly follow the pattern of more commercially developed Western countries. In the highlands, where more than 60% of the population lives, retailing is done at the market level. Only about 17% of Peruvians shop in supermarkets. The fiesta day, or weekly market, for the Andes Amerindian is an important social commercial affair, where objects made at home are bartered. Barter is also the method of exchange among the first Amerindians of the Amazon Basin. Cooperative retail outlets have been established in the large mining concerns and agricultural estates. Installment sales are increasing on vehicles, refrigerators, television sets, and agricultural and industrial equipment. Franchising has grown slowly in recent years, with US-based companies predominating. Direct market for services has become popular as well. An 18% value-added tax applies to most imported goods.

Shops and some businesses are open from 10:00 am to 1 pm, and 4 to 8 pm, Monday through Saturday. Banks transact public business from 8:30 am to 4:00 pm. Business hours are normally 9 am to 5:30 pm, Monday through Friday. In the provinces, openings and closing are usually one hour earlier.

FOREIGN TRADE

In general, Peru exports raw materials and imports capital goods and manufactures. The United States is Peru's largest trading partner, and exports include mineral fuel oil, refined silvery and jewelry, lead ore, and concentrated coffee. Main imports from the United States include cereals, refined oil, machinery parts, chemicals, and electrical machinery.

Peru's major export commodities are gold (17%), copper and its ores (15%), animal feed (13%), and zinc (8.3%). Other exports include refined petroleum products (4.0%), coffee (3.3%), refined silver (2.6%), and lead (2.4%).

In 2005, exports reached $16 billion (FOB—Free on Board), while imports grew to $12 billion (FOB). In 2004, the bulk of exports went to the United States (29.5%), China (9.9%), the United Kingdom (9%), Chile (5.1%), and Japan (4.4%). Imports included intermediate goods, capital goods, and consumer goods, and mainly came from the United States (30.3%), Spain (11.5%), Chile (7.2%), Brazil (5.4%), and Colombia (5.2%).

BALANCE OF PAYMENTS

Peru's export earnings depend heavily on world market prices in metals and fish meal. Peru maintained a favorable balance of trade from 1966 to 1973; but a surge in the price of oil imports, a decline in world copper prices, and a drop in fishing exports reversed this trend. The trade balance began to improve in 1976 and 1977, but rising interest payments kept current accounts at a loss. An austerity program was adopted in 1978; by the end of the year, Peru had reduced the deficit on current accounts, thanks in part to IMF loans. The surplus rose in 1979 and 1980 because of an extremely favorable trade performance and an additional infusion of public-sector capital. During the 1980s, however, Peru's export position was negatively affected by the worldwide recession and by lower world mineral prices, resulting in a negative trade balance, which, together with rising interest payments on the foreign debt to the IMF, led once again to an overall payments deficit. During 1990, Peru experienced a trade and capital surplus, but a deficit in the current account. Exports fell, while imports grew largely due to overvalued exchange and because government subsidies promoting exports were eliminated. With the reforms of the Fujimori government during the 1990s, trade liberalization more than doubled the overall trade volume during the decade. Unfortunately, the current account balance remained low; between 1992 and 1999 the balance of payments deficit was over 5% of GDP. In 2002, the IMF approved a two-year $316 million standby agreement with Peru.

The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing power parity of Peru's exports was $7.3 billion while imports totaled $7.4 billion resulting in a trade deficit of $100 million.

The International Monetary Fund (IMF) reported that in 2001 Peru had exports of goods totaling $7.11 billion and imports totaling $7.2 billion. The services credit totaled $1.5 billion and debit $2.3 billion.

Exports of goods and services reached $15 billion in 2004, up from $11 billion in 2003. Imports increased from $11 billion in 2003 to $13 billion in 2004. The resource balance was consequently

slightly negative in 2003 (-$18 million), and positive in 2004 ($2 billion). The current account balance followed a similar path, improving from -$935 million in 2003 to -$10 million in 2004. Foreign exchange reserves (including gold) grew to $12.7 billion in 2005, covering more than a year of imports.

BANKING AND SECURITIES

The Central Reserve Bank, the sole bank of issue, was established in Lima in 1931 to succeed the old Reserve Bank. Also created in 1931 was the Superintendency of Banks and Insurance, an agency of the Ministry of Finance, which defines procedure and obligations of banking institutions and has control of all banks. The government-owned National Bank (Banco de la Nación) not only acts as the government's tax collector and financial agent, but also is Peru's largest commercial bank. Another government agency, the Caja de Ahorros, provides secured loans to low-income borrowers. The government-owned development bank is COFIDE. There are 15 commercial banks in Peru.

Peru's banking sector has grown rapidly as a result of the economic recovery and capital inflows into the financial system. A decade ago, in 1987, the president of Peru was contemplating nationalizing the entire system. Shortly after his election, Mr. Fujimori decreed the abolition of the state's development and mortgage credit banks. Today, only COFIDE offers state-regulated development assistance, but as a second-tier bank channeling funds from other institutions and without the powers to raise financing on its own account. Along with the subsidized state development banks, a host of savings and loans cooperatives have disappeared, victims of financial mismanagement, hyperinflation, and embezzlement. With them went the savings of many lower and middle-class Peruvians, who have been left with a distrust of the financial system.

Financial operations and assets remain concentrated: four banks account for over 60% of all loans, and almost three-quarters of all deposits in the system. During 1997, commercial bank loan portfolios grew by approximately one-third. Total assets of the banking system amounted to $18.8 billion in 2001. Peru is severely under banked. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $6.1 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $17.4 billion. That year, the discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 14%.

The privately owned Lima Stock Exchange (Bolsa de Valores de Lima—BVL) regulates the sale of listed securities. Securities exchanges actually began in Lima in 1860, but the stock exchange in its current form was founded in 1971. There was a long bull run in 1992 as the economy stabilized after the coup and progress towards pacification was made. After falling by 27% in 1999 and 34% in 2000, the dollar value of the index dropped only 2.6% in 2001. At the end of 2001, 207 companies were listed on the BVL, and the market capitalization was $11.1 billion. As of 2004, there were 194 companies listed on the BVL, which had a market capitalization of $20.115 billion. In 2004, the IGBVL Index rose 52.4% from the previous year to 3,710.4.

INSURANCE

Insurance companies are controlled through the Superintendency of Banks and Insurance of the Ministry of Finance. According to a law of 1952, branches controlled by foreign insurance companies may not be established in Peru, although foreign insurers may operate through Peruvian subsidiaries in which they hold only minority interest. A majority of stockholders and directors of locally incorporated stock companies must be Peruvian nationals. The National Bank assumes exclusive control of all foreign reinsurance operations, as well as the writing of export credit insurance. In 2003, a total of $873 million in direct premiums were written, with $507 million of the total comprised of nonlife and $366 million of the total was life insurance. For that same year, Peru's top nonlife insurer was Rimac Internacional, which had gross written nonlife premiums of $174.5 million, while the country's leading life insurer, El Pacifico Vida, had gross written life insurance premiums of $94 million. Worker's compensation and employees' life insurance are compulsory.

PUBLIC FINANCE

The central government publishes an annual budget representing the government's consolidated accounts (including budgetary and extrabudgetary transactions). Indirect taxes, including import and export duties, constitute the major source of government revenues. In the early 1970s, the number of state enterprises increased rapidly, which led to increased public-sector spending. As the revenues from state enterprises lagged behind expenditures, the budget deficit increased to about 10% of GDP during 1975–77, as compared to 1.7% during 1970–72. As a result of a fiscal stabilization program, the deficit was reduced to 6.5% of GDP in 1978, and to 2.5% in 1985. In 1990, the Fujimori administration began to pursue tighter fiscal policies and attempted to avoid domestic financing of the deficit. The consolidated public sector deficit, which in 1990 was 6.5% of GDP, fell to 2.5% by 1992, despite the suspension of most foreign financing after the 5 April 1992 coup.

The IMF program allowed a foreign-financed deficit of 2.9% of GDP in 1993 for increased social sector spending and investment in infrastructure. However, with lower than expected foreign financing and tax collection, the deficit that could be maintained while meeting the public sector external debt obligations was only equivalent to about 2% of GDP. The privatization of state enterprises fattened the government's coffers between 1992 and 2000. The budget deficit for 2000 was 2.5% of GDP due to a rise in public sector wages of 16%, and lower-than-expected revenues from privatization that year.

The US Central Intelligence Agency (CIA) estimated that in 2005 Peru's central government took in revenues of approximately $21.8 billion and had expenditures of $22.4 billion. Revenues minus expenditures totaled approximately -$600 million. Public debt in 2005 amounted to 41.8% of GDP. Total external debt was $30.18 billion.

The International Monetary Fund (IMF) reported that in 2003, the most recent year for which it had data, central government revenues in millions of nuevos soles were 34,742 and expenditures were 38,542. The value of revenues in millions of US dollars was $9,988 and expenditures $6,645, based on a market exchange rate for 2003 of 3.4785 as reported by the IMF. Government outlays by function were as follows: housing and community amenities, 0.4%; health, 12.6%; education, 6.7%; and social protection, 40.2%.

TAXATION

The basic corporate tax rate is 30%. However, incentives are available to investments made in mining, oil and gas licensing, and services contracts, for investments in manufacturing located in jungle areas, in tax-free zones, and in border areas. Capital gains are generally taxed as income at the corporate rate. Also, a special regime for small businesses and for some low-income companies imposes a monthly income of 2.5%. There is also a 4.1% tax on the distribution of dividends to nonresidents and individuals. However, dividend payments are not taxed if they are made between resident companies. Foreign dividends are part of taxable income. Branches of foreign companies are subject to the same taxes as Peruvian companies.

The personal income tax is charged at progressive rates of 15%, 21%, and 30%. Various deductions and allowances reduce the individual's taxable income. 20% of the salary and wages paid by a company to its employees is tax-exempt.

The main consumption tax is Peru's value-added tax (VAT) with a standard rate of 19%, of which 2% goes to the local level as a municipal promotion tax. Exports of goods, services, and chattels are exempt for VAT. Other taxes include excise, social security, healthcare pension fund, and profit-sharing taxes.

CUSTOMS AND DUTIES

Import licenses are not required on most products. Ad valorem duties are levied at 4% (on 23% of products), 12% (on 45% of products), or 7% (on 15% of products, especially textiles, footwear, and some agricultural products) of CIF value (cost, insurance, and freight). The remaining items are assessed duties ranging from 17–20%. Tariffs range from a total of 4–20%, averaging 11.6%.

Export processing free zones offer investors exemptions from customs duties for imports and exports. Peru does not adhere to the common external tariff of the Andean Community, but is a member of the group, which opened a free trade zone with MERCOSUR in 2000.

FOREIGN INVESTMENT

The British were the first to gain prominence as investors in Peru, when they took power of the railways in payment of debt to Peruvian bondholders in 1890. They developed oil fields and a long distance telephone and cable service. In the mid-1950s, Swiss, German, and Canadian interests became active in the transportation and communication services. Private US interests ventured capital and technical aid to all sectors, especially the oil and mining industries. The fishing industry from the beginning was fostered by the United States. Private companies operated tuna fleets in Peruvian waters, as well as canneries.

Between 1959 and 1961, following passages of industrial development laws and the signing of an investment guarantee treaty with the United States, under which private US investors could obtain federal risk insurance against currency inconvertibility, total foreign investment almost doubled, rising from $686 million to $1,274 million. US investments continued their rapid growth rate until the 1968 coup, after which Peru's military rulers pursued a nationalist course, characterized by selective expropriation of foreign-held interests in sectors such as mining, finance, and infrastructure. In addition, a variety of strictures were placed on the uses of foreign capital, as well as on the relative proportion of foreign-to-local control. US-linked firms were the hardest struck by these measures, causing a strain in relations. In February 1974, a US-Peruvian agreement provided a compensation schedule for properties taken over during 1968–73. At the end of 1973, the US investment column stood at $793 million, less than half of the total a decade earlier. Private investments in the 1970s continued to lag, although some new funding was being advanced in mining and petroleum. From 1977 through 1980, net direct capital investment totaled only $177 million, or less than the total for 1981 ($263 million), the first year after the restoration of civilian rule. In 1984 and 1985, after the economic slump, net direct investment was $89 million and $53 million, respectively.

After 1980, the official attitude toward foreign investment changed substantially. The 1979 constitution guarantees protection of private property, whether Peruvian or foreign, and permits foreign jurisdiction for international financial contracts. The agency responsible for foreign investment is the National Commission of Foreign Investment and Technology (Comite Nacional de Inversion Extranjera y Tecnologia, or CONITE). In late 1986, the Andean Group relaxed its regulations on foreign investment; this change was expected to benefit Peru. About 1,000 foreign companies were represented in Peru in the 1980s, either directly or through subsidiaries or affiliates.

The trade and investment climate in Peru improved significantly after President Fujimori assumed office in July 1990. Foreign investor confidence in Peru should be maintained with Fujimori as the key element in sustaining capital inflows. The Foreign Investment Promotion Law and the Framework Law for Private Investment Growth outlined the government's support for privatization and foreign investment in 1991. From 1991 to 1997, privatization sales totaled over $7 billion, most of which came from foreign investors. There are no restrictions on remittances, but there is a mandatory affirmative action program for Peruvian employees. Activities in export processing zones are tax and customs duty exempt for 15 years.

In 1998, total foreign direct investment (FDI) stock totaled about $7.3 billion. FDI inflow to Peru in 1998 was over $1.8 billion, up from nearly $1.7 billion in 1997, and then peaked at $2.3 billion in 1999. Due mainly to political turmoil and uncertainty in the country, FDI flows to Peru fell to $681 million in 2000. In 2001, FDI flows increased to $1.1 billion, and in 2002 were approximately $2 billion. The major sources of FDI have been Spain (particularly in telecommunications), the United States, and the United Kingdom (in the energy and industry and mining sectors). Cumulative FDI as of 2002 was over $10 billion.

In 2004, the stock of FDI was $12.6 billion, up from $12.46 in 2003. Most of the investments went to communications (29%), industry (14.7%), finance (14.7%), mining (13.5%), and energy (13%). In June 2004, PetroPeru was excluded from the privatization list by a congress law, and it was authorized to conduct exploration and production activities. A series of major mining and energy projects (the Camisea natural-gas field being one of the most important ones), were likely to attract important investors from abroad.

ECONOMIC DEVELOPMENT

After World War II, President Odría discontinued import licensing and certain price controls and enacted the Mining Code of 1950, the Petroleum Law of 1952, and the Electrical Industry Law of 1955, all with a view to reassuring sources of foreign and domestic capital of reasonable taxation and an adequate rate of earnings under liberal exploitation concessions. Given this stimulus to capital ventures, the economy expanded, and new exports, such as iron and coal, were developed.

After the coup of 1968, Peru's military rulers sought a profound restructuring of the country's economic life. The overall objectives were the establishment of effective state control of natural resources; redistribution of foreign participation; creation of manageable balance among governmental, private, and foreign sectors; and redistribution of productive sources more broadly throughout the population. Nationalization, coupled with a redistribution of ownership and management authority in major enterprises, was the cornerstone of the new policy from its incipient stages in 1968 through 1975. A five year plan was announced in December 1968, emphasizing a reorientation from an agricultural to an industrial economy and stressing the expropriation of large estates, with redistribution of land to peasants in the sierra. In early 1969, tax and credit incentives for the formation of cooperatives and the consolidation of smaller landholding were enacted. In nonagricultural sectors, the government began, in 1969, selective nationalization of major foreign holding in the mining, petroleum, and infrastructure sectors. In several areas, a government presence was asserted through the creation of state-owned commercial enterprises, the most notable of which included Induperu, in industry; Mineroperu, in mining; Pescaperu, in fishing; Petroperu, in petroleum; Entelperu, in telecommunications; and COFIDE (Corporacion Financiera de Desarrollo), in investment.

Industrial enterprises in general were required to adopt profit-sharing and co-ownership schemes for their employees. Although strict limits were placed on foreign participation in Peruvian industry, such investments were not ruled out in principle, and in 1974, the government acted to guarantee fair settlement for US holdings expropriated during 1968–73.

In the mid-1970s, the regime began to moderate the rigid price control system instituted in its formative years. The prices of petroleum and basic consumer goods were increased, while wage increases were fixed and agricultural subsidies removed. In September 1975, the sol was devalued and financial controls were imposed to help stem inflation (reaching 40% in 1975) and to ease the trade imbalance. The Tupac Amaru Development Plan, announced in 1977, limited the structural reforms of the Inca Plan, calling for economic decentralization and encouragement of foreign investment.

In the late 1970s, a number of state-controlled enterprises were sold, and worker participation was curtailed. The civilian leaders who came to power in 1980 sought to reduce government participation in the economy and to improve the efficiency of state enterprises. Import tariffs and export taxes were reduced, and a new investment program for 1980–85 emphasized power and irrigation projects and the construction of housing and health care facilities. These attempts to revitalize the economy were hampered by the worldwide recession and by the soft market of Peru's commodity exports. In response, the García Administration reverted to an interventionist policy, imposing import controls and regulating foreign-exchange availability, as well as influencing the financial sector by threatening to nationalize the banks.

On 28 July 1974, the government announced its Inca Plan (which may actually have been drawn up before the 1969 coup), a master plan that envisioned eventual transformation of all economic entities along prescribed socialist lines. Three types of enterprises were to be permitted to operate in Peru: state-owned enterprises, worker-owned collectives (industrial communities), and social-property companies (entities managed by workers but financed by the state).

In late 1975, the Central Bank set up a line of credit to aid the formation of social-property companies through the National Fund for Social Property. The Agrarian Bank, which had been created in July, was authorized to handle the credit requirements of the reorganized agricultural sector, as well as to ease the transformation of cooperatives and farmers' associations, many of which had existed for only a few years, into social-property entities. The order of priorities for industry placed basic industries—notably steel, nonferrous metals, chemicals, fertilizers, cement, and paper—at high rung, followed by manufacturers of capital good, such as machine tools, and industrial research. Reinvestment of profits was stressed throughout.

The decade of the 1990s, with an administration in favor of a market economy, attracted more investment into Peru's economy. With foreign capital flowing, Peru was poised for economic recovery. Privatization and the rapidly growing economy were providing the government with funds to spend on infrastructure and social programs.

In August of 1990, the government implemented an economic program based on (1) an economic stabilization plan, (2) a structural reform program and (3) a set of initiatives aimed at reintegrating the Peruvian economy into the international economic system. As a direct result economic growth in the 1990s was quite strong.

The economic stabilization plan focused on achieving an inflation rate comparable to international levels, and to foster an environment favorable for savings, investment and sustained economic growth. The plan was based on strict fiscal discipline in accordance with an austere monetary policy. The inflation rate was about 6% in 1999. Structural reforms resulted in capital amounting to $7 billion between 1991 and 1999, resulting in a massive inflow of foreign investment. The reinsertion of Peru into the international financial system, beginning in 1991, was intended to restore normal relations between the country and its international creditors. Peru normalized its relations with multilateral bodies, the Paris Club, and with commercial banks.

Upon being elected in 2001, President Toledo implemented an economic recovery program, to revive an economy that had stagnated from 1998–2001. He took measures to revive the privatization program and to attract investment. The production, refining, and distribution of coca engages approximately 200,000 Peruvians, but the government has taken steps to curtail the narcotics industry. These include promoting alternative development programs in coca-growing areas, in order to convince coca farmers not to grow the crop.

In 2002, the International Monetary Fund (IMF) approved a two-year $347 million Stand-By Arrangement with Peru, to support the government's plans for economic recovery and a lowered rate of inflation.

The consistent economic growth was likely to continue in 2006 and 2007, although at more moderate rates. The growth was expected to be fueled by higher consumption rates, which in turn would be positively influenced by consumer confidence and employment growth in export-oriented industries. A series of planned public development projects were expected to trigger a boom in the construction industry, which would also be reflected in the overall growth pattern of the country.

SOCIAL DEVELOPMENT

A modern system of social security (referred to as SNP) has evolved from initial legislation provided in the 1936 constitution. Coverage and benefits were substantially broadened after the 1968 coup. Workers were entitled to receive benefits covering disability, medical attention, hospitalization, maternity, old age, retirement, and widows and orphans. In 1991, the government introduced a new system of individualized capitalization through private pensions (SPP), which exists along side the national social security system.

Social insurance is compulsory for all employees up to the age of 60. The national social security and pension funds (SNP) are endowed by 13% of employee earnings, with the balance of funds supplied by the government. The private system is funded entirely by contributions from employees amounting to 10% of earnings. Sickness and maternity benefits are funded by 9% of employer payroll, with a special credit for employers who use the newer private system. Working mothers are entitled to maternity leave of 90 days at 100% pay. A funeral grant is provided.

Women are often kept from leadership roles in the public and private sectors by the force of tradition, although they are equal under the constitution. A government-supported program to provide credit to female entrepreneurs encourages women to pursue ventures. Racial and sexual discrimination are specifically prohibited by law in hiring, but in practice it continued to occur. Sexual harassment continued despite new legislation adopted in 2003. Domestic abuse and violence against women is a widespread problem which is exacerbated by insensitivity on the part of authorities, although there are some special police stations staffed by women to assist female victims of violence.

Human rights violations have been committed by the government and terrorist groups. There are restrictions on freedom of speech and of the press. Prison conditions are poor and the physical abuse of prisoners is common. The native population of the Amazon region continued to suffer discrimination.

HEALTH

Although Peru has made significant advances toward reducing epidemic disease, improving sanitation, and expanding medical facilities, much remained to be done. Approximately 77% of the population had access to safe drinking water and 76% had adequate sanitation. Health services are concentrated around metropolitan Lima. A health care plan initiated in 1981 called for the establishment of 100 health centers in rural areas and shantytowns. The central administration of all health services lies with the Ministry of Health. A General Health Law enacted in 1997 restructured and reformed the health care sector. As of 2004, there were an estimated 117 physicians, 67 nurses, and 11 dentists per 100,000 people. Total health care expenditure was estimated at 6.2% of GDP.

The infant mortality rate in 2005 was estimated at 31.94 per 1,000 live births. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 23.3 and 5.8 per 1,000 people. Maternal mortality was high at 265 per 100,000 live births. Some 69% of married women used contraception during 2000. Average life expectancy in 2005 was estimated at 69.53 years.

Leading causes of death included acute respiratory infections, intestinal infectious diseases, circulatory system and cardiovascular disease, and tuberculosis. Serious vitamin A deficiency was documented in 22% of children ages four and under and an estimated 48% of all children aged six to nine suffering from malnutrition. Goiter rates in school-age children were high.

Peru has repeatedly reported the highest number of yellow fever cases in the Americas. Other common diseases included malaria and tuberculosis. Immunization rates for children up to one year old were: tuberculosis, 98%; diphtheria, pertussis, and tetanus, 98%; polio, 97%; and measles, 95%.

The HIV/AIDS prevalence was 0.50 per 100 adults in 2003. As of 2004, there were approximately 82,000 people living with HIV/AIDS in the country. There were an estimated 4,200 deaths from AIDS in 2003.

HOUSING

Successive governments since the 1950s have recognized the importance of slum clearance and public housing programs in combating disease and high mortality rates. Most housing development programs carried out by the government and by private enterprise have been in the Lima area. In Lima and other towns, several "neighborhoods" (unidades vecinales) have been completed through government efforts since the early 1960s. Each such housing complex is designed to be a self-sufficient community. A typical neighborhood is built to house 6,000 persons at moderate rentals.

One of the revolutionary government's early decrees gave the Housing Bank control over financing low-cost housing. Construction grew rapidly during 1970–73, to the point of depleting local cement supplies.

In 2002, there were about 6 million dwelling units nationwide. About 88.7% of all units were single-family detached houses. Rapid urbanization has resulted in housing shortages in urban areas. Shanty towns called pueblos jovenes have developed in these areas as families build temporary structures out of straw mats, scrap wood, and other disposable materials.

EDUCATION

The government has been responsible for public education since 1905; free secondary education began in 1946, but with far too few public schools to meet the need. In March 1972, new education legislation enhanced the central authority of the Ministry of Education, granting the government control over all teaching appointments in the public schools and increasing its authority over the private sector. The legislation provided for adult literacy instruction and instituted the concept of a fully staffed six-grade "nuclear" school to serve the rural population. The 1972 law also established Quechua and Aymará as languages of instruction for non-Spanish-speaking Amerindians, especially in the lowest grades.

Education is compulsory for 12 years, including one year of preprimary education. Primary school covers six years and is followed by two years of general secondary school. Students then attend either a three-year general academic secondary school (studying either arts or sciences) or a three-year technical school. Students planning to enter university may take an additional year of preparatory studies, but this is not an entry requirement. The academic year runs from April to December

In 2001, about 50% of children between the ages of three and five were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 100% of age-eligible students. The same year, secondary school enrollment was about 69% of age-eligible students. Nearly all students complete their primary education. The student-to-teacher ratio for primary school was at about 25:1 in 2003; the ratio for secondary school was about 19:1. In 2003, private schools accounted for about 13.7% of primary school enrollment and 17.3% of secondary enrollment.

There is a national university in virtually every major city; the oldest is the National University of San Marcos of Lima, originally founded in 1551. The National University of Engineering and the National University of Agriculture are specialized governmental institutions. The University of San Cristóbal de Huamanga in Ayacucho, founded in the 17th century, was reopened in 1960 and offers mainly technical training. Peru's hard-pressed universities can accept only a fraction of each year's applicants. As of 2005, the government was in the process of organizing a university for the indigenous people of the Northern Amazon region. This school would offer course in such fields as forestry management and medicinal plants, with classes conducted in indigenous languages. In 2003, about 32% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 87.7%, with 93.5% for men and 82.1% for women.

As of 2003, public expenditure on education was estimated at 3% of GDP, or 17.1% of total government expenditures.

LIBRARIES AND MUSEUMS

The National Library in Lima, with 736,000 volumes, is the largest in Peru. More than 450,000 volumes may be found in the various libraries of the University of San Marcos. The library at the National University of San Augustín at Arequipa contains over 430,000 volumes. The library at the Pontifical Library has over 350,000 items. There are nearly 200 public libraries in Peru, the largest of them in Callao, Arequipa, and Lima.

Peru has endeavored to restore and maintain the aesthetic and historical evidences of its pre-Columbian and colonial civilizations in more than 250 public and private museums. The City Hall in Lima contains a full record of the city's official acts since its founding. The Cathedral of Lima, with its silver-covered altars and carved stalls, contains priceless historical, and religious relics. A chapel near the entrance contains the alleged remains of Francisco Pizarro. Two colonial residences, the Palacio Torre Tagle and the Quinta de Presa, have been maintained to exhibit antiques and to serve as examples of the architecture of traditional Lima. There is no law protecting old houses, however, and many have been removed to make way for new downtown buildings. Some have been privately restored, such as the headquarters of the Association of Amateur Artists, the Institute Riva Aguero, the Associated Electrical Companies, the Bullfight Museum, and the Oquendo Mansion. In the Quinta de Presa is a museum with the possessions of the actress La Perricholi, the famous favorite of the 18th-century Viceroy Amat.

At Pueblo Libre in Lima are the National Museum of Archaeology and Anthropology, with exhibits of pre-Columbian civilizations, and the Museum of the Republic, a historical museum. The Rafael Larco Herrera Museum in Lima (housing the former collection of the Chiclín plantation near Trujillo) is a private museum with a vast collection of notable antiquities from the pre-Inca Chimú culture. The University of Trujillo has a museum with specimens of early Peruvian cultures. Lima's Museum of Art exhibits Peru's national art from the pre-Columbian era to the contemporary period. There are regional museums throughout the country, including the Frederico Galvez Durand Archeological Museum in Huancayo featuring artifacts from the Nazca peoples.

MEDIA

Peru's major telecommunications systems were developed privately by Swedish, US, and Swiss enterprises. In 1970, however, the government nationalized the Lima Telephone Co. and announced plans to take over the entire telecommunications system through its wholly owned company Entelperú. A joint Peruvian-Chilean firm operates a system in southern Peru and Arica, Chile. In 2003, there were an estimated 67 mainline telephones for every 1,000 people; about 33,000 people were on a waiting list for telephone service installation. The same year, there were approximately 106 mobile phones in use for every 1,000 people. The government's Bureau of Mails and Telecommunications operates the domestic telegraph system, using radio to reach communities not served by land lines.

In 2004, there were 65 radio stations and 2 news channels on 2 commercial cable systems in the Lima area. There are many privately owned provincial stations. The government owns only one radio station and one television network. In 2003, there were an estimated 269 radios and 172 television sets for every 1,000 people. About 16.6 of every 1,000 people were cable subscribers. Also in 2003, there were 43 personal computers for every 1,000 people and 104 of every 1,000 people had access to the Internet. There were 129 secure Internet servers in the country in 2004.

The leading Lima dailies—among them El Comercio (2004 circulation 120,000), Ojo (40,000), and Expreso (50,000)—are the most important newspapers and are flown daily to provincial towns. Other major papers from Lima include Aja (120,000), El Bocon (90,000), and La Republica (50,000). The official government paper is El Peruano (27,000), a daily gazette in which laws, decrees, and brief government announcements are published. Special-interest periodicals are published by learned societies, agricultural groups, and business associations.

During the period of military rule between 1968 and 1980, the press in Peru was under strict government control. The law provided severe penalties for criticizing government officials and required newspapers to publish reports from the president and cabinet ministers. When civilian rule returned in 1980, the press was returned to private control. However, freedom of the press was again restricted during the political crackdown by President Fujimori in April 1992, and journalists have been arrested by the government. As of 1999, journalists were subject to harassment and intimidation, and practiced self-censorship. The government is said also to exert control over the media through the purchasing of advertising to promote government views and pro-government opinion.

ORGANIZATIONS

The national Society of Industries, founded in 1896, coordinates the branches of organized industry. The Office of Small Industry and the Institute for the Development of Manual Arts were established in 1946 to revive the weaving and spinning skills of Incas and to coordinate the handicraft workers in textile and other industries, such as gold and silver crafts. Numerous chambers of commerce continued to function.

Of Peru's many learned societies, perhaps the most important is the Academia Peruana, affiliated with the Royal Spanish Academy of Madrid. Others include the Peru Association for the Advancement of Science and the Geographic Society of Lima. There are several professional associations dedicated to research and education for specific fields of medicine and particular diseases and conditions.

National youth organizations include the National Association of Scouts and Guides, the Federation of Peruvian Students, Junior Chamber, and YMCA/YWCA, as well as a number of religious youth groups. Sports associations offer encouragement for amateur competition in such pastimes as badminton, squash, and track and field.

The Latin American and Caribbean Committee for the Defense of Women's Rights has an office in Lima. International organizations with national chapters include Amnesty International, UNICEF, the Society of St. Vincent de Paul, Habitat for Humanity, CARE Peru, and the Red Cross.

TOURISM, TRAVEL, AND RECREATION

As part of a program to encourage foreign tourism, the government has built and manages, through its Peruvian Hotel Co., several hotels or inns and a variety of tourist services. To help increase foreign exchange earnings from tourism, Peru consolidated all government agencies dealing with tourism into an autonomous corporation in 1964. The Fund for the Promotion of Tourism was established in 1979.

Tourists, as well as scholars, are especially drawn to the wealth of archaeological remains on the coast and in the sierra. Chan Chan, the center of the Chimú civilization, stands in adobe ruins near Trujillo. The ruins of the 9th-century coastal city of Pachacamac are just south of Lima. Inca ruins may be seen at Cuzco, Sacsahuamán (on the northern edge of Cuzco), Ollantaytambo, and Machu Picchu, as well as on Lake Titicaca islands.

The northern coastal waters are famous for big-game fishing, and the abundant resources of the sierra waters are maintained by fish culture stations. Lakes and streams have been stocked with trout throughout Peru. In Lake Titicaca, trout average 10 kg (22 lb); trout weighing as much as 21 kg (46 lb) have been caught. Other tourist attractions include beaches and water sports; several state parks offer mountain climbing, cross-country skiing, and white-water rafting. The most popular sports are football (soccer), baseball, basketball, and bullfighting. Fiestas, especially the annual celebrations of patron saints, include both Catholic and Indian rites; bands of musicians, or conjuntos, are an important part of each fiesta.

There were 933,643 visitors who arrived in Peru in 2003, of whom 67% came from the Americas. Hotel rooms numbered 123,252 with 213,829 beds. The average length of stay was two nights. A US passport is required along with an onward/return ticket. Visas are only required for visitors from Cuba, Iran, Iraq, Kuwait, Bulgaria, Russia, Pakistan, India, and China. The presence of yellow fever in the area may require a certificate of vaccinations against the disease.

In 2004, the US Department of State estimated the daily cost of staying in Lima at $215; in Cuzco, $204; and in Paracas, $158.

FAMOUS PERUVIANS

The Inca Huayna Capac (1450?–1525) reigned from 1487 and extended the Inca Empire, encouraging public works and fine arts. On his death he left the empire to his two sons, Huáscar (1495?–1533) and Atahualpa (1500?–1533); Huáscar was executed by his half-brother, and Atahualpa, the last of the great Incas, was executed by the Spanish conquistador Francisco Pizarro (1470?–1541). Acknowledged as America's first great writer, Garcilaso de la Vega (El Inca, 1539?–1616), son of a Spanish conquistador and an Inca princess, preserved in his Royal Commentaries of the Incas authentic descriptions of this ancestral empire and its traditions. Manuel de Amat (fl.18th century), viceroy from 1762 to 1776, was a patron of the colonial theater and of the famous actress Micaela Villegas, known as La Perricholi. Tupac Amaru II (José Gabriel Condorcanqui, 1742–81), partly descended from the Incas, led a revolt against Spanish rule in 1780 in which he was defeated, captured, and executed.

Dr. José Hipólito Unnúe (1758–1833), a statesman and scientist, founded Lima's medical school in 1808 and reformed Peruvian education. The hero of the War of Independence, Mariano Melgar (1792–1815), was also a poet and composer whose regional songs (yaravís) are still popular. Marshal Ramón Castilla (1797–1867) distinguished himself in two great presidential terms (1845–51, 1855–62), introducing railways and the telegraph, emancipating the slaves, abolishing Amerindian tribute, modernizing Lima, and developing the important guano industry. Ricardo Palma (1833–1919) is considered Peru's greatest literary figure; a critic, historian, and storyteller, he originated the genre called tradición, and wrote the 10-volume Tradiciones Peruanas. José María Valle-Riestra (1858–1925) was an important composer.

In the modern era, the work of an erudite Amerindian, Julio Tello (1880–1947), became internationally known in archaeological circles. Jorge Chávez (1887–1910) made the first solo flight across the Alps in 1910. Santos Chocano (1875–1934), César Vallejo (1895–1938), and José María Eguren (1882–1942) are considered Peru's finest modern poets. Established prose writers are Víctor Andrés Belaúnde (1883–1966), Jorge Basadre (1903–80), and Ciro Alegría (1909–67); the novelist Mario Vargas Llosa (b.1936) was the first Latin American president of PEN, an international writers' organization. Peru's best-known contemporary painter is Fernando de Szyszlo (b.1925). Other noted Peruvians include Ventura García Calderón (1866–1959), a writer; José Sabogal (1888–1956), a painter; Honorio Delgado (1892–1969), a scientist; and José Carlos Mariátegui (1895–1930), a political essayist. Yma Sumac (b.1928) is an internationally known singer.

Víctor Raúl Haya de la Torre (1895–1979) originated APRA in 1924 as a Latin American workers' movement; it became Peru's most significant political force. Gen. Juan Velasco Alvarado (1910–77), who led the military coup of 1968, ruled as president of Peru until his own ouster by a bloodless coup in 1975. Gen. Francisco Morales Bermúdez Cerruti (b.1921), president during 1975–80, prepared the country for a return to civilian rule. Fernando Belaúnde Terry (1913–2002), founder of the Popular Action Party, served as president during 1963–68 and again during 1980–85. Alán García Pérez (b.1949) was elected president in 1985. Alberto Fujimori (b.1938), was president from 1990 to 2000: once out of office, Interpol issued an international arrest warrant for Fujimori on charges including crimes against humanity, murder, and kidnapping, and President Alejandro Toledo (b.1946) lodged an extradition request with the Japanese government (where Fujimori had fled) in 2003. In 1982, Javier Pérez de Cuéllar (b.1920) became secretary-general of the UN.

DEPENDENCIES

Peru has no territories or colonies.

BIBLIOGRAPHY

Alexander, Yonah (ed.). Combating Terrorism: Strategies of Ten Countries. Ann Arbor, Mich.: University of Michigan Press, 2002.

Calvert, Peter. A Political and Economic Dictionary of Latin America. Philadelphia: Routledge/Taylor and Francis, 2004.

Ferreira, Cesar. Culture and Customs of Peru. Westport, Conn.: Greenwood Press, 2003.

Garcia, Maria Elena. Making Indigenous Citizens: Identities, Education, and Multicultural Development in Peru. Stanford, Calif.: Stanford University Press, 2005.

Garretón, Manuel Antonio, and Edward Newman, (eds.). Democracy in Latin America: (Re)constructing Political Society. New York: United Nations University Press, 2001.

Health in the Americas, 2002 edition. Washington, D.C.: Pan American Health Organization, Pan American Sanitary Bureau, Regional Office of the World Health Organization, 2002.

Herndon, William Lewis. Exploration of the Valley of the Amazon,1851–1852. New York: Grove Press, 2000.

Herz, Monica. Ecuador vs. Peru: Peacemaking amid Rivalry. Boulder, Colo.: Lynne Rienner, 2002.

Higgins, James. Lima: A Cultural and Literary History. Oxford: Signal, 2004.

Silverblatt, Irene Marsha. Modern Inquisitions: Peru and the Colonial Origins of the Civilized World. Durham, N.C.: Duke University Press, 2004.

Thoumi, Francisco E. Illegal Drugs, Economy and Society in the Andes. Washington, D.C.: Woodrow Wilson Center Press, 2003.

PERU

Republic of Peru

República del Perú

COUNTRY OVERVIEW

LOCATION AND SIZE.

Peru is located on South America's central Pacific coast. The world's twentieth-largest nation, it borders Bolivia, Brazil, and Chile to the east and south, and Colombia and Ecuador to the north. Lima, the capital, is located on the central coast. Peru's 1,326,074 square kilometers (512,000 square miles) make it roughly the size of Alaska. Lima is approximately the size of Rhode Island.

Peru is divided into 3 distinct geographic regions with a narrow, arid coast, steep Andes Mountains running north to south, and the Amazon jungle in the east. The Amazon covers 57.6 percent of the nation's territory, representing 13.2 percent of the Amazon forest and 7.3 percent of the world's rainforest. The Amazon River system, the world's largest, holds 20 percent of the planet's fresh water. The coastal region represents 10.6 percent of the nation's territory and the highlands 31.8 percent. Its distinctive geography gives it 84 of the 104 known ecosystems and 28 of the 32 known climate zones, making Peru one of the world's most ecologically diverse nations, according to the United Nations Development Program (UNDP).

POPULATION.

The population currently stands at 27 million and is growing by 1.75 percent annually, according to estimates for 2000. The birth rate is an estimated 24.48 per 1,000, while the death rate is 5.84 per 1,000. Life expectancy in 2000 was 70 years.

The Peruvian population is extremely young, with 53.8 percent of the population below the age of 25. Only 4 percent of the population is over 65. The majority of Peruvians live in urban areas along the coast, which reflects the general migratory trend in Latin America over the past 60 years. In 1940, 65 percent of the population lived in the highlands, while only 28.3 percent lived along the coast. Today, 52.2 percent live along the coast, 35.7 percent live in the highlands, and 12.1 percent live in the jungle region. Lima is the largest city, home to nearly 8 million people. The second largest city, Arequipa in the southern highlands, is home to 700,000 people.

The largest population group is Amerindian, accounting for 45 percent of the population. The principal Amerindian groups are Quechua and Aymara highland indigenous people. Lowland indigenous groups, representing roughly 350,000 people, are divided into 52 different peoples, the largest of which is the Ashaninkas. Mestizos—mixed Amerindian and Caucasian—represent 37 percent and whites account for 15 percent. The remaining 3 percent of the population is formed principally of blacks, Chinese, and Japanese—descendants of people brought over as slaves or indentured servants. In 2000, Chinese-Peruvians celebrated the 150th anniversary of their arrival in Peru, while the Japanese community celebrated its 100th anniversary.

Peru adopted an aggressive family planning program in 1995, which former President Alberto Fujimori announced at the United Nations Women's Summit in Beijing that same year. The plan included free access to birth control and a nationwide education campaign. The Ministry of Women and Human Development was created at the same time. The plan, however, was attacked for employing forced sterilization of women and men, including 300,000 tubal ligations and 100,000 vasectomies. At least 36 deaths were blamed on the sterilization campaign. Despite the government's efforts, the birth rate did not decline in the second half of the 1990s, remaining at 24.48 per 1,000. (In contrast, the birth rate per 1,000 in the United States is 14.2, a little more than half the Peruvian rate.) The plan came under review in early 2000, and women's rights groups are calling for a "truth commission" to investigate the forced sterilization component.

OVERVIEW OF ECONOMY

Since the Spanish conquest in 1532 and the Declaration of Independence from Spain in 1821, Peru has been a raw material exporting nation that has experienced cycles of short-term export booms and long periods of economic stagnation, the last of which began in 1997. The first major boom was gold and silver, which the Spaniards found in abundant supply in the Inca Empire. The Spaniards sent tons of gold objects home annually. Peru became the principal vice royalty of the Spanish Crown during colonization. In addition to minerals, the Spaniards also brought numerous examples of domesticated plants to Europe. Peru has supplied the world with 120 domesticated plants, the largest number of any country, according to the UNDP.

Minerals have remained the mainstay of the Peruvian export economy, with gold topping the list in the last decade. Peru exported US$1.1 billion in gold in 2000, with the Yanacocha (Cajamarca) and Pierina (Ancash) mines ranked among the top 5 most profitable and productive gold mines in the world, according to the World Gold Council. Peru is the world's eighth-largest gold producer, second in silver and copper, and ranks in the top 5 in zinc and lead.

Other export booms have included guano and rubber, but the cycles were short-lived in the late 19th and early 20th centuries. One export product that has remained important since the early decades of the 20th century is fishing, with fishmeal (used as animal feed and fertilizer) being the chief export in the sector. Peru is the world's leading fishmeal producer, supplying nearly one-third of worldwide production in 2000, according to the Paris-based Fishmeal Exporters' Organization. Fishmeal accounted for US$900 million in exports in 2000. Major agricultural export crops have included coffee, sugar, and cotton. Coffee continues to be a major export, but sugar and cotton exports have crashed, with Peru currently importing both products.

In the 1960s, Peru attempted to break its dependence on exporting raw materials with a new nationalistic approach to economic management-based import substitution . Under the leadership of Gen. Juan Velasco, a socialist military government took power in 1968, immediately nationalizing most industries and implementing a sweeping agrarian reform program that took over all major farmlands, either distributing land to peasant communities or forming cooperatives to run them. The government took control of most industries, including nearly all mines, public services (telephone, electricity, and water), and the media. The government adopted an aggressive import-substitution program, trying to stimulate local production and making imports difficult by applying exorbitant tariffs . The Velasco experiment lasted until 1975, when a more conservative military junta (an internal military revolt against a government) overthrew him. The economic model remained basically intact, however, until the late 1980s.

The final years of the statist model were disastrous. Under the leadership of former president Alán García (1985-90), the government attempted to stimulate growth by freezing prices and raising wages, and offering businesses below-market exchange rates for exports and imports. The result was 7,600 percent inflation (1990), an annual GDP decrease of 5 percent, and depleted reserves.

Peru began changing the economic model with the election of Alberto Fujimori in 1990, adopting an International Monetary Fund-designed (IMF) program that lowered or eliminated most tariffs, privatized nearly all state-owned industries and courted foreign investment in banking, telecommunications, and service industries. The program promoted raw material exports, specifically mining—an industry that was offered tax incentives. Along with garments (US$693.6 million in exports in 2000), Peru's principal exports are minerals (49 percent of exports in 2000) and fishmeal. A large percentage of manufactured goods are imported, with the country running a trade deficit for 2 decades. The economy became increasingly "dollarized" throughout the 1990s, with 80 percent of bank deposits and 85 percent of debts now in dollars. Industry grew increasingly concentrated in Lima, with approximately 80 percent of manufacturing now based in the capital.

The government is dependent on foreign assistance from multilateral institutions (IMF, World Bank, and Inter-American Development Bank) and foreign governments. The government missed the IMF-set fiscal deficit target of 1.5 percent of GDP in 1999 and 2000. The foreign debt (US$31 billion in 1998) represents 56 percent of GDP. Foreign debt payments for 2001 and 2002 total US$3 billion, and the government signed a standby agreement with the IMF in early 2000 that frees up US$1.5 billion to service its debt.

It is difficult to calculate the value of the black market in Peru, but the impact is significant. The International Intellectual Property Alliance estimates (1998) that 50 percent of motion pictures, 85 percent of recordings, and 60 percent of computer programs are pirated. Peru's 5 borders make it relatively easy for many manufactured goods to illegally enter the country. In addition, an estimated 10 percent of the country's hundreds of thousands cable television hook-ups are illegal. The largest illicit sector, however, is the drug trade. Peru is the second-most important producer of coca, used to make cocaine, and cocaine itself. Black market money from drug sales and money laundering are calculated to be worth between 1 and 2 percent of GDP.

Unemployment, according to the International Labor Organization, stands at 10 percent, but underemployment is approximately 60 percent. An estimated 54 percent of the population lives in poverty, earning the equivalent of US$1.50 a day.

POLITICS, GOVERNMENT, AND TAXATION

Peru has been politically unstable since independence was declared in 1821 and formally granted by Spain 3 years later. Since independence Peru has had 109 presidents, 18 percent of whom were democratically elected. The remaining presidents came to power through military coups (24 percent), replaced a sitting president (21 percent), were named by Congress (18 percent), were delegated (16 percent), or formed part of a commission of notables (3 percent).

Political parties have generally been tied to 1 man, representing the traditional caudillo (strongman) model that is present in many Latin American countries. When back-to-back democratic elections are held, a rarity in Peru, the ruling party has never held on to the presidency. The country's oldest party, the American Popular Revolutionary Alliance (APRA), was founded by Victor Raul de la Torre in the 1920s. It continues to have a strong presence, despite decades of political persecution and one disastrous term in power. The party's founder, Haya de la Torre, was exiled for years and never reached the presidency. He received the most votes in the 1962 election, but a military junta stepped in after the election and took power for a year. Haya de la Torre lost by a slim margin in the election held in late 1963.

Those elections were won by Fernando Belaúnde Terry who, with Haya de la Torre, is one of the most important political figures in Peru in the second half of the 20th century. Belaúnde's Popular Action party remains active and at 90 he is still the titular head of the party. Belaúnde was deposed in a left-leaning military coup in 1968 and the generals ruled Peru for 12 years, nationalizing most industries and implementing a sweeping agrarian reform program. When the military returned the country to democracy in 1980, Belaúnde was again elected president.

APRA had its first chance to govern Peru in 1985, when Alán García was elected. At 35, García was Peru's youngest president and came to power with a decidedly left-wing platform. García's populist approach and attempt to re-establish some of the programs of the military regime—he tried to nationalize the banks in 1988— worked for 2 years but began crumbling in 1987. He ended his term in 1990 with 7,600 percent inflation and a bankrupt treasury.

The experience of Popular Action and APRA in the 1980s inspired a wave of independent candidates, personified by Alberto Fujimori. An obscure math professor, Fujimori emerged from obscurity in 1990 to win the presidency. Peruvians were tired of "politics as usual" and gambled on an outsider. With no political experience or party, Fujimori turned to the armed forces and used them to consolidate power. When Congress balked at his plans for sweeping economic reforms and harsh laws to control a growing subversive threat, Fujimori and the military took complete control, closing Congress and the courts in 1992 in what is known as a "self-coup." Fuji-mori received the backing of the population and a year later introduced a new constitution allowing for his reelection. He ran again in 1995 and was overwhelmingly re-elected because he had tamed inflation and his government had arrested the leadership of 2 violent subversive groups.

Although he came to power as an outsider, Fujimori rapidly developed the qualities and policies of Peru's traditional caudillos, concentrating power in the executive and bypassing Congress and the judicial branch whenever necessary.

Unsatisfied with only 2 terms, Fujimori and his allies tinkered with the constitution and decided he could run for a third term in 2000. He ran and won, although the elections were labeled fraudulent by local and international observers. Pressure from opposition parties calling for democracy and evidence of widespread corruption, however, never allowed Fujimori to consolidate his third term. He resigned in November 2000 and fled to Japan, his parents' homeland.

Fujimori's rapid decline set the stage for new elections in April 2001. The elections saw the consolidation of a new party, Peru's Potential, led by Alejandro Toledo. It also marked the return of Alán García—Fujimori forced García into exile in 1992—and APRA. Toledo was elected president of Peru in a close race, narrowly defeating former president García.

The free-market economic policies in place since 1990 will not change in the coming years. The incoming government, which took office in July of 2001, will maintain strict macroeconomic discipline guided by a Fiscal Discipline Law that does not permit the deficit to be higher than 1.5 percent of GDP. The economic situation will be difficult, nevertheless. The Peruvian economy has been in a recession since 1997, partly due to poor fiscal management on the part of the former government and partly because of the Brazilian, Russian, and Asian economic troubles. The collapse of Fujimori's administration also scared off local and foreign investors, with direct foreign investment reaching only US$600 million in 2000, compared to US$2 billion a year earlier.

The incoming government promises to reduce taxes and tariffs as a way of stimulating the economy and ensuring the 6 percent GDP growth economists say is needed to begin lowering poverty rates. Toledo, who has a Ph.D. in economics from Stanford University, is a political centrist, and wants to award small-business loans to farmers, balance the budget, lure foreign investment, and create jobs. Job creation is an especially important priority, considering Peru's current under-and unemployment, and the 300,000 young people joining the labor market each year.

The government's principal source of revenue comes from taxes. Of the US$8.39 billion brought in by the government in 2000, US$7.03 billion came from taxes. The largest chunk comes from value-added taxes , which accounted for US$3.4 billion in revenue in 2000. The second-largest category is income tax , which generated US$1.6 billion. A 15 percent tax is applied to personal income and a 30 percent tax is applied to business income. Other important taxes include the excise on gasoline, liquor, tobacco, and other luxury items, which brought in US$1.1 billion. Peru has the world's third-highest tax on beer, after South Korea and Kenya, accounting for 75 percent of the price of 1 liter. Taxes on imports generated US$704 million and assorted other taxes accounted for US$714 million. Government revenue in 2000 represented 14.1 percent of GDP.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Peru has an extensive system of roads that cross most of the mountain and coastal regions. Of the 72,887 kilometers (45,300 miles) of roads, 8,698 kilometers (5,406 miles) are paved. The government dedicated a significant number of resources to building and rebuilding the highway system throughout the 1990s. The principal roads are the Pan-American Highway, which runs the length of the country down the coast; the Central Highway, which connects the capital, Lima, to the Andean highlands; and the Marginal Highway, which penetrates deep into the northeastern jungle region. The number of automobiles and buses more than doubled in the 1990s, making major cities congested and leading to massive increases in roadway fatalities. An average of 3 people a day died in 2000 in public transportation-related accidents. The government has a liberal policy for imports, allowing for a steady influx of older, used automobiles. The Transportation Department estimates that 75 percent of mass transportation vehicles are more than 20 years old. A light rail mass transportation system was started in Lima in the mid-1980s, but abandoned by the central government for all of the 1990s. The project is now in the hands of the city government, which hopes to have the first 8 miles of tracks operational by 2005.

The nation's rail system, which was privatized in 2000, services highland mining operations. Passenger service on the rail system is limited to certain areas, particularly serving the tourist trade between the highland states of Puno, Cusco, and Arequipa. Several highways are in the process of being privatized and the process should conclude this year. One highway, in the state of Arequipa, has already been privatized.

Peru has 234 airports, but the majority are simple airfields serving small, private planes. The principal airport is the Jorge Chavez International Airport located in Lima, with other modern airfields in the major cities. Of the total number of airports, 44 have paved runways. Jorge Chavez International Airport was privatized in February 2001 and 5 other airports, including the tourist destination Cusco are in the final stages of privatization. Peru has a series of excellent, deep-water ports. The largest port facility is in Callao, the port city adjacent to Lima. In addition to Pacific Ocean ports, the country also has 3 large river ports: Iquitos, Pucallpa, and Yurimaguas. Iquitos is located on the Amazon River, while the other 2 ports are located on major tributaries. Peru has 8,598 kilometers (5,344 miles) of navigable riverways. Lake Titicaca, located on the border with Bolivia, is the world's highest navigable lake.

A mix of private and public companies generates electricity, the bulk of which is hydroelectric (74.79 percent). The Peruvian government began privatizing electricity generation, transmission, and supply in the mid-1990s and is continuing the process. U.S. and Spanish companies are the major investors in the sector, which produces 18.28

billion kWh per year. Major natural gas reserves, which should be available to the market by 2003-04, will help diversify dependence on water sources.

Telecommunications services have improved dramatically since the state-owned telephone service was privatized in 1993. Major players in the market include Spain's Telefonica, U.S.-based BellSouth and AT&T, and Italy's TIM. The CIA World Factbook reports that there are 1.5 million fixed lines, while cellular phones top 500,000 (1998 estimates). Telephone analysts predict that mobile phones will outnumber fixed lines in Peru within 3 to 5 years.

There are an estimated 3 million television sets and 13 broadcast stations. Cable television has not yet penetrated the national market, with nearly all of the subscribers concentrated in Lima. There are an estimated 6.65 million radios that can tune into 472 AM stations and 198 FM stations nationwide.

There are 15 Internet service providers and an estimated 800,000 people use the Internet, according to the Economist Intelligence Unit. Peru has a relatively low per capita number of personal computers, but the country is a pioneer in setting up public Internet booths to allow Internet access at a low cost. These public booths are both public and privately run, with the government installing thousands of Internet access centers in rural areas.

ECONOMIC SECTORS

Peru's diverse geography and climates, as well as its location along South America's central Pacific coast, give it privileges enjoyed by few nations. However, the country's natural wealth in agriculture, mining, and fishing has not been harnessed to the benefit of the population. The country's principal problems have been, and continue to be, its reliance on raw material exports and its unstable political climate. As a result of its dependence on raw materials, Peru's economy is highly susceptible to downturns in the world economy. Natural phenomena, particularly El Niño (a warm water current that changes ocean and air patterns off the coast of Peru and provokes droughts in some parts of the world and flooding in others), periodically play havoc on fishing and agriculture, as well as destroy infrastructure . Because of political turbulence, Peru has had 3 presidents between November 2000 and November 2001, a disturbing trend that keeps local and foreign investors skeptical about placing their money in the country.

The administration of former president Alberto Fujimori (1990-2000) emphasized the raw material export model, offering incentives to capital-intensive investments, particularly in mining. By privatizing telecommunication services, the government opened this as a new and important sector within the economy, with investments totaling nearly US$4 billion throughout the last decade. The new government, while recognizing the importance of mining, is pledging to emphasize labor-intensive sectors, particularly manufacturing, farming, and tourism as a way to diversify the economy and create jobs.

AGRICULTURE

Peru's climate and different geographical zones make it an important agricultural nation. Of the 120 domesticated plants Peru has provided the world, the potato is the most important. There are more than 3,000 varieties of potatoes found in Peru, making it the world's genetic center for the crop. Other important crops include sugarcane, coffee, and cotton, with Peru producing 2 of the world's finest strains of cotton: Pima and Tanguis. In addition to these staples, the UNDP estimates that the Andean and jungle food baskets include important vegetables and fruits that are relatively unknown but high in vitamins and proteins. These include camu-camu, a small jungle fruit with the highest known levels of vitamin C, and quinoa, a highland grain. In addition, Peru is also a major supplier of crops such as asparagus, because of its unique climate. Peru has a window for asparagus (US$120 million in export earnings in 1999) exports between November and January, months in which almost no other country exports the product. Other "designer" products include mangos, sweet onions, and herbs.

Other important elements in the agricultural sector are domesticated Andean animals including llamas, alpacas, guanacos, and vicuñas. All 4 belong to the same family and provide varying levels of fine wool. The vicuña, which is not domesticated, has the world's finest wool. Vicuñas have been on the endangered species list for decades, but are rebounding, numbering close to 150,000 today. Vicuñas are protected under the CITES convention, which means their wool cannot be commercialized. The Peruvian government is lobbying to have the prohibition changed.

A potentially important source of income could come from Peru's virgin forest in the form of logging. The Peruvian government began overhauling its laws governing the timber industry in 2000, dividing up parcels and placing conditions on logging and exports of slow-growth hardwood trees such as cedar and mahogany. Together with Guyana, in northern South America, Peru is one of the few countries on the planet that has most of its forest reserves relatively untouched.

Despite its history of agriculture and immense natural wealth, agriculture has received little attention in the past few decades. The sector continues to struggle after years of government intervention in the 1960s and 1970s (when the military government undertook agrarian reform), and benign neglect throughout most of the 1980s and 1990s. For a brief period in the 1980s, during Alán García's presidency (1985-90), the government attempted to offer interest-free loans to farmers through a state-run farmers' bank. The bank was a failure, with negligible returns on loans and declining production.

Agriculture represents 13 percent of GDP but employs 30 percent of the country's population. The incoming government proposes upping the sector's percentage of GDP as well as its employment participation by focusing on value-added products and concentrating on vertical integration . Cotton production is one agricultural product that the government is attempting to increase through vertical integration. Cotton production is linked to the country's textile manufacturing. The country's textile industry exported more than US$700 million in 2000 and includes several vertically-integrated companies, such as Textiles San Cristobal, which produces for U.S. manufacturer Ralph Lauren and other high-end clothing companies. They run cotton plantations, thread and fabric factories, garment producers, and exporters of the final product.

The goal of Toledo's government is to get Peruvian textiles included in the list of products exported to the United States tariff-free under the Andean Trade Preference Act, passed in 1990. The Peruvian government is pushing for them to be included in an extension of the act, which is currently being negotiated. The Peruvian government believes that if textiles receive tariff-free status, there will be a boom throughout the textile industry, beginning in the cotton fields.

The government plans on doubling the number of acres dedicated to cotton in order to increase cloth production to feed the textile industry. Other targeted products include hard yellow corn for the poultry industry, coffee for the specialty coffee market in the United States and Europe, and sugarcane. Peru currently imports corn and sugarcane, despite its long history of development of both crops. According to the Department of Agriculture, Peru has been a net agricultural importer since 1980, with agriculture imports worth roughly US$200 million more than exports in 1999.

Hundreds of laws were passed under the previous administration to stimulate the agriculture sector. These included privatization of fallow lands and irrigation systems, as well as removing conditions on land ownership and tenure. However, the government failed to pass 2 important pieces of legislation governing community-owned lands and water rights. Without these 2 laws, large agroindustry projects will not be able to operate.

One of Peru's best-known crops is coca, which is the raw material used to make cocaine. In addition to coca, Peru also produces substantial quantities of marijuana and, in recent years, poppies used in opium production. The government, together with its U.S., European, and UN partners, has been reducing coca crops since the mid-1990s, with promising results. Coca crops have fallen from 276,000 acres in 1992 to 84,000 acres currently. Neighboring Colombia has passed Peru as the leading producer of coca.

INDUSTRY

FISHING.

Peru is an international leader in fishing, producing nearly 10 percent of the world's fish catch. The cold-water Humboldt Current brings nutrient-rich cold waters that create ideal fishing grounds. Peru exported more than US$1 billion in fish products in 2000—most of it as fishmeal—and fished nearly 10 billion tons, making fishing the second-most important industry after mining. Fishing has been a mainstay in Peru for thousands of years, playing a key role in ancient societies. In modern times, fishing has boomed due to whaling in the late 19th century and demand for guano (bird dung), a byproduct of fishing found on small islands off the coast.

While always important, the full use of Peru's fishing resources did not occur until the mid-20th century with the introduction of fishmeal production. The star of the fishmeal, which is used for animal feed or fertilizer, is the Peruvian anchovy. For most of the 1960s and 1970s, Peruvian anchovies accounted for 44 percent of the world fish catch destined for non-human consumption. The fishing industry's participation in the GDP varies yearly, depending upon the catch and ocean conditions. In years when El Niño is present, such as 1998, the sector's participation falls to below 1 percent of GDP. Fishing currently accounts for roughly 3.5 percent of GDP and, because it is not a labor-intensive industry, employs approximately 80,000 people.

The government began privatizing the fisheries industry, PescaPeru, in 1994 in a process that continues today. The government has sold its participation in all processing plants and fishing fleets, and is now preparing to privatize fishing ports as a general program to privatize all the nation's ports. The Fisheries Ministry is also beginning a process of privatizing experimental and research centers as well as fish-farming installations. The industry is facing another potential downturn because of the fear created by "mad cow" disease in Europe. The European Union nations voted in early 2001 to ban all feed products made from animals, including fishmeal. The scope of the ban was later reduced, but restrictions still apply. Peru's fishmeal exports to Europe declined by 41 percent in the first quarter of 2001.

MINING.

Mining has been a central element in Peru's history for thousands of years. The Andes are rich in minerals and gold, and silver pieces can be found in numerous pre-Columbian societies. Mineral exports are a key to the country's economy, representing nearly half of Peru's exports in 2000. Peru ranks eighth worldwide in gold production (first in Latin America), second in copper, and among the top 5 producers of lead and zinc. Two of Peru's gold mines, Yanacocha and Pierina, are among the most productive and profitable gold mines in the world. Peru has an estimated 21 million fine ounces of gold reserves in mines currently under operation and 42 million fine metric tons of copper reserves. An additional 100 gold mines are predicted to come on line in the next 5 years. Also looming in the near future is the massive Antamina project, a Canadian-led mining operation that will require US$2.3 billion in investments and is expected to produce copper, zinc, lead, gold, and silver for the next 30 to 40 years. Antamina is the largest mining project underway in the world.

Mining activity and exports have grown exponentially since 1991, when the government adopted a series of new rules and tax benefits for large-scale mining, streamlined the process for filing a mineral claim, and allowed companies to re-invest upward to 80 percent of profits tax free. Mining exports grew from US$1.2 billion in 1987 to US$2.7 billion in 1997. Gold witnessed the greatest increase, rising from less than US$1 million in exports in 1987 to US$500 million in 1997. Gold exports are now US$1.2 billion, according to the World Gold Council.

Like fishing, however, mining is not a labor-intensive activity, creating few jobs and demanding huge investments for each job created. Nevertheless, mining represents one of the few money-making activities in the Peruvian highlands, particularly in areas higher than 12,000 feet above sea level where most mining operations are located. Mining represents 10 percent of GDP, according to the U.S. State Department's Country Commercial Guide.

MANUFACTURING.

Because of its long dependence on raw material exports, Peru has never developed a strong manufacturing sector. The sector represents 15 percent of GDP and is tied heavily to mining, fishing, agriculture, and textiles. Manufacturing is mainly devoted to processing a percentage of the raw materials to gain a value-added advantage. The most promising sector is textiles, with Peru exporting nearly US$700 million in garments in 2000, mainly to the United States and Europe. Textiles represent the largest non-raw material portion of the Peruvian export economy. Peruvian textiles are currently exported duty -free to European Union nations under an agreement to help the country fight the drug trade. The U.S. Andean Trade Preference Act (ATPA), passed in 1991, has the same goal, exempting nearly 6,000 products produced in Bolivia, Colombia, Ecuador, and Peru (all major drug-producing nations) from tariffs. Textiles, however, were left off the list. The 4 governments are lobbying for the U.S. Congress to include textiles on the trade list when ATPA is renegotiated in December 2001. Peruvian garment makers generally produce high-end products for the U.S. markets, including brand names such as Ralph Lauren, Brooks Brothers, and Bobby Jones.

SERVICES

TOURISM.

Tourism has represented a new growth industry in Peru since the early 1990s, with the government and private sector dedicating considerable energies to boosting the country's tourist destinations both to Peruvians and foreigners. Foreign tourist arrivals have jumped from approximately 90,000 in 1990 to more than 1 million in 2001, with a corresponding upswing in investment in services. The U.S. State Department's Country Commercial Guide estimates that US$330 million will be spent on new hotels alone between 2000 and 2005. The government estimates that 1 million new jobs will be created if it reaches the goal of 2.5 million tourists by 2005.

The public and private sector are promoting the country's tourist industry in 2 specific categories: ecotourism and historical/cultural tourism. The main draws are the Amazon rain forest and high Andes, including the Colca Canyon, the world's deepest, and archaeological sites such as Machu Picchu, considered to be the "lost city of the Incas."

FINANCIAL SERVICES.

With the exception of Banco de Credito—Peru's largest financial institution (US$8.5 billion in assets)—nearly all the financial sector has fallen into foreign hands. The financial system has been on somewhat shaky ground since 1997, with a number of bank mergers or failures. The number of banks in the system fell from 25 in 1998 to 16 in 2001. There were 2 interventions by the government to save banks in late 2000, and authorities say the system is solid although it might not be flush with cash.

RETAIL.

Nearly all retail is concentrated in Lima and, with a few important exceptions, is controlled by foreign capital. The 2 major department store chains, Saga and Ripley, are Chilean-owned and one of the 2 supermarket chains, Santa Isabel, belongs to the Dutch conglomerate Ahold. The other supermarket, E. Wong, is Peruvian-owned and solid. Supermarket sales, however, account for less than 10 percent of overall sales nationwide. In the past 10 years, Peru has attracted international franchises from apparel to gas stations and fast-food chains, including McDonald's and Burger King. The most successful franchise in terms of profit has been Dunkin' Donuts.

INTERNATIONAL TRADE

Peru has had a trade deficit for the past few decades, with exports reaching US$6.7 billion (2000 estimate) and imports of US$7.4 billion (2000 estimate). The trade gap has narrowed since 1997, as the country has fallen deeper into recession and imports have declined. The United States is Peru's largest trading partner, absorbing 25 percent of the country's exports (1997). It is followed by China (8 percent, mainly minerals and fishmeal) and Japan (7 percent, mainly minerals). The United States is also the largest source of imports, representing 19 percent of goods. Other important sources for imports are Colombia (6 percent), Venezuela (5 percent), Chile (4 percent), and Brazil (4 percent). Major exports include fish products, minerals (gold, silver, copper, zinc, lead), agricultural products (coffee, asparagus), petroleum products, and textiles. Major imports include machinery, transportation equipment, food (wheat, corn, rice), petroleum, medical equipment, and iron and steel.

Peru is a founding member of the Andean Community of Nations, which groups together Peru, Colombia, Ecuador, Bolivia, and Venezuela. Peru has had difficulties with the group, and, under Fujimori, threatened to pull out. The Andean group has joined forces to lobby for an extension of ATPA and all nations are flirting with Brazil to test the possibility of adjunct membership in the Southern Cone Common Market (Brazil, Argentina, Uruguay, and Paraguay).

The incoming government promises to move the country away from raw material exports as a way of stimulating other industries and generating a trade surplus within 5 years. The emphasis will be on textiles, agroindustry (principally "niche" crops like asparagus where Peru has a comparative advantage because of climate), and fossil fuels. The massive Camisea natural gas fields,

located in the south-central jungle region, should be completed within 3 years, giving Peru an energy surplus it hopes to export to Ecuador and Chile and possibly Brazil by hooking into a Bolivian natural gas pipeline already sending fuel to Brazil.

MONEY

Peru has been in a recession since 1997, which has resulted in a tight money supply and declining internal consumption. Domestic demand fell by 0.9 percent in 1998 and by 2.4 percent in 1999. Demand did not increase in 2000, and the first quarter of 2001 showed that Peruvians were still cautious about spending their money. Demand growth for 2001 was estimated to be less than 1 percent, according to the U.S.-based Institute of International Finance.

While external factors like the economic crises in Asia, Russia, and Brazil affected the economy, the most serious effects came from political turbulence within Peru. Former president Alberto Fujimori's decisions to run for a third term in late 1999 and his victory in mid-2000 (in elections widely criticized as fraudulent), kept spending down and scared off foreign investors. The political crisis, which eventually saw Fujimori abandon the presidency and flee to Japan in November 2000, has had a negative effect on tax collection, with tax receipts dropping an average of 10 percent a month between October 2000 and February 2001.

The crisis, however, has not affected the exchange rate or inflation, which have fluctuated but not taken off as in earlier times in Peru's history. Inflation has been declining annually since 1990, when it reached 7,600 percent. Inflation has been in low digits since the early 1990s and has been declining steadily since 1994, dropping from 15.4 percent to 3.7 percent in 2000. The currency has also remained stable, moving only from 3.38 nuevos soles to the U.S. dollar in 1999 to 3.5 by year-end 2000. The exchange rate in the first quarter of 2001 remained steady at 3.5 nuevos soles to the U.S. dollar.

The Peruvian government, in agreement with the International Monetary Fund, maintains a floating currency. The government has rejected any possibility of switching currency to the U.S. dollar, as has neighboring Ecuador, or pegging the rate to the dollar, as has Argentina in its "convertibility" plan.

The Lima Stock Market—re-opened in 1971—is relatively small, trading blue chips and local shares. Daily transactions average US$3.5 million.

POVERTY AND WEALTH

Despite years of promises and billions in social programs, the bulk of Peru's population (54 percent) lives in poverty, according to the CIA World Factbook. Of the poor, the UNDP estimates that 19 percent live in "absolute poverty," meaning they survive on less than US$1 a day.

The contrasts between rich and poor are clearly seen in Lima, the capital, which has more than doubled in size in the past 2 decades. The majority of the capital's population live in shantytowns, known as pueblos jovenes locally, most of which are perched on barren sand dunes near the Pacific coast or on rocky outcrops in the foothills of the Andes. The shantytowns surround upscale neighborhoods, most of which are a cross between Miami homes and Spanish villas.

Income distribution continues to be extremely skewed, with the top 10 percent of the population controlling 35.4 percent of the nation's wealth, while the bottom 10 percent controls just 1.6 percent. The gap is seen

in access to basic services. While the wealthy neighborhoods have had access to potable water, waste removal, paved roads, and electricity for decades, these services are newcomers to most shantytowns. In fact, only in the 1990s did most of Lima receive electricity, and water for many areas is still brought in by cistern trucks.

The literacy rate in Peru is 88.7 percent and education is universal and free. An estimated 7 million children and adolescents are of school age. Of these numbers, the U.S. State Department estimates that 6 percent of children and 17 percent of young people either never attend or drop out of school. The high school drop-out rate in rural areas is more than 50 percent. An estimated 750,000 students attend nearly 50 state and private universities.

There are 455 hospitals and 1,083 clinics in Peru, serving a population of 27 million people. There are 23,700 doctors, 7,950 dentists, and 15,000 nurses.

The government tried to offset many of its social problems with programs, but these programs were aimed more at ensuring voter support than solving the root causes of the problems. In 2000, 60 percent of rural Peruvians and 40 percent of urban residents were receiving some sort of government aid through community soup kitchens, food give-aways, or school-based breakfast, lunch, or health-care programs. The incoming government has pledged to maintain most of the programs, but says it will de-politicize them.

The World Bank and International Monetary Fund estimate that the Peruvian economy needs to grow by 6 percent annually over a sustained period of time if the country is going to adequately reduce poverty levels. Compared to neighboring Bolivia and Ecuador, Peru is not doing poorly, but it lags well behind Chile and Colombia in terms of per capita income and access to goods and services.

WORKING CONDITIONS

Because the Peruvian population is so young—with 53.8 percent of the population under the age of 25—the working-age population is growing by 300,000 people a year. The U.S. State Department's 2001 Human Rights Report estimates the workforce to number 8.5 million, of whom 5 percent are unionized. Official unemployment, according to the International Labor Organization, was 10 percent in 2000, but even the government admits that the statistics are misleading. An estimated 60 percent of the population is underemployed. The workforce remains largely unskilled, with many skilled laborers leaving the country to search for work abroad. An estimated 1 million Peruvians now live abroad, the majority of them in the United States or Spain.

The government raised the monthly minimum wage to the equivalent of US$117 in March 2000. The U.S. State Department estimates that more than half the work-force earns less than the minimum wage.

The government began dismantling labor laws in the early 1990s as part of the efforts to streamline the economy, open the country to foreign investment, and privatize state-run industries. As a result, labor union activity has declined substantially with the Construction Workers Union and Teachers Union the only 2 organizations retaining a nationwide profile. Strikes called in 1999 and 2000 had little national importance. Under current laws, strikes not approved by the government are illegal.

The 1992 labor law made striking and collective bargaining difficult. While collective bargaining is legal, the law says it can only be carried out if it is "in harmony with broader social objectives." Local and international labor groups also complain about provisions that allow companies to hire 30 percent of the workforce on an "internship" basis, meaning 3-month contracts without social benefits. In addition to government changes to the laws, the Maoist Shining Path guerrillas also made it a policy to infiltrate unions or create their own unions as a way of weakening companies and whole economic sectors. While the Shining Path's leadership was jailed in 1992 and the group has all but disappeared, the stigma it created for unions remains.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1438-1530. Height of the Inca Empire, expansion north to Panama and south to Argentina.

1532. Francisco Pizarro lands in Peru and conquers the Incas.

1821. Independence from Spain is proclaimed.

1824. Independence is granted.

1879-83. War of the Pacific with Chile. Peru loses a large chunk of its southern territory, and its economy is destroyed.

1924. APRA party is founded.

1941. War with Ecuador.

1968. Left-wing military coup led by Gen. Juan Velasco. Agrarian reform begins; industries nationalized.

1975. Right-wing military coup; dismantling of statist model begins.

1980. Return to democracy. Fernando Belaúnde is elected president.

1980. Shining Path launches first attack.

1985. Alán García is elected president. Foreign debt cap is announced.

1988. The government attempts to nationalize the banks; economy collapses.

1990. Alberto Fujimori elected. Structural adjustment program announced. Inflation reaches 7,600 percent.

1992. Shining Path leadership arrested.

1993. Telephone company privatized for US$2 billion.

1995. Fujimori is re-elected.

2000. Fujimori re-elected in fraudulent May elections. He resigns in November.

2000. Valentin Paniagua takes over as interim president in November. Alejandro Toledo is elected Peru's new president.

FUTURE TRENDS

Peru is a nation rich in natural resources and human potential, but it has been plagued by political turmoil throughout its history. The country has had 109 presidents in less than 180 years as an independent nation. In 2000-01 alone it had 3 presidents. The past administration of Alberto Fujimori is accused of stealing as much as US$1 billion—roughly 10 percent of the government's annual budget—through bribes, kickbacks, and graft. Peru must rid its public administration of corruption if it hopes to attract foreign and local investors.

The current generation of politicians and economists are correct in pointing out that Peru needs to diversify its economy and its exports, relying less on raw materials and more on value-added goods. A decision to concentrate on the agricultural sector is sensible because it takes advantage of the country's natural wealth, exploits niches in the world market, and most importantly for Peruvians, creates jobs.

The government has hard choices to make in the coming years. The budget deficit cannot be greater than 1.5 percent of GDP as part of the agreement with the International Monetary Fund. Peru missed the target in 1999 and 2000, and another miss will not be taken lightly. The country needs to adopt a new round of reforms, including additional privatizations and reduced government spending, which will make already tough social conditions even more difficult. The government needs to find a balance where it can satisfy creditors and keep international channels open while making sure the basic needs of the population are met.

DEPENDENCIES

Peru has no territories or colonies.

BIBLIOGRAPHY

Brack Egg, Antonio, and Cecilia Mendiola. Ecologia del Peru (Ecology of Peru). Lima: United Nations Development Program, 2000.

Hudson, Rex, editor. Peru: A Country Study. Washington: Federal Research Division, Library of Congress, 1993.

Tamariz, Domingo. Historia del Poder: Elecciones y Golpes de Estado en el Peru (History of Power: Elections and Coups in Peru). Lima: Jamie Campodonico Ediciones, 1995.

Turner, Barry, editor. The Statesman's Yearbook. New York: St. Martin's Press, 2000.

U.S. Central Intelligence Agency. World Factbook 2000: Peru. <http://www.cia.gov/cia/publications/factbook/geos/pe.html>. Accessed February 2001.

Webb, Richard, and Graciela Fernandez Baca. Peru en Numeros 1999 (Peru in Numbers in 1999). Lima: Cuanto Institute, 1999.

—Lucien O. Chauvin

CAPITAL:

Lima.

MONETARY UNIT:

The Nuevo Sol (S/.). One nuevo sol equals 100 céntimos. Coins are in denominations of S/.1, 2, 5, and 5, 10, 20, as well as 50 céntimos. Paper currency comes in denominations of S/.10, 20, 50, 100, and 200.

CHIEF EXPORTS:

Minerals (gold, zinc, silver, lead, and copper), petroleum and byproducts, fish (fish-meal), agriculture (coffee, asparagus), manufactured goods (textiles).

CHIEF IMPORTS:

Machinery and transportation and telecommunication equipment, oil and other petroleum products, agriculture inputs (fertilizers, animal feed), medicines.

GROSS DOMESTIC PRODUCT:

US$116 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$5.9 billion (f.o.b., 1999 est.). Imports: US$8.4 billion (c.i.f., 1999 est.).

Peru

History & Background

Spanning a 2,400 mile length of the Pacific coast, Peru constitutes the third-largest country in South America at 1,285,216 square kilometers. At least as significant as the country's size, however, is its geographical and climatic diversity. The bulk of the nation's population of 22 million inhabits the arid but accessible coastal region west of the Andes, which creates a formidable barrier between the coast and the tropical rainforests that fill nearly 60 percent of Peru's land area east of the mountains. Since the time of Spanish colonization, the coastal region has enjoyed economic privilege over the inland areas, largely due to accessibility. The climate across the country ranges from tropical to glacial, with vast differences in the productivity of the soils and accessibility to transportation.

Peru's population has been historically split just as its geography, yet this division has been more fluid. After their sixteenth-century conquest of Peru, the Spanish placed themselves at the head of a strongly hierarchical existing population, subjugating the previously dominant Inca leaders but allowing them to retain a place of dominance over their subjects. Even after independence from Spain in 1825, race has continued to play a major role in Peruvian society. As in many other Latin American nations, a three-tiered hierarchy has emerged over time with those descended from the Spanish at the top, the native groups at the bottom, and mixed race or mestizaje, occupying a position of some respectability in between.

The formation of the contemporary Peruvian education system began with the arrival of significant numbers of Spaniards in the sixteenth century. The development of schools for the growing Spanish population was driven almost exclusively by the clergy, who gathered in greatest density at Lima, constituting as much as 15 percent of the capital city's population by the seventeenth century. Due to this concentration of clergy, Lima became established early in Peru's modern history as the center of education with many Spanish students migrating from outlying districts for their education. Eventually this migration extended to meztizos, those of mixed race, and most recently to the indigenous peoples of the nation. Only during the latter half of the twentieth century were provincial educational facilities developed that could compare with those in Lima. While education during the colonial period focused exclusively on those of the ruling class, the 1821 war of independence, led by San Martín, sought to enfranchise the entire population and opened educational opportunities to a wider segment of society. After three centuries of Spanish oppression, however, the Native Americans came to this opportunity largely illiterate, poor, and Monolingual; therefore, they were illprepared to advance into the higher levels of the new republic's society. Cultural biases in favor of the established educational centers and against the Native American and mestizo populations coupled with economic limitations to slow the expansion of the educational system. It took more than a century of slow progress to create an educational infrastructure that reached all the significant population centers across the nation. Secondary colegios were founded in Ayacucho and Huaráz in 1828, in Chiclayo in 1832, and in Trujillo in 1854. The effect of these and other provincial colegios was to reduce the need for educational migration to the major centers of Lima and Cuzco.

In the years following independence, the Peruvian governments that resulted from the series of 10 constitutions placed into effect between 1823 and 1993 have consistently accepted responsibility for universal education. In order to remedy the slow pace of progress in achieving this objective, governments initiated a series of significant and more or less successful reforms that marked the most important progress of the nation's first century. In 1855, a reform movement created the primary and secondary levels of the public schools. In 1866, the Prado government's Minister of Justice and Education, José Simeón Tejeda, worked to create the nation's first uniform secondary school curriculum, orienting studies more toward vocational training than toward the traditional college preparatory curriculum. At the same time, Tejeda labored toward gender equality, attempting to provide equal access to education for women and allowing women to teach in the nation's primary schools. An 1867 law called for a secondary school for each sex to be established in each provincial capital, although the full implementation of these reforms would only be accomplished many years later. Tejeda also worked to effect university reform, abolishing the colonial Colegio de San Marcos as an independent unit within the San Marcos University and creating faculties in sciences, letters, law, and theology. An 1875 movement introduced lycées modeled on the French system into the nation's secondary schools. Finally, in the first decade of the twentieth century, the administration and finance of the nation's schools were centralized under the auspices of the Ministry of Education. During that same period the ministry saw its budget doubled—to reach 17.2 percent of the national budget.

Despite these and other less celebrated efforts, the goal of universal, equal education suffered due to the strict social stratification still prevalent throughout the country and enforced by conservative cultural, political, and religious forces. Only in the post-World War II period was significant progress achieved in spreading education to the majority of school-age children in Peru. During the years of 1944 through 1962, a joint organization of educators from Peru and the United States created and funded the Servicio Cooperativo Peruano-Norteamericano de Educación (SECPANE), which aimed to increase educational access for Peru's Andean Native Americans. During its 18 years of existence, SECPANE instituted many initiatives, including the creation of central resource schools, well-provided with both equipment and staff, which served as hubs for a network of smaller schools. Despite the gains, however, upon SECPANE's termination in 1962, much of the progress was lost. The demise of SECPANE has been ascribed to various forces, including a lack of understanding of Peruvian social dynamics on the part of the administrators and teachers from the United States and their failure to more integrally involve Peruvian educators and administrators in the reforms so as to make the process more self-replicating.

A more successful reform came in 1972 when the Ministry of Education resolved to use education to prepare citizens for the workplace in ways that would help develop society, effect structural reforms in the culture, and make Peru more powerful and independent within the international community. This reform, which included a revival of many of the techniques used during the SECPANE years, was accompanied by a significant increase in educational funding and a renewed commitment to provide free and equal education for students from the primary schools through the university. During the 1960s and 1970s, considerable progress was attained in extending the reach of the educational system, with those termed "uneducated" by the government reduced from 32.8 percent to 13.5 percent between 1961 and 1981.

An economic crisis that culminated in 1990 with Peru having the world's highest inflation rate (7000 percent), an effective unemployment rate of 94 percent in Lima, and a nationwide poverty rate of 50 percent resulted in dramatic cut-backs in real-dollar funding for Peruvian education and a consequent deterioration of the school system. The succeeding government committed itself to a restoration and eventual expansion of education funding. At about the time that funding rose above pre-crisis levels, the Ministry of Education moved to reorganize and reform the entire educational system through a series of structural and curricular initiatives beginning in 1997 and aiming for complete implementation by 2007.

An understanding of Peru's educational culture cannot be complete without an awareness of the ethnic and social divisions within the nation. Historically, Peruvian society has been structured in such a way as to reinforce the existing hierarchy that placed Europeans at the top. Education has been seen, in the earliest days and, to a less obvious degree, up to the present as a tool for the maintenance of this hierarchy. Education has thus followed a two-fold philosophical program in effecting this maintenance, serving to underscore the innate superiority of the privileged classes while at the same time serving to assimilate indigenous people into the thought patterns and values of conformity. From a practical standpoint, cultural indoctrination has followed a three-part strategy for assimilation and control. First, religious instruction was used as a main goal of the education system, and the efforts to bring Catholicism to the indigenous people held strong for many years after the conquest. Second, education was called upon to train clergy and bureaucrats from among the lower classes, creating collaborators in their practice of assimilation. Third, education aimed to train the lower classes in the economic and social standards of the ruling class so that they might take their place as functioning, productive members of the society. Peru, in 1997, began a 10-year process of modernization and restructuring of the educational system, aimed at addressing many of the inequities of the past and better preparing students for the future.

Besides ethnic divisions, Peru has a long-standing division between urban and rural residents. The 1990 census located more than 70 percent of Peruvians as urban dwellers with a full 30 percent residing in the capital, Lima. Virtually all quality-of-life statistics, including income, literacy, and educational achievement demonstrate the relative advantage that urban dwellers hold over their rural counterparts. Of the improvements in educational performance between 1961 and 1981, most were sited in the urban areas. Language divisions persist despite long-standing attempts, only recently abandoned, to enforce Spanish as the universal language. Indigenous languages are spoken by approximately 25 percent of inhabitants, with Quechua being the primary language of some 80 percent of this group. Spanish remains the official language with Quechua and Aymara granted a semiofficial status in some regions. During the twentieth century, Peru's already complex population became complicated by a large number of immigrants, especially Japanese immigrants, who arrived mostly as farm workers. The most prominent of these Nikkeijin, as the descendents of these Japanese immigrants are called, Alberto Fujimori, served as Peruvian President from 1990 through 2000.

Constitutional & Legal Foundations

Peru's 1993 constitution devotes several articles to the topic of education. In article 13, education is presented as a core factor in personal development to be protected by the state and encouraged by the family. The specific provisions that follow this affirmation provide for academic freedom; academic professionalism; limited local control of education; compulsory preprimary, primary, and secondary education; university freedom and autonomy; and assorted other educational rights. The education articles of the constitution also establish the authority of the national government, specifically the Ministry of Education, over curricular and administrative matters of education nationwide. While the constitution includes important provisions for higher education, most of these rights were stated earlier and more completely in the 1982 General Law of Education Year. This law was followed in 1983 by the University Law, which further established the rights of the institutions, academics, and higher education students. The 1995 higher education law, provides for the establishment of the Consejo Nacional para la Autorización de Funcionamiento de Universidades (CONAFU), which serves as a coordinating council for the nation's growing number of higher education institutions.

The 1997 reform documents the dramatic change in educational philosophy that Peru has planned for the years 1997 through 2007 when it suggests that the existing concepts of education were designed to function in a learning environment diametrically opposed to that actually in existence. The old educational philosophy is typified as the acquisition of a list of concepts and acts while that which the Ministry of Education seeks to create is presented by way of four areas: learn to be, learn to coexist, learn to become, and learn to learn.

Educational System—Overview

The Peruvian educational system serves young people from shortly after birth until the completion of university studies, although many limitations and exclusions make this system far from universal. A developmental preprimary system attempts to prepare students for primary education during their first six years of life. According to the legal standards of the nation, Peruvian children have access to equal and compulsory primary education from the ages of 6 to 11. Upon completion of primary education, students proceed to a unified two-year program of secondary education in a general secondary school from ages 12 to 14. At the end of the general secondary program, students are divided into two tracks for a three-year program from ages 14 to 16. The more academic of these tracks is the Ciclo Diversificado Científico-Humanista, which awards a Bachillerato Academico upon completion. The second track, the technical secondary school, awards its completing students a Bachillerato Técnico. Aside from the three-tiered program of traditional education, the nation also provides special education services for nearly 300,000 students annually. These students include those with cognitive and physical disabilities as well as emotional instability. Education in Peru is compulsory from the ages of 6 through 16. The academic year runs from April to December for 38 school weeks each year. In the secondary schools, each week includes 36 class periods.

Peru in 1999 supported 56,671 schools and 284,511 classrooms nationwide, serving a total of 7,553,011 students. The 2000 statistics showed an increase to 7.8 million students, of whom 6.7 million attended free state-funded schools. Of these students, slightly more than half (50.5 percent) are male. Of the nation's 351,441 teachers, females outnumbered males by a rate of 57 to 43. Ministry of Education statistics estimate that 96.9 percent of primary-age children and 85.9 percent of secondary-age children were enrolled in school in 1999, up from 88.0 percent and 79.4 percent respectively in 1993. Throughout all levels of education, students in rural schools were considerably more apt to be older than the prescribed age for their current level of school, reflecting the relative weakness of the early-childhood programs in rural areas. Similarly, rural students are much more likely to receive scholastic assistance than their urban counterparts.

Although slightly underrepresented in the primary and secondary schools, the status of women in Peruvian education has improved dramatically since the Tejeda Ministry of Education began opening the way to full participation for women. The inclusion of minorities, most notably Native Americans, in the education system remains a work in progress. The history of Peruvian education can be outlined using the series of initiatives attempted since independence at integrating the Native Americans into the system. In the 1960s, the government instituted a new basic education law, which dictated that any community building its own schoolhouse would be assigned a teacher by the government. In the wake of this, hundreds of peasant communities worked together to bring a school into their midst. The Ministry of Education made good on the promise of teachers, greatly raising the enrollment rates of eligible students. Although recent reforms and practices suggest that the educational system is moving toward a less assimilationist attitude, historically, Native American students were viewed and were encouraged to view themselves as distinctively and defectively "other." Many indigenous people viewed the educational system as a means toward reducing this difference, thus forcing them to blend with the dominant culture. Education has, even in recent years, taken an active role in disparaging Native American culture, including encouraging students to discard their traditional clothing and not to speak the vernacular language.

In 1990, a total of 72 percent of the population reported speaking only Spanish, compared with 60 percent in 1961. Roughly 18 percent of the total population is bilingual in Spanish and a native language, while around 10 percent report being monolingual in a native language. This number, while only 50 percent of the non-Spanishspeaking population reported in 1960, still represents a significant portion of the nation's potential students. Although Spanish remains both the official language of the nation and the primary language of instruction, earlier efforts at suppressing native tongues have ended. In recent decades, the government has reversed its Spanish-only policies, processing through a period of neutrality, to current promotion and support for both bilingual education, mostly Spanish-Quechua and Spanish-Aymara, and study and preservation of various native languages. Recent initiatives utilizing bilingual education in the Andean and Amazon regions of the nation have resulted in pronounced progress in literacy and educational achievement among those peoples. Despite efforts at linguistic inclusion within the government at large and the education establishment in particular, literacy and fluency in Spanish remain a virtual requirement for participating within the national life and exercising rights as a citizen.

Between 1950 and 1990, the number of students enrolled in private schools declined from 34 percent to 14 percent. This decline can be traced to two conflicting forces. First, the overall rate of matriculation among all eligible students increased significantly over this period. With virtually all of these new students moving into the public schools, the private schools' proportion of the total student population declined without an actual decline in headcount. Second, the economic crisis of the 1980s caused a slight reduction in enrollments in private schools, although this force was by far the less significant of the two.

All private schools operate on a non-profit basis with state oversight and regulation. Private schools are generally self-funding, although some receive a subsidy from the government that assists in the payment of teacher salaries. Fees levied by private schools are set by a fees and scholarships committee within the individual school, composed of the school's director, its principal (or a designated representative), a member of the faculty, and a representative of the parents. The fees assessed range from $15 to $300 monthly. Roughly 25 percent of private-school students attend schools provided by religious bodies.

All curricular materials, syllabi, and course outlines are created and provided by the Ministry of Education. These materials, once created, are required by law to remain in place for at least six years before revisions can be effected. Local control is allowed for decisions concerning the details of content delivery and teaching methodologies in order to provide flexibility in accommodating the variations in language. While the first years of primary curriculum are tightly scripted by the Ministry of Education, teachers in grades five and six are given relatively more freedom in allocating time dedicated to the required classes. In the lower grades, teachers are restricted to variations in the actual delivery but are given very little flexibility in terms of content. Teachers are required to prepare an annual plan, before the beginning of the school year, through which they coordinate their proposed pedagogy with the personal and regional needs found in their classes. While content is tightly controlled by the government, teaching methods are largely left up to the individual teachers, who are encouraged to take into account the maturity levels and learning habits of their students, their own particular teaching styles and strengths, and the resources available in and around the school.

From the beginning of the republic to the present, Peruvian leaders have seen education as a vital force in economic development. The nation's ability to effect recovery from the economic crisis of the 1980s can be traced not just to sound economic policies on the part of the government but to the expansion of both the educational infrastructure and the proportion of highly educated people within the society. Economic development in the Amazon and trans-Andean regions have followed closely behind the establishment and expansion of education services in those areas.

Aside from its role in economic development, education has been a major force in political and social development. Early reformers like San Martín saw education as a means toward guaranteeing the survival of an independent state. The nation's history of military dictatorship and government corruption can be traced to some degree to the failure of a century-long series of initiatives toward universal education. Conversely, the nation's recent relative political stability, especially in the light of such potentially devastating forces as economic disasters, political corruption, and the Shining Path movement, suggests that progress toward the expansion and improvement of the education system have begun to fulfill San Martín's hopes.

A final area in which education fosters development is in national identity. In the wake of the devastating War of the Pacific, which resulted in Peru losing wealth, prestige, and territory, education became the primary means by which the government inculcated a nationalistic vision within students. Although the curricula of the 1997 reform seems headed away from this tendency, textbooks and classroom objectives in the schools have traditionally been laden with nationalistic and sometimes jingoistic materials, which laud the heroes of the past and at the same time vilify two long-time enemies, Chile and Ecuador.

Preprimary & Primary Education

The existence of a primary school and teacher in a village is seen as the first step out of poverty and disrespect by most poor and rural citizens. Preparatory education begins as early as the child's first year of life and continues up the point at which the student enters primary school at age six. The first four of these preparatory years focus on involving the parent in the development of the child, while the final two years constitute a kindergarten program with the aim of preparing the child for the more structured primary curriculum. Among the goals of the preparatory education system is the early diagnosis of learning disabilities, as well as family education regarding standards of hygiene, nutrition, and other environmental factors that predict student success. One of the most important goals for the Ministry of Education is to reach all four- and five-year-old children with preparatory education services. In 1999, the Ministry estimated a coverage of 63 percent of four-year-olds and 82.4 percent of five-year-olds, up significantly from 56.6 percent and 78.5 percent, respectively, in 1993 but still considerably below a level of coverage that might be termed universal.

Primary education serves students from ages 6 through 11 and is divided into two portions. The first of these portions lasts four years followed by a two-year second portion. The goals stated by the Ministry of Education for the primary years include the fostering of an independent and critical mind in the student along with basic education in the areas of science, the humanities, and technology; citizenship development; and vocational readiness. Toward that end, the government prescribes a curriculum including the study of mathematics, language, social studies, science, physical education, art, religion, and practical arts. Primary school enrollment in 1999 was reported at 3.3 million.

In 1998, the Ministry of Education presented a new curriculum for basic education, which was to be put into effect in 2000. This curriculum, while not a drastic departure from the curricula of the past, presented objectives and methods in a more consistent and competencyoriented manner. The basic education curriculum has been divided into five major areas: communication, including oral, written, and visual; mathematics and logic; personal and social studies; science and environmental studies; and religion. For each of these areas the curriculum provides fundamental disciplinary assumptions, specific competencies, and suggested methods for achieving these competencies.

The curriculum and educational objectives of the primary schools for both traditional and non-traditional students are established by the Ministry of Education. Completion is based on the mastery of objectives, not on time, although this flexibility does have limits. Students are evaluated four times each year using a progressive evaluation instrument. A cumulative evaluation is performed at the conclusion of the academic year in order to determine the readiness for promotion of the student. This instrument is aimed at an overall measurement of the facts, processes, and activities included in the previous year's work. The examination is graded on a scale from 0 to 20. An average in all areas of 11 with passing grades in both language and mathematics is required for promotion to the next grade. Those students failing are allowed to retest in March, a month before the beginning of the school year, in order to remain at their appropriate age-grade level.

Students failing to achieve either the overall score on the annual examination or failing the mathematics or language component are not allowed to advance to the next grade in the primary sequence. Also, students who are absent for 30 or more days during the school year will be required to repeat the grade level. For those students aged 15 and older who have not already completed the basic education requirements of the primary school, the schools provide a separate but parallel program of study in the evenings, allowing these students to work while completing their studies. Since the 1970s, the government has expanded such non-traditional study programs by funding vocational training centers for students who have not excelled in academic settings. These centers, often working in partnership with private industry, strive to adapt instruction to the particular needs of the learner.

Secondary Education

Secondary education covers the 5 years from the ages of 12 through 16 and is divided into two phases. The first phase comprises two years of general studies followed by the second phase, which includes three years of specialization. In this second phase, each pupil may choose between academic and vocational options. The academic students are allowed to sub-specialize in either liberal arts or science, while the vocational students choose between commercial, industrial, and agricultural courses of study. Upon successful completion of the second cycle, pupils are awarded with a certificado for the specialization they have studied. After receiving their certificado, students before the 1997 reforms were eligible to sit for the university entrance examination immediately, although most have opted to engage in a one-year preparatory course of study before taking the examination. The 1997 reforms, reacting to this need, established a new level of education, two years in duration, to be placed post certificado and post-compulsory education. This study leads to the achievement of the bachillerato, and is considered indispensable for success in higher education and for the accomplishment of the three stated goals of secondary education: To prepare the student to exercise the rights and responsibilities of a citizen in a democratic nation, to prepare the student to effectively enter the working world, and to equip the student with a skills sufficient for successful entrance and pursuit of higher education. Secondary enrollment was reported at 2.3 million students in 1999.

The 1997 reforms organized the secondary education curriculum into five areas of emphasis: science (including mathematics) and technology, communications, economics and management, human development (including philosophy and history), and professional development. This curriculum is designed to be interconnected with the subject matter in each discipline reinforcing the lessons learned in the others. The grading system is generally on a 20-point scale with 11 as the passing point. The average age at which students leave the public secondary schools was 16.8 years in 1996, with an average of 16.7 in private schools. With the imposition of the 1997 reforms, this number has risen and become much closer to the average age of university entrance. At the completion of the bachillerato course of study, students may sit for the nation-wide Bachillerato examination, which provides a standardized entrance examination for all institutions of higher education that opt in the system.

Like the primary schools, Peru's secondary schools test students several times each year in order to ensure adequate progress. Annually, students take a cumulative examination focused on the year's studies. The examination is graded on a scale from 0 to 20 with an 11 required for passage. A failing score in either mathematics or language is a secondary grounds for failure on the examination and for repetition of the grade level. More than 500,000 students of primary schools, or nearly 15 percent of the total student population, failed to achieve the necessary credentials for advancement and were required to repeat a grade level in 1998. Approximately 17 percent of students in urban areas have repeated at least one grade level, and this figure rises to 26 percent among students in rural areas; this high rate of failure is attributed to a low number of hours effectively dedicated to core subjects in many schools. Studies have suggested that on average, urban students spend 450 hours annually in such studies compared with only 226 hours per year among rural students. These numbers compare most unfavorably with the average of 1,000 hours of studies for Chilean students. Besides the problem of grade-level repetition, Peru is experiencing an increased level of school drop outs. An April 2000 report, although presenting promising numbers regarding overall matriculation, noted a growing rate of premature school leaving on the part of, especially, secondary students. The exact number of drop outs is not obtainable from government statistics as these statistics reflect many students who have been officially enrolled but who have stopped attending classes. One study suggested that as many as 200,000 students, both from primary and secondary schools, abandon their education mid-year but are still counted in the government statistics.

Given Peru's hierarchical heritage, which has emphasized the education of the privileged class and others who could fare well in a competitive academic setting, vocational training became a national educational priority rather late. Since the early 1970s, increased attention has been placed on this area of education, especially in the area of technology. In the intervening decades, local governments have joined the national government in opening a series of vocational training institutions, although the quality of these new schools has been uneven. Along with the efforts to provide sites for vocational education have come attempts to make this training accessible for citizens from the poorer and traditionally less well-educated segments of the society. Along with the secondary-level vocational educational facilities, the nation has created several higher-level training sites, including the Higher Technological Institute and the Peruvian Institute of Business Administration. These institutions not only provide more advanced instruction to their population but provide training and resources for lower-level vocational schools.

Higher Education

The year 2001 marked the 450th anniversary of the founding of Peru's oldest and most prestigious university, Universidad Nacional Mayor de San Marcos, Universidad del Perú (UNAM). At the other extreme, the nation has recently created universities both in the depths of the Amazon region and in urban areas in an attempt to broaden the availability of higher education to all citizens. These foundational stories describe the past and present of Peruvian higher education. Despite a history of economic and political difficulties, the proportion of the population that attain any given level of higher education compares favorably with the nations of Western Europe and considerably outstrips many nations with a stronger educational infrastructure.

University enrollment in 1900 totaled only 1,000 students; by 1970 that number had risen to 128,000. The period from 1960 to the present reflects enormous growth in the higher education system. In 1962, only seven universities served the nation—liberal arts schools at Trujillo, Cuzco, and Arequipa, as well as the venerable San Marcos in Lima; an engineering school; an agricultural school; and the Pontifical Catholic University of Lima. The need for new institutions brought about a quadrupling of the number of schools during the mid-1960s. With the establishment of new universities and increasing enrollments, the higher education student population of the nation doubled between 1961 and 1965. By 1970 the number of universities had been increased to 34, with an increase to 51 in 1990. Much of this growth came initially in Lima in the form of private universities but, under the demands of a greatly increased population of secondary graduates, the government began to found new institutions in provincial cities, including an agricultural college at Tingo María on the eastern side of the Andes and a university in the Amazonian city of Iquitos.

Peruvian higher education, provided by universities, both public and private; higher institutes; and postgraduate centers, is regulated by the 1993 Constitution, the General Law of Education of 1982, and the University Law of 1983. These laws provide for a good deal of latitude in the functioning of higher education. The funding for state universities comes from government sources, and government funds also subsidize the operations of private universities, teaching institutes, and technological institutes. Universities function autonomously, each one administered by an assembly composed of the rector, the vice-rectors, the deans of the faculties, the director of the graduate school, and representatives from teaching and student groups. This assembly holds the ultimate authority over university policy and practice, including the election of the rector and the vice-rectors. Although students are represented on these boards in significant numbers—four students for every three professors—many students feel that the combination of the complicated methods for selecting their representatives and the sweeping powers of the rector to ignore the decisions of the assembly combine to leave the assembly as an ineffective organ of government and the rector as a virtual academic dictator. The ongoing administration of the university falls to an executive committee composed of the vice-rectors, the deans, and a student body representative, and presided over by the rector. The nationwide community of universities is coordinated by a national assembly of rectors, which acts to provide the objectives of university activities, to ensure inter-school coordination, and to oversee university economic development. The Consejo Nacional para la Autorización de Funcionamiento de Universidades (CONUFA) was created in 1995 in order to oversee the creation of new and the continuation of existing universities, as well as to assist with the problems of private universities. CONUFA has charged Peru with the task of creating a new university dedicated to serving indigenous peoples of the Northern Amazon region, drawing on both public and private funding sources to offer programs especially aimed at the needs and life of the Amazon Basin, including forestry management and medicinal plants. In order to provide accessibility to indigenous students, the languages of instruction at the new school will include Aguarana, Ashaninka, and Shipbio-Conibo. The site for the new university will be the grounds of the Summer Institute of Linguistics.

Five types of higher education facilities serve the nation. The universidad pública (public university) is a government-funded comprehensive institution comparable to U.S. universities. The most prominent of these is UNAM, the National Autonomous University of San Marcos, which is also the oldest and most prestigious. The second category is the universidad privada (private university), also a comprehensive institution, which receives funding either from non-profit sources, such as the Pontifical Catholic University of Peru, or strictly from student tuition. The instituto superior tecnológco (technical higher institute) offers specialized instruction in one or more technologies such as agriculture or engineering. The fourth category is the instituto superior pedagógico (higher pedagogical institute), which is a teacher training facility. Scores of these smaller institutions serve the nation. The final category is the centro superior de postgrado (higher postgraduate centre), a general higher education institution that might be compared with a university branch facility.

The average age of students entering public higher education is 19.7, while private schools average 19.6, reflecting the national tendency for students to take time between secondary and higher education. Admission to vocational training typically requires the student to hold at least the Bachillerator diploma, although some vocational students hold the Certificado de Educación secundaria común completa. Entering students have traditionally been required to sit for either the Concurso or Examen de Ingreso entrance exams. For admission to university level studies, the Certificado de Educación secundaria común completa is required, along with an entrance exam. Increasingly, since 1997 the national bachillerato examination has replaced the examinations provided by individual universities. The number of students failing these examinations each year typically stands at nearly 50 percent. Each university is permitted to determine a numerus clausus for their various departments. Peruvian students pay a maximum of $3,600 tuition for higher education. A 1996 survey indicated that 33.2 percent of students work while studying in the public universities. The number of working students in private universities is 28.1 percent.

Foreign students seeking to attend Peruvian universities must hold the secondary school completion credentials corresponding with their Peruvian counterparts. They are eligible to receive assistance in the form of scholarships and financial aid, as well as being granted employment on campus. Foreign students from countries with which Peru has established articulation agreements can obtain credit for their studies, degrees, and diplomas earned at home, while those from other countries must petition for such recognition. All foreign students are expected to be conversant in Spanish.

The lowest level certification given to students in Peruvian higher education, the Certificado de Educación Secundaria Común Completa, actually represents the completion of secondary schooling. Beyond that, students may earn a Diploma de Aptitud Profesional, which represents a short-term course, averaging one year in duration, focused almost exclusively on a particular professional skill. For more technical fields, the degree of Técnico is awarded. As mentioned, the Bachillerato designation represents a new level of secondary education designed to bridge the gap between secondary education and the university, a gap that has previously resulted in students taking from one to two years between those levels to prepare for the entrance examination. The universities grant the designation of Licenciatura denoting legal licensing in a controlled field. The title Profesor is reserved for those certified to teach in the nation's school system. The highest degrees granted by these universities are Maestría and Doctorado, which are equivalent with the Masters and Doctoral degrees of other countries.

The curriculum leading to these degrees is divided into several stages. The first level of study at the university is termed pregrado (undergraduate) and involves a two-year course of study devoted to general studies. Access to this course of study is based on the competitive entrance examination, either the institution-specific examination or the national Bachillerato examination. Students need to score at a prescribed level on this examination and follow this achievement during the pregrado studies by earning a prescribed number of credits to enter the faculty for their specialization. The period of specialization is two to five years and leads to the title of Bachiller, the equivalent of a bachelor's degree. Successful submission of a thesis, which normally takes six months to one year, leads to the Licenciatura or a professional title such as Ingeniero, Médico, Abogado, or Economista. Achievement of the licentura enables the student to enter professional life. Most of the courses building to the Licenciatura require about five years for completion.

The second level of course work in the university is postgrado (postgraduate). The minimum duration of studies leading to postgraduate degrees is four semesters for the Maestría and an additional four semesters for the Doctorado. Candidates for either degree are required to complete and defend original research work. Maestría candidates must demonstrate proficiency in one foreign language while Doctorado candidates must show proficiency with two. In the Faculty of Law, the professional title is awarded after the completion of three years of study after the Bachiller, while medical students must complete five years of study before earning their degree. Universities also award professional titles of Segunda and Ulterior Especialización.

Higher technical and vocational education is offered in the institutos superiores tecnológicos, which focus on technological courses of study, and the institutos superiores pedagógicos, which provide the bulk of the nation's teacher training. Other education is offered through national schools in various disciplines. As of 2000, the nation had established a National School for Public Health, a National School for Public Administration, and the Diplomatic Academy, as well as separate Academies of Fine Arts and Music. These institutions do not enjoy the autonomy of the universities and are responsible to the Department of Higher Education of the Ministry of Education, as well as to the relevant ministries of their subject area. They offer professional training requiring three, four, or five years for completion. Upon completion, the student is awarded the professional qualifications of Técnico and Experto in the appropriate field.

Administration, Finance, & Educational Research

Oversight of Peruvian education is the responsibility of the Ministry of Education and Culture, which is based in Lima. The Ministry's mission is to provide education through the nation's public schools and to provide oversight to private schools and those under the jurisdiction of other agencies. This mission comprises two major responsibilities: the development of standards and curricula for all schools and the direct administration of those schools under the ministry's jurisdiction. While educational policy created in Lima is in force across the entire country, each of the nation's regions or departments maintains its own budget authority and directs its own administration to provide primary, secondary, and technical education to its students. The Ministry of Education is headed by an appointed minister. Beneath the minister are two vice-ministers. The vice-minister of educational management oversees national directors for initial (preprimary) and primary education, secondary and technical education, teacher training, and adult education and literacy. The vice-minister of institutional management oversees offices of educational quality, administrative support, educational infrastructure, and international cooperation. Universities do not fall under the direct control of the Ministry of Education. Each university and other institution of higher education (excluding the teacher training institutions) retains considerable autonomy within the context of the series of laws controlling higher education. The universities coordinate through but do not yield control to a representative body, the Asemblea Nacional de Rectores (Rectors National Assembly), which is composed of the rectors from all the member universities. This group serves to coordinate university activities, as well as to oversee and facilitate their economic development.

The national constitution dictates that education should receive no less than 20 percent of the overall government budget. National educational expenditures have varied considerably under the various administrations of recent decades. As a percentage of GNP, education expenditures amounted to 3.82 percent in 1970, but had fallen to 2.93 percent in 1980 and 2.21 percent by 1989. In 1997 dollars, total expenditures between 1968 and 1990 ranged from a high of more than $1.5 billion in 1987 to a low of $750 million in 1990, the year in which Alberto Fujimori took office. Under Fujimori's administration, the trend in education budgets was dramatically positive, reaching more than $1.8 billion dollars by the end of the decade—a figure that represented a $255 expenditure per student, an increase in real dollars of 39 percent over the early 1990s. Perhaps more significantly, capital expenditures during the 1990s averaged 12.6 percent of the overall budget, dramatically outstripping the 3 to 5 percent capital outlays of previous decades. Even during budgetary crises during the mid-1990s when the overall budget declined slightly, capital investment continued strongly. Of the 87.4 percent of the budget dedicated to current expenditures, 45 percent went to primary education, 28 percent to secondary, 15 percent to universities, 8 percent to preprimary, and 3 percent to non-university higher education.

Nonformal Education

Accompanying the nation's resurgent interest in education during the 1990s has come an expansion in nonformal education directed at the adult population. Lifelong learning courses in a wide variety of topics are organized to provide less structured vocational training for the workforce and to provide basic education and cultural enrichment to the community. A Certificado de Asistencia is awarded upon the successful completion of each course. Vocational training—especially that focused on an industry with significant, concentrated employment, such as business administration, commerce, and industrial production—is frequently a collaborative effort between the education system and the industry. Trade training is offered to the industries through such arrangements, allowing employees to improve job skills while maintaining a work schedule. Part-time education is offered in both day and evening classes to establish or enhance competencies in the areas of teaching, accountancy, law, computer science, and economics. Adult education authorities also take responsibility for the provision of in-service courses to teachers. Finally, summer classes provide regular students with the opportunity to earn additional educational credits during the summer, while January and February classes provide the same opportunity for teachers.

Teaching Profession

Teachers enjoy considerable privileges in the culture of Peru, especially in the areas farther away from the major population centers where a teacher is likely to be the only person with postsecondary education within an area. Traditionally, teachers fulfill a role as educators and town advisers in the smaller centers of population. Because of their great influence, teachers were, until recent years, prohibited from holding public office due to the belief that they, like a priest, might hold excessive power within the community. Because of the opportunities for advancement afforded by a career in teaching, many have sought this path, especially those from the lower and middle classes who find in teaching a richer opportunity for achievement than might be found elsewhere. Given Peru's limited career opportunities for women, it is not surprising to find that teaching has proven an especially attractive path for women, a fact that is reflected in their representation within the profession.

One of the challenges facing the education system has been the recruitment of sufficient numbers of qualified teachers. Of 110,000 candidates presenting themselves for entrance into the profession in 1999, a total of 29,256 were selected for consideration, yet only17,000 of these candidates passed the test. Only 1 percent of those passing the test managed to score a 14 or higher on the 20-point scale where 11 is the lowest possible passing grade.

Eighty-five pedagogical institutions and more than 50 university education programs provide the initial and continuing training for Peru's 350,000 teachers. While the pedagogical institutions provide a very consistent program of instruction, the university programs vary widely. The training of both initial (preprimary) and primary school teachers is a responsibility of both the nation's universities and non-university institutions. This training typically consists of a course of study spanning 10 academic semesters. Secondary school teachers (professores ) receive their training through the Institutos Superiores Pedagógicos through a five-year course of study. Some secondary teachers are also trained in the universities. Secondary teacher studies culminate with the granting of the professional qualification of Profesor. This certification also includes the mention of the teacher's educational level and disciplinary specialization. Teachers serving the institutions of technical education receive their training at the Institutos Superiores Tecnológicos, completing a three-year course of study before being granted the title of Profesional técnico (technical professional).

The training of teachers for the nation's institutions of higher education is conducted by the universities. Candidates advance through a series of categories of teaching and learning in their given discipline. Educational councils operating independently within each university appoint qualified teachers to one of the professional categories, making their selections through open competitions. The time required for the granting of tenure in each category and the requirements for promotion to a higher level varies both between departments and between universities. The most common model of teacher assessment is for an academic evaluation to be conducted every three years for auxiliary professors, every four years for associate professors, and every six years for principal professors.

Most Peruvian teachers are represented by the Sindicato único de Trabajadores de la Enseñanza del Perú (SUTEP), the Trade Union of Education Workers of Peru. Serving 280,000 teachers of initial, primary, secondary, adult, and special education, SUTEP is governed by a national executive committee composed of 24 members elected at the biannual National Congress. The union was founded in 1972, unifying in the process a wide group of different unions serving different levels of education and diverse geographic territories. In the intervening years, SUTEP has experienced persecution and lack of legal recognition by various governments. In recent years the union's most important objective has been the resistance of a move proposed by various government representatives to privatize education. SUTEP also successfully fought a proposal in 1992 to fire all teachers and rehire them to temporary contracts. Membership in the union is voluntary.

Summary

The recovery and advances in the educational system of Peru between the years 1990 and 2000 were remarkable, not only in terms of budgetary outlays but also in curricular and school quality programs. One of the primary challenges for current and future governments will be to be continue the trajectory of progress begun during the Fujimori years. Where success in meeting that challenge depends largely on economic prosperity coupled with political will, success in other areas presents more complex obstacles. Historically, the most significant impediment to universal quality education in Peru has come from the deep social divisions that have existed for centuries along racial, geographic, economic, and linguistic lines. Although progress has been achieved in addressing these divisions, creating an education system far more fair and open than existed a half century ago, considerable progress remains to be made to allow each student the opportunity to fully explore his or her potential.

According to the Ministry of Education, one of its principal obligations is to develop an ability to respond to new situations in a useful and relevant manner. Progress on the ten-year reformation of education started in 1997 has been a significant attempt to develop that ability; however, more progress is needed to achieve the Ministry's goals. Among those goals are the extension of preprimary education to all children aged 4 and 5, and the elimination of illiteracy among all Peruvians under the age of 40. Despite the progress suggested by curricular changes, centuries-old cultural impediments continue to challenge the education system. In 1999, UNESCO recognized Peru's efforts in the area of literacy, noting their achievement in dropping the rate of illiteracy from 13 percent in 1993 to 6 percent in 1999. Also in the area of illiteracy, a 1999 study by the National Institute of Statistics and Information placed the number of illiterate Peruvians older than the age of 15 at more than 1.9 million, more than 10 percent of the adult population. Of this number, three times as many were women, with the preponderance coming from lower social classes and traditionally deprived regions of the country, illustrating the power and persistence of some of the cultural impediments to equality.

The dream of universal and equal education can only be realized if barriers between races and classes can be breached. Perhaps the most intractable of these barriers is that between the Spanish-speaking majority and the significant indigenous-language-speaking minority found mostly in the Amazonian area east of the Andes. Although progress has been achieved in reaching this population, this challenge promises to remain for many years to come.

Bibliography

Azcueta, Michel, et. al. Aportes para una historia de la educación popular en el Perú, Lima: Tarea, 1990.

Balance de una década: educación para todos en el Perú. Lima: El Foro, 2000.

Gorritti, Luis Carlos, Arturo Miranda, and Gonzalo Pacheco. Cuánto cuesta una educación básica de calidad en el Perú. Lima: Foro Educativo: PREAL, 2000.

Ministry of Education. Educación. Office of Communications, 10 March 2001. Available from http://www.minedu.gob.pe/.

Siederer, León Trahtemberg. Educación para el tercer milenio. Lima: Bruño, 1997.

Vásquez, Amelia Pacheco. El gobierno de la universidad en el Perú. Lima: Fondo de Desarrollo Editorial, Universidad de Lima, 1997.

—Mark Browning

PERU

Compiled from the August 2004 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Republic of Peru

PROFILE

Geography

Area: 1.28 million sq. km. (496,225 sq. mi.); three times larger than California.

Cities: Capital—Lima/Callao metropolitan area (pop. 8.27 million, 2000). Other cities—Arequipa, Chiclayo, Cuzco, Huancayo, Truujillo, Ayacucho, Piura, Iquitos, Chimbote.

Terrain: Western coastal plains, central rugged mountains (Andes), eastern lowlands with tropical forests.

Climate: Coastal area, arid and mild; Andes, temperate to frigid; eastern lowlands, tropically warm and humid.

People

Nationality: Noun and adjective—Peruvian(s).

Population: (2003 est.) 28.4 million.

Annual growth rate: (2003 est.) 1.61%.

Ethnic groups: (1961) Indian 45%. Mestizo 37%. White 15%. Black, Japanese, Chinese, and other 3%.

Religions: (2003) Roman Catholic (90%).

Languages: Spanish (official), Quechua (official), Aymara and a large number of minor Amazonian languages.

Education: (2003) Years compulsory—11. Literacy—about 90.9%.

Health: (2003) Infant mortality rate—36.97/1,000. Life expectancy—68.45 male; 73.43 female.

Work force: (2001, 12.2 million) Manufacturing—12.6%; commerce—27.8%; agriculture—8.4%; mining—0.6%; construction—4.4%; hotels and restaurants—7.8%; transportation and communications—8.4%; other services—29.1% (including government).

Government

Type: Constitutional republic.

Independence: 1821.

Constitution: December 1993.

Branches: Executive—president, two vice presidents, Council of Ministers. Legislative—unicameral Congress. Judicial—Supreme Court and lower courts, Tribunal of Constitutional Guarantees.

Administrative subdivisions: 25 regions subdivided into provinces and districts.

Political parties: Peru Possible, National Unity, We Are Peru, Change 90/New Majority/Let's Go Neighbor/People's Solution, Union For Peru (UPF), American Popular Revolutionary Alliance (APRA), Independent Moralizing Front (FIM), Popular Christian Party (PPC), Popular Action (AP).

Suffrage: Universal over 18; compulsory until age 70 (members of the military may not vote).

Economy (2002)

GDP: (est.) $56.9 billion (current dollars).

Annual growth rate: 5.3%.

Per capita GDP: $2,126 (current dollars).

Inflation rate: 0.2% (annual average).

Natural resources: Minerals, metals, fish, petroleum, natural gas, and forests.

Agriculture: (10% of GDP) Products—sugar, potatoes, rice, yellow corn, cotton, coffee, poultry, beef, milk.

Manufacturing: (26.5% of GDP) Types—fish meal, nonferrous ores and metals, steel, textiles, chemicals, wood, nonmetallic minerals, cement, paper, petroleum products.

Trade: 14.2% of GDP. Other services: 40.9% of GDP Exports—$7.6 billion f.o.b.: gold, copper, fishmeal, textiles, zinc, lead, coffee, and petroleum products. Major markets—US 25.8%, U.K.11.5%, China 7.9%, Switzerland 7.4%, Japan 4.9%, Germany 3.3%, Chile 3.3%, Spain 3.1%. Imports—$7.5 billion c.i.f.: machinery and parts, cereals, chemicals, pharmaceuticals, crude oil and petroleum products, mining equipment, household appliances and automobiles. Major suppliers—U.S. 18.9%, Chile 5.6%, Argentina 8.0%, Brazil 6.5%, China 6.2%, Colombia 6.1%, Ecuador 5.9%, Japan 5.4%.(2001).

PEOPLE

Most Peruvians are "mestizo," a term that usually refers to a mixture of Amerindians and Peruvians of European descent. Peruvians of European descent make up about 15% of the population; there also are smaller numbers of persons of African, Japanese, and Chinese descent. In the past decade, Peruvians of Asian heritage have made significant advancements in business and political fields; a past president, several past cabinet members, and several members of the Peruvian congress are of Japanese or Chinese descent.

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 largescale migration from rural to urban areas, a more homogeneous national culture is developing, mainly along the relatively more prosperous coast.

Peru has two official languages—Spanish and the foremost indigenous language, Quechua. Spanish is used by the government and the media and in education and commerce. Amerindians who live in the Andean highlands speak Quechua and Aymara and are ethnically distinct from the diverse indigenous groups who live on the eastern side of the Andes and in the tropical lowlands adjacent to the Amazon basin.

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. The indigenous populations east of the Andes speak various languages and dialects. Some of these groups still adhere to traditional customs, while others have been almost completely assimilated into the mestizo-Hispanic culture.

Education

Under the 1993 Constitution, primary education is free and compulsory. The system is highly centralized, with the Ministry of Education appointing all public school teachers. Eighty-three percent of Peru's students attend public schools at all levels.

School enrollment has been rising sharply for years, due to a widening educational effort by the government and a growing school-age population. The illiteracy rate is estimated at 9.59% (13.2% for women). Elementary and secondary school enrollment is approximately 7.5 million. Peru's 74 universities (2001), 42% public and 58% private institutions, enrolled about 415,000 students in 2001.

Culture

The relationship between Hispanic and Indian cultures has shaped the face of Peru. During pre-Columbian times, Peru was one of the major centers of artistic expression in America, where pre-Inca cultures, such as Chavin, Paracas, Wari, Nazca, Chimu, and Tiahuanaco developed high-quality pottery, textiles, jewelry, and sculpture. Drawing upon earlier cultures, the Incas continued to maintain these crafts but made even more impressive achievements in architecture. The mountain town of Machu Picchu and the buildings at Cuzco are excellent examples of Inca architectural design.

Peru has passed through various intellectual stages—from colonial Hispanic culture to European Romanticism after independence. The early 20th century brought "indigenismo," expressed in a new awareness of Indian culture. Since World War II, Peruvian writers, artists, and intellectuals have participated in worldwide intellectual and artistic movements, drawing especially on U.S. and European trends.

During the colonial period, Spanish baroque fused with the rich Inca tradition to produce mestizo or Creole art. The Cuzco school of largely anonymous Indian artists followed the Spanish baroque tradition with influence from the Italian, Flemish, and French schools. Painter Francisco Fierro made a distinctive contribution to this school with his portrayals of typical events, manners, and customs of mid-19th-century Peru. Francisco Lazo, forerunner of the indigenous school of painters, also achieved fame for his portraits. Peru's 20th-century art is known for its extraordinary variety of styles and stunning originality.

In the decade after 1932, the "indigenous school" of painting headed by Jose Sabogal dominated the cultural scene in Peru. A subsequent reaction among Peruvian artists led to the beginning of modern Peruvian painting. Sabogal's resignation as director of the National School of Arts in 1943 coincided with the return of several Peruvian painters from Europe who revitalized "universal" and international styles of painting in Peru. During the 1960s, Fernando de Szyszlo, an internationally recognized Peruvian artist, became the main advocate for abstract painting and pushed Peruvian art toward modernism. Peru remains an art-producing center with painters such as Gerardo Chavez, Alberto Quintanilla, and Jose Carlos Ramos, along with sculptor Victor Delfin, gaining international stature. Promising young artists continue to develop now that Peru's economy allows more promotion of the arts.

HISTORY

When the Spanish landed in 1531, Peru's territory was the nucleus of the highly developed Inca civilization. Centered at Cuzco, the Inca Empire extended over a vast region from northern Ecuador to central Chile. In search of Inca wealth, the Spanish explorer Francisco Pizarro, who arrived in the territory after the Incas had fought a debilitating civil war, conquered the weakened people.

The Spanish had 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 South America except Portuguese Brazil. By the time of the wars of independence (1820-24), Lima had become the most distinguished and aristocratic colonial capital and the chief Spanish stronghold in America. 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 Gen. Antonio Jose de Sucre defeated the Spanish troops at Ayacucho, ending Spanish rule in South America. Spain 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. Following a clash between Peru and Ecuador in 1941, the Rio Protocol—of which the United States is one of four guarantors—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 a historic peace treaty and demarcated the border. In late 1999, the governments of Peru and Chile likewise finally implemented the last outstanding article of their 1929 border agreement.

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 companies, and several banks and mining firms.

Because of Velasco's economic mismanagement and deteriorating health, he was replaced by Gen. Francisco Morales Bermudez Cerruti in 1975. Morales Bermudez moved the revolution into a more pragmatic "second phase," tempering the authoritarian abuses of the first phase and beginning the task of restoring the country's economy. Morales Bermudez presided over the return to civilian government in accordance with a new constitution drawn up in 1979. In the May 1980 elections, President Belaunde Terry was returned to office by an impressive plurality.

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 schools of ocean fish that are one of the country's major resources. After a promising beginning, Belaunde's popularity eroded under the stress of inflation, economic hardship, and terrorism.

During the 1980s, cultivation of illicit coca was established in large areas on the eastern Andean slope. Rural terrorism by Sendero Luminoso (SL) and the Tupac Amaru Revolutionary Movement (MRTA) increased during this time and derived significant financial support from alliances with the narcotraffickers. In 1985, the American Popular Revolutionary Alliance (APRA) won the presidential election, bringing Alan Garcia Perez to office. The transfer of the presidency from Belaunde to Garcia on July 28, 1985, was Peru's first exchange of power from one democratically elected leader to another in 40 years.

Economic mismanagement by the Garcia 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 mathematician-turned-politician, Alberto Fujimori, as president in 1990. Fujimori implemented drastic orthodox measures that caused inflation to drop from 7,650% in 1990 to 139% in 1991. Faced with opposition to his reform efforts, Fujimori dissolved Congress in the "auto-coup" of April 4, 1992. He then revised the constitution; called new congressional elections; and implemented substantial economic reform, including privatization of numerous state-owned companies, creation of a more investment-friendly climate, and much improved management of the economy. Fujimori's constitutionally questionable decision to seek a third term and subsequent tainted victory in June 2000 brought political and economic turmoil. A bribery scandal that broke just weeks after he took office 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. He currently resides in his parents' native Japan, amid controversy regarding his involvement in corruption scandals and human rights violations during his tenure as President. A caretaker government presided over new presidential and congressional elections, held in April 2001, which observers considered to be free and fair. The new elected government, led by President Alejandro Toledo, took office July 28, 2001. Regional and Municipal elections were held in November 2002, a majority of which were won by opposition or independent parties.

The Toledo government has restored a high degree of democracy to Peru following the authoritarianism and corruption of the Fujimori years. Suspects tried by military courts during the war against terrorism (1980-2000) are now set to receive new trials in civilian courts. Trials of those accused of corruption and collusion in the corrupt dealings of the Fujimori years are underway. On August 28, 2003, the Truth and Reconciliation Commission (CVR), which had been charged with studying the roots of the violence of the 1980-2000 period, presented its formal report to the President. The Government of Peru is now weighing its response to the CVR's recommendations that human rights violators be tried and that the government take measures to, in some fashion, indemnify parts of the population that suffered during those years, chiefly rural Peruvians of ethnically Indian descent.

President Toledo has made a number of cabinet changes, partly in response to scandals but also to create a more effective government. Toledo's governing coalition has a plurality in Congress and must negotiate on an ad hoc basis with other parties to form majorities on legislative proposals. Toledo's popularity in the polls has suffered throughout the past year, due in part to scandals and in part to dissatisfaction amongst workers with their share of benefits from Peru's macroeconomic success. After strikes by teachers and agricultural producers led to nationwide road blockages in May 2003, Toledo declared a state of emergency that suspended some civil liberties and gave the military power to enforce order in 12 departments.

The state of emergency has since been reduced to only the few areas where the Shining Path terrorist group was operating. Potential candidates and their parties are already beginning to maneuver with an eye on the 2006 elections.

GOVERNMENT

The president is popularly elected for a 5-year term, and the 1993 Constitution permits one consecutive re-election. 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, headed by a prime minister, all appointed by the president. All presidential decree laws or draft bills sent to Congress must be approved by the Council of Ministers.

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 government budget. The president has the power to block legislation with which the executive branch does not agree.

The judicial branch of government is headed by a 16-member Supreme Court seated in Lima. 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 to address human rights issues. 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.

Principal Government Officials

Last Updated: 11/1/04

President: Toledo , Alejandro
First Vice President:
Second Vice President: Waisman , David
Prime Minister: Ferrero Costa , Carlos
Min. of Agriculture: Quijandria , Alvaro
Min. of Commerce & Tourism: Ferrero , Alfredo
Min. of Defense: Chiabra , Roberto
Min. of Economy & Finance: Kuczynski , Pedro Pablo
Min. of Education: Sota , Javier
Min. of Energy & Mines: Sanchez Mejia , Glodomiro
Min. of Foreign Affairs: Rodriguez Cuadros , Manuel
Min. of Health: Mazzetti Soler , Pilar
Min. of Housing: Bruce , Carlos
Min. of Interior: Reategui , Javier
Min. of Justice: Gamarra , Carlos
Min. of Labor: Neves , Javier
Min. of Production: Velasquez , Alfonso
Min. of Transportation: Ortiz , Jose
Min. of Women & Social Development: Romero , Ana Maria
President, Central Bank: Silva Ruete , Javier
Ambassador to the US: Ferrero , Eduardo
Permanent Representative to the UN, New York: De Rivero Barreto , Oswaldo

Peru maintains an embassy 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 New York; Paterson, NJ; Miami; Chicago; Houston; Los Angeles; San Francisco; Boston; Denver and San Juan, Puerto Rico.

POLITICAL CONDITIONS

The Government of Peru is in a state of democratization. Led by President Alejandro Toledo, the executive branch is becoming more transparent and accountable. Previously a rubber-stamp body, the Congress is emerging as a strong counter-balance to the once dominant executive branch, with increased oversight and investigative powers. The executive branch and Congress in conjunction are attempting to reform the judicial branch, which is antiquated and rife with corruption. Peruvians, whose expectations were raised during the campaign, are frustrated at the slow pace of economic recovery and job creation. As discontent rises, the Toledo administration is in a race to strengthen the economy so that popular pressures do not force a shift to more populist measures. So far, the Toledo government remains committed to orthodox economic policies and structural reform, which, over time, should attract sufficient international investment to generate high growth and job creation. Establishment of an impartial, efficient judiciary probably will be the most difficult goal to achieve. Other important political currents stem from the ongoing investigation of Fujimori era corruption and continued subversive activities by terrorist group Sendero Luminoso. Regarding the latter, the Toledo government has been forced to consider putting resources back into the security forces which they had been hoping to use to fund social programs.

ECONOMY

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. The economy stagnated from 1998 through 2001, the result of an "El Niño" weather phenomenon, global financial turmoil, and other factors. Growth strengthened to 3.1% in 2000. The collapse of the Fujimori government and ensuing political instability deterred investment, however, and GDP grew only .2% in 2001. Upon taking office, President Alejandro Toledo, maintained largely orthodox economic policies, and took measures to attract investment. The government brought the deficit down to 2.5% of GDP in 2001, and 2.2% of GDP for 2002. Peru's economy recovered dynamically in 2002, which saw GDP growth of 5.2%. This growth has continued into 2003, with GDP likely to expand 4.0% for the year. GDP currently is $61 billion, in a country of 27.1 million. Banking, retail services, agriculture, mining and manufacturing are key sectors. Inflation is under 2%, with a stable currency and 9.1% unemployment. The fiscal deficit is in control, and likely to meet the IMF target of 1.9% of GDP. Foreign reserves grew over $1 billion in 2002, and are near $9.8 billion. External debt equals 48.5% of GDP.

Foreign Trade and Balance of Payments

The current account deficit dropped in 2002 to about 2.1% of GDP ($1.2 billion. Minerals and metals exports recorded large gains in 2001 and 2002, mostly as a result of the opening of the Antamina copper-zinc mine. By mid-2002, most sectors of the economy were showing gains. Peruvian exports reached $7.65 billion in 2002, with imports of $7.44 billion, producing the country's first trade surplus in 11 years. U.S. Andean Trade Promotion and Drug Eradication Act (ATPDEA) benefits may propel exports above $8.4 billion in 2003. Peru's major trading partners are the U.S., EU, Japan, Colombia, Brazil, China and Venezuela. Over 25% of Peruvian exports are destined for the U.S. and 30% of Peruvian imports come from the U.S. Exports include fish, copper, zinc, gold, petroleum, coffee, and textiles and apparel. Imports include machinery, vehicles, processed food, petroleum and steel. Peru belongs to APEC and the WTO, actively participates in FTAA negotiations and seeks a free trade agreement (FTA) with the U.S. Net international reserves at the end of October 2003 stood at $9.81 billion, up from $9.6 billion at the end of 2002.

Foreign Investment

The Peruvian Government actively seeks to attract both foreign and domestic investment in all sectors of the economy. International investment was spurred by the significant progress Peru made during the 1990s toward economic, social, and political stability, but it slowed again after the government delayed privatizations and as political uncertainty increased in 2000. President Alejandro Toledo has made investment promotion a priority of his government. While Peru was previously marked by terrorism, hyperinflation, and government intervention in the economy, the Government of Peru under former President Alberto Fujimori took the steps necessary to bring those problems under control. Democratic institutions, however, and especially the judiciary, remain weak.

The Government of Peru'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 in Peru, after negligible investment during the 1980s, mainly from the United Kingdom, Spain, the United States, Panama, and Chile. 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 ICSID (the World Bank's International Center for the Settlement of Investment Disputes) or other international or national arbitration tribunals.

Economic Outlook

Growth in 2003 has been driven by construction, investment, domestic demand, and ATPDEA-related exports. Peru's economy is one of the better-managed in Latin America, but challenges remain. Better tax collection and growth are hiking revenues, but government expenditures are keeping pace. Peru secured its $750 million external financing requirement for 2003 with international bond issuances early in the year and raised more than $400 million via a new domestic bond program. However, the government may need $1 billion in external finance in 2004. The government faces continuing strong social pressures to reduce poverty of 54% (under $58/month) and extreme poverty of 24% (under $32/month). Unemployment and underemployment levels total 56%, and growth is insufficient to generate strong new employment. The government lacks revenues for adequate social investment. Boosting long-term growth will require improving the investment climate, reducing corruption, and completing other reforms. Over the next few years, the country is likely to attract both domestic and foreign investment in the tourism, agriculture, mining, petroleum and natural gas, and power industries.

Narcotics

Peru remains the second-largest producer of coca leaf in the world despite an unprecedented 70% reduction in the number of acres of illegal coca leaf under cultivation since 1995. Over 30,000 hectares are currently cultivated in Peru according to the CNC. Ninety percent of all coca leaf grown in Peru is diverted into the illicit narcotics trade. As a result, Peru is a major exporter of high-purity cocaine and cocaine base to markets in South America, Mexico, the United States, and Europe,

The impact of this illicit industry to the national economy is difficult to measure, but estimates range from $300-$600 million. An estimated 200,000 Peruvians are engaged in the production, refining, or distribution of the narcotic. Many economists believe that large flows of dollars into the banking system contribute to the traditional depression in the dollar exchange rate vis-à-vis the sol, and create a climate in which money-laundering can flourish. The Central Bank engages in open market activities to prevent the price of the sol from rising to levels that would otherwise hurt Peruvian exports.

In response to changes in the dynamic of the cocaine trade in the 1990s caused by market forces and interdiction efforts, drug traffickers in Peru have diversified and are now using land, sea and river routes, and likely aircraft as well, to transport cocaine paste and, increasingly, cocaine hydrochloride (HCL) around and out of the country. As part of a possible renewal of the airbridge denial interdiction program, suspended in April 2001, the embassy is working with the Government of Peru to establish a joint counter-narcotics coordination center in Pucallpa, Peru. Aerial interdiction of drug traffickers may resume if it is determined through the work of this center that such traffic exists and once adequate training and safety measures have been instituted by the U.S. and Peruvian Governments. Peru continues to arrest drug traffickers and seize drugs and precursor chemicals, destroy coca labs, disable clandestine airstrips, and prosecute officials involved in narcotics corruption.

In both 2002 and 2003, the Peruvian Government has tended to avoid action that could spark civil unrest in the major coca growing areas. Notwithstanding that preoccupation, the government eradicated 7,200 hectares of coca in 2002 and over 8,000 hectares, so far, in 2003. Until early in 2003, all eradication was done by government workers from the Ministry of the Interior supported by NAS. After that date, the Peruvian Government has worked with the U.S. Agency for International Development (USAID) to offer development assistance in coca-growing areas to farmers who eradicate their coca fields voluntarily.

FOREIGN RELATIONS

In October 1998, Peru and Ecuador signed a peace accord which definitively resolved border differences which over the years had resulted in armed conflict. 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 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.) In December 1999, President Fujimori made the first visit ever to Chile by a Peruvian head of state.

Peru has been a member of the United Nations since 1949, and Peruvian Javier Perez de Cuellar served as UN Secretary General from 1981 to 1991. Former President Fujimori's tainted re-election to a third term in June 2000 strained Peru's relations with the United States and with many Latin American and European countries, but relations improved with the installation of an interim government in November 2000 and the inauguration of Alejandro Toledo in July 2001 after free and fair elections. Peru is planning full integration into the Andean Free Trade Area. In addition, Peru is a standing member of APEC and the WTO, and is an active participant in negotiations toward a Free Trade Area of the Americas (FTAA).

U.S.-PERUVIAN RELATIONS

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 $2.0 billion in 2001, accounting for about 30% of Peru's imports. In the same year, Peru exported $1.9 billion in goods to the United States, accounting for about 27% 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 country.

U.S. Assistance

U.S. bilateral assistance to Peru, including food aid and disaster relief and rehabilitation, totaled nearly $1.4 billion during the 1990-2001 period. The USAID program in Peru is its second largest in Latin America. Since 1962, USAID has provided approximately $2.7 billion to Peru in grants and loans, including $264 million in grants over the last two years. USAID's programs are designed to expand the sustainable opportunities for employment, higher incomes and improved quality of life for all Peruvians.

U.S. assistance to Peru is focused on six strategic objectives: Strengthening democratic processes and institutions; increasing economic opportunities for the poor in selected economic corridors; improving health for Peruvians at high risk; strengthening environmental management to address priority problems; supporting sustained reduction of illicit drug crops in target areas; and expanding opportunities for girls' basic education in targeted rural areas. Improving the quality of life of Peruvians along the Peru-Ecuador border area is an additional objective of U.S. Government development assistance.

Democracy. U.S. assistance seeks to strengthen democratic institutions; promote more effective regional and local governments; promote and protect human rights; foster citizen participation; promote the rule of law to protect rights of the people; fight corruption and adjudicate commercial disputes; and strengthen women's participation in decisionmaking processes. USAID is supporting the efforts of the Government of Peru and Peruvian civil society—at the local, regional and national levels—to achieve a system of governance that is more participative, transparent, and effective. Through USAID, the United States provided more than $24 million in 2002, and is providing more than $10 million in 2003 to support these goals. USAID provided approximately 80% of donor funding to date for the Truth and Reconciliation Commission, allowing the Commission to collect more than 7,000 testimonies related to the political violence occurring over the last two decades.

Poverty Reduction and Economic Growth. USAID aims to improve the policy environment for private sector-led growth; expand access to markets; improve production; improve access to and distribution of food resources; and improve access to public utilities in poverty areas. U.S. food assistance programs reach about 1.8 million poor Peruvians annually in rural highlands and jungle areas, where the majority of the extreme poverty is found. From 1997-2002, USAID provided more than $200 million in food aid. Since 1995, USAID-assisted enterprises and producers have increased sales by approximately $150 million and created more than 38,000 full-time equivalent jobs. USAID microfinance initiatives have provided loans valuing more than $50 million to approximately 100,000 low-income clients. To improve the trade and investment climate, USAID programs are designed to improve fiscal management, government procurement, commercial law and property (including intellectual) rights, sanitary/phytosanitary systems, and customs in order to work better with the World Trade Organization. USAID is increasing productivity and market access of private enterprises through Economic Service Centers located throughout the country.

Health. U.S. assistance is improving child survival and maternal health services—such as immunization, diarrhea control, and prenatal care—and strengthening and expanding the participation of public and private sector entities in HIV/AIDS, tuberculosis and malaria prevention. USAID programs are designed to increase productivity of the work force as well as reduce the potential for social conflict. In family planning, activities with the non-governmental organization (NGOs) sector include efforts to strengthen the capacity of NGOs to supply voluntary family planning methods in urban and rural areas; increase the sustainability of the supply of contraceptives; and disseminate information on family planning methods and services. USAID's support to the Ministry of Health has made substantial improvements in this area. The infant mortality rate fell from 57 per 1,000 births in 1991 to 33 in 2000 while immunization campaigns for children younger than one year of age reached 97.5% coverage. The child mortality rate (children under 5 years old) declined from 91 to 47 per thousand live births.

Environment and Natural Resources Management. USAID's strategy focuses on improving the legal, policy, regulatory, and normative environment and natural resource framework; promoting pollution prevention in selected pre-urban and industrial settings; raising environmental awareness; and protecting natural resources, including sustainable forest management, biological diversity, and fragile ecosystems. USAID has provided important assistance to the Peruvian Government to improve the legal, regulatory, and policy framework that established clearer rules on environmentally sustainable natural resource use. Among the improved frameworks were the National Environmental Council's Structural Framework for Environmental Management, the Ministry of Industry's Environmental Regulation, the Framework Law for Sustainable Use of Natural Resources, and the Pollution Prevention Oriented Environmental Framework Legislation for the Fisheries and related industries.

Alternative development. USAID seeks to reduce coca leaf cultivation through alternative development and environmental protection programs, as well as to reduce drug use and addition through prevention, awareness, and rehabilitation programs. It also seeks to increase the commitment of farmers and communities to reduce illicit coca production voluntarily. USAID, together with Peruvian and U.S. law enforcement actions, has contributed to a 70% reduction of hectares (Ha) devoted to coca cultivation (from 115,300 Ha in 1995 to 31,150 Ha in 2003). From 2002 to 2003 alone there was a 15% reduction in coca cultivation. As a result, over the same period the capacity of Peru to produce cocaine hydrochloride, or HCl, declined from 525 tons to 145 tons. As of 2000, the total gross agricultural production value of the alternative crops in targeted areas outweighed the total gross production value of coca leaf by 39%. As a result of this and other social infrastructure projects (e.g., schools, health clinics, potable water systems, and farm-to-market roads and bridges), the living conditions of over 80,000 families in 1,600 communities were improved. In Peru's coca-growing areas, USAID's Alternative Development Program has provided assistance to about 18,000 families to grow licit crops on more than 32,000 hectares; given credit to 4,800 clients; completed 1,800 community infrastructure projects; and rehabilitated and maintained more than 1,400 kilometers of roads.

Education. This strategic objective is aimed at assisting the Government of Peru and civil society organizations to improve and decentralize primary education, especially for girls. As a result, USAID has contributed to the establishment of a National Network for Girls' Education in Peru, with the participation of government sectoral ministries, NGOs, universities, the business community, and donors. This national network has been very active in increasing consciousness about the importance of girls' education in Peru. In addition, Peru has been chosen as the South America site of the Centers of Excellence in Teacher Training (CETT) that grew out of the 2001 Summit of the Americas in Quebec. USAID is financing the CETT, whose purpose is to improve the practices of classroom teachers so that they become more effective reading instructors in the early primary grades.

Regional Programs. USAID is promoting the economic and social development of Peru-Ecuador border region, in order to provide tangible benefits from the October 1998 Peace Accords signed by the two countries. USAID's assistance to the Peru-Ecuador Bi-National Plan has contributed to improved social and economic conditions for 2,500 families in border areas in Piura and Condorcanqui.

Principal U.S. Embassy Officials

LIMA (E) Address: Avenida La Encalada Cdra 17-Monterrico, Lima; APO/FPO: APO AA 34031; Phone: 511-618-3000; Fax: 618-2397; INMARSAT Tel: Iridium# 8816-7631-1064; Workweek: Monday-Friday, from 8 a.m. to 5 p.m., except U.S. and some Peruvian holidays; Website: usembassy.state.gov/lima

Other Contact Information

U.S. Department of State
Bureau of Western
Hemisphere Affairs
Office of Andean Affairs (Room 5906)
2201 C Street N.W.
Washington, D.C. 20520-6263
Tel: 202-647-3360; Fax: 202-647-2628
Home Page: http://www.state.gov

U.S. Department of Commerce
International Trade Administration
Office of Latin America and the Caribbean
14th and Constitution, NW
Washington, DC 20230
Tel: (202) 482-0475
(800) USA-TRADE;
Fax: (202) 482-0464
Home Page: http://www.ita.doc.gov

American Chamber of Commerce of Peru
Avenida Ricardo Palma 836,
Miraflores, Lima 18, Peru
Tel: (511) 241-0708;
Fax: (511) 241-0709
E-Mail: amcham@amcham.org.pe
Home Page: http://www.amcham.org.pe

TRAVEL

Consular Information Sheet

September 13, 2004

Country Description: Peru is a developing country with an expanding tourism sector. A wide variety of tourist facilities and services are available, with quality varying according to price and location.

Entry/Exit Requirements: A valid U.S. passport is required to enter and depart Peru. Tourists must also provide evidence of return or onward travel. U.S. citizens do not need a visa for a tourist or business-related stay of 60 days or less. Non-resident U.S. citizens remaining in Peru more than 60 days (or the time period granted by the Peruvian immigration officer) must pay a monthly fee to extend their visa for up to three additional months, for a total of six months. U.S. citizens, including children, who remain in Peru over six months without obtaining a residence visa, will have to pay a fine in order to depart Peru. Visitors for other than tourist or short-term business visit purposes must obtain a Peruvian visa in advance. Business workers (under contract) should ascertain the tax and exit regulations that apply to the specific visa they are granted. Peru does not require any immunizations for entry, although it recommends vaccination against Yellow Fever. U.S. citizens whose passports are lost or stolen in Peru must obtain a new passport and present it, together with a police report on the loss or theft, to the main immigration office in downtown Lima, located at Prolongacion Espana 734, Brena, to obtain permission to depart. Visitors with replacement U.S. passports issued in Lima may also request permission to depart at the immigration office set up for that purpose at Jorge Chavez International airport. An airport exit tax of $28 per person must be paid in U.S. currency when departing Peru. There is also a $5 airport fee for domestic flights. For further information regarding entry requirements, travelers should contact the Peruvian Embassy at 1625 Massachusetts Avenue, N.W., 6th Floor, Washington, D.C. 20036; telephone (202) 833-9868; Internet http://www.peruemb.org; or the Peruvian Consulate in Boston, Chicago, Denver, Hartford, Houston, Miami, New York, Paterson (NJ), or San Francisco.

NOTE: As of June 1, 2004, it is illegal for any person within the United States, as well as U.S. citizens, nationals, and resident aliens elsewhere, to fly on Aero Continente. Persons who violate this provision are subject to criminal and civil penalties under U.S. law. However, people who purchased their tickets before June 1, 2004, may request a license to use these tickets by faxing a request to the Treasury Department Office of Foreign Assets Control (OFAC) at (202) 622-1657. Phone questions may be made at (202) 622-2480. Further information on this matter is available on the U.S. Department of the Treasury's website at http://www.treas.gov/ofac. FAA safety restrictions placed on Aero Continente (see Aviation Safety Oversight) are not related to this action.

Additional Requirements for Minors: In an effort to prevent international child abduction, many governments, including Peru's, enforce specific rules at entry/exit points. These often include requiring documentary evidence of relationship and permission for a child's travel from the parent(s) or legal guardian not present. Peru's specific procedures mandate that minors (under 18) who are citizens or residents of Peru and who are traveling alone, with one parent, or with a third party, must present a copy of their birth certificate and written notarized authorization from the absent parent(s) or legal guardian(s), specifically granting permission to travel alone, with one parent or guardian, or with a third party.

When a parent is deceased, a notarized copy of the death certificate is required in lieu of the authorization. If documents are prepared in the United States, the authorization and the birth certificate must be translated into Spanish, notarized, and authenticated by the Peruvian Embassy or Consulate in the United States. If documents are prepared in Peru, only notarization by a Peruvian notary is required. These requirements do not apply to children who enter Peru on U.S. passports as tourists unless they hold dual U.S.-Peruvian citizenship. Children born in Peru of U.S. citizen parents are considered to be Peruvian citizens and must obtain Peruvian passports and the notarized authorization from the non-traveling parent or legal guardian in order to depart Peru. (Diplomats are exempt from this requirement.)

Safety and Security: Activities of the Shining Path (Sendero Luminoso) terrorist group have been generally restricted to certain parts of the interior of Peru, and its capabilities have been greatly diminished due to the many arrests of senior leaders. However, Shining Path is still capable of terrorist actions in urban areas, and it was re-designated by the Secretary of State in 2003 as a "Foreign Terrorist Organization" under 1996 anti-terrorism legislation. The Shining Path has targeted U.S. interests in the past, and there are indications that terrorist organizations such as the Shining Path are continuing to plan actions directed against U.S. citizens and U.S. interests in Peru.

Sporadic, isolated incidents of Shining Path violence have occurred from 2000 to the present in rural provinces of Ayacucho, Huancavelica, Huanuco, Junin, and San Martin. These have included kidnappings and attacks by large, heavily-armed groups believed to be members of Shining Path on Peruvian and foreign pipeline workers in a remote area of the Department of Ayacucho, as well as acts of urban terrorism that have caused fatalities. However, the most common incidents were roadblocks and armed confrontations between Shining Path columns and Peruvian army or police patrols in remote areas. None of these incidents occurred in areas normally visited by tourists.

Mining prospectors, adventure travelers and others considering travel to remote areas of Peru, in particular, are strongly advised to contact the U.S. Embassy in Lima for current security information.

A peace treaty ending the Peru/Ecuador border conflict was signed on October 26, 1998. The Peruvian Government is working to remove mines and unexploded ordnance left over from the conflict, but crossing or approaching the Peru-Ecuador border anywhere except at official checkpoints can still be dangerous. The entire Peru/Colombia border area is very dangerous because of narcotics trafficking and the occasional incursions of armed guerrilla forces from Colombia into Peru's remote areas.

Political demonstrations and laborrelated strikes and marches regularly occur in urban and some rural areas and sometimes affect major highways. They can also cause serious disruptions to road, air and rail transportation. Demonstrations are usually announced in advance. While these activities are usually peaceful, they can escalate into violent confrontations. As a general rule, it is best to avoid large crowds and demonstrations. Visitors are encouraged to keep informed by following the local news and consulting hotel personnel and tour guides. Up to date information on security can also be obtained by calling 1-888-407-4747 toll free in the United States, or, for callers outside of the United States and Canada, a regular toll line at 1-317-472-2328. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays).

The U.S. Embassy in Lima can be contacted by phone at 51-1-434-3000 and the Consular Agency in Cusco's number is 51-84-9-62-1369. For further information concerning travel to Peru, travelers should consult the Department of State's web site found on the Internet at http://travel.state.gov.

U.S. EMBASSY TRAVEL: The U.S. Embassy restricts travel of U.S. Government employees in the following areas, where terrorist groups and narcotics traffickers have recently resorted to violent actions, usually directed against local security forces, local government authorities, and some civilians. Overland travel in or near these areas, particularly at night, is risky. This list below is under continuous review, and travelers may contact the U.S. Embassy for updated information:

Ancash: Restricted: Provinces of Pallasca, Corongo, and Sihuas.

Apurimac: Province of Chincheros.

Ayacucho: Restricted: Provinces of La Mar and Huanta. Daylight road travel from Ayacucho to San Francisco. Permitted: Daylight road travel from Ayacucho City to the city of Huanta. Staying within the city limits of Huanta. Daylight road travel from Pisco to Ayacucho City.

Cusco: Restricted: 20 kilometer swath of territory contiguous to the Apurimac River and Ayacucho Department. Permitted: Everywhere else including Machu Picchu area and city of Cusco.

Huancavelica: Restricted: Provinces of Acobamba, Castrovirreyna, Churcampa, Huancavelica, Tayacaja. Permitted: Staying within the city limits of Huancavelica City. Train travel from Huancayo to Huancavelica City. Daylight road travel from Pisco to Ayacucho City.

Huanuco: Restricted: All areas. Road travel is no longer permitted in this department. Permitted: Flying into and staying within the city limits of Huanuco and Tingo María.

Junin: Restricted: Provinces of Satipo and Concepcion east of the Mantaro River. Permitted: Daylight travel from La Merced to Satipo.

La Libertad: Restricted: Provinces of Pataz and Sanchez Carrión.

Lambayeque: Restricted: Lambayeque Province northeast of Olmos and east of the Pan-American Highway. Permitted: Daytime road travel on the Pan-American Highway.

Loreto: Restricted: 20 kilometer swath of territory contiguous to the Colombian border. Travel on the Putumayo River.

Pasco: Restricted: Province of Oxapampa. Permitted: Flying into and staying within the city limits of Ciudad Constitucion and Puerto Bermudez.

Piura: Restricted: Province of Huancabamba south of Huancabamba City. Permitted: Huancabamba City and areas to the north of the city.

San Martín: Restricted: Provinces of Bellavista, Huallaga, Mariscal Caceres, and Tocache. Permitted: Flying into and remaining within the city limits of Bellavista, Juanjui, Saposoa and Tocache. Daytime road travel from Tarapoto to Juanjui and Bellavista.

Ucayali: Restricted: Provinces of Padre Abad and Coronel Portillo west of Pucallpa City and west of the Ucayali River. Road travel from Pucallpa to Aguaytia and all cities west of Aguaytia. Permitted: Flying into and remaining within the city limits of Pucallpa. The province of Coronel Portillo east of the Ucayali River.

Crime: While the great majority of the approximately 200,000 Americans who visit Peru each year have very positive experiences, a small but growing number have been victims of serious crimes. The information below is intended to raise awareness of the potential for crime and suggest measures visitors can take to avoid becoming a victim.

Violent crime, including carjacking, assault, and armed robbery, is common in Lima. Resistance to violent crime often provokes greater violence, while victims who do not resist usually do not suffer serious physical harm. "Express kidnappings," in which criminals kidnap victims and seek to obtain funds from their bank accounts via automatic teller machines, occur frequently. Thieves often smash car windows at traffic lights to grab jewelry, purses, backpacks, or other visible items from a car. This type of assault is common on main roads leading to Lima's Jorge Chavez International Airport, specifically along De la Marina and Faucett Avenues and Via de Evitamiento, but it can occur anywhere in congested traffic, particularly in downtown Lima. Travelers are encouraged to put all belongings, including purses, in the trunk of a car or taxi. Passengers who hail taxis on the street have been assaulted. Following the May 2003 armed robbery of a U.S. Embassy employee by a taxi driver, the Embassy's Regional Security Officer advised all embassy personnel not to hail taxis on the street. It is safer to use telephone-dispatched radio taxis or car services associated with major hotels. Travelers should guard against the theft of luggage and other belongings, particularly U.S. passports, at the Lima airport.

In downtown Lima and suburban areas frequented by tourists, the risk of street crime is high. American citizens traveling alone or in unescorted groups are more vulnerable to street crime. There is an increased level of criminal activity in Barranco, a popular Lima neighborhood. Visitors should avoid carrying unnecessary credit cards or ATM cards, and keep cash and ID in their front pockets.

Street crime is also prevalent in cities in Peru's interior, including Cusco, Arequipa, Puno and Juliaca, and pickpockets frequent the market areas in these cities. In Cusco, "chokehold" or "strangle" muggings are common, particularly on streets leading off the main square, in the area around the train station, and in the San Blas neighborhood. In 2002 and 2003, there were a number of cases of armed robberies, rapes, other sexual assaults and attempted rapes of U.S. citizens and other foreign tourists in Cusco city and the outlying areas in the vicinity of various Incan ruins. These assaults have occurred during both daylight hours and at night. Some crimes in the city of Cusco have involved the drivers of rogue (or unregistered) taxis. Travelers should use only licensed, registered taxis such as those available from taxi stands in Cusco displaying a blue decal issued by the municipal government on the windshield of the vehicle. Visitors should not accept offers of transportation or guide services from individuals seeking clients on the streets. A U.S. citizen tourist died in Cusco under unexplained circumstances in November 2000, after taking a street-hailed taxi at night. Tourists should be particularly cautious when visiting the Sacsahuayman ruins and the surrounding areas. They should not travel alone, but do so in as large a group as possible. Visitors should also avoid these areas at dawn, dusk or night, since roving gangs are known to frequent these areas and prey on unsuspecting tourists.

U.S. citizen backpackers have also been victims of armed robbery while hiking on trails other than the Inca Trail. A pattern emerging among U.S. citizen and other foreign visitors who are victims of crime in Cusco and its environs reveals that thieves are targeting young tourists who stay in inexpensive accommodations, carry backpacks, and travel alone or in pairs in isolated areas, rather than in large groups.

Peruvian law enforcement authorities have responded to rising crime by increasing the number of tourist police officers patrolling Cusco and its outskirts on horseback and motorcycles. The officers have been dispatched to bus and train terminals, taxi stands, automatic teller machine locations, and other sites frequented by tourists, such as discoteques, restaurants, and craft fairs and shops.

A number of hikers and trekkers have been robbed or assaulted in remote areas of the Huascaran National Park, particularly around the small pueblo of Huayhuash. In September, 2004, four foreign tourists were shot in a robbery/assault at Huayhuash, one of them fatally.

Other groups of trekkers have been held at gunpoint while robbed in the same area, which lacks police protection and communication facilities. In April 2003, two young foreign tourists, one a minor, were raped in the jungle in Ucayali province. Two U.S. Embassy employees were robbed at gunpoint in 2002 while on a walking trail between Huaraz and Monterrey, a popular area for trekking and mountain climbing.

U.S. citizen visitors to Peru should immediately report any criminal activity perpetrated against them to the nearest police station or tourist police ("POLTUR") office. Immediate action may result in the capture of the thieves and the recovery of stolen property. U.S. citizens should also report crimes to the U.S. Embassy in Lima (telephones 434-3000 during business hours, 8:00 a.m. to 5:00 p.m. or 434-3032 for after-hours emergencies if calling from within Lima; add the prefix 01 if calling from the provinces). Victims of crime in Cusco should contact the Consular Agent there (while in Cusco, telephones 84-9-62-1369, 84-22-4112, 23-1474, or 23-3541; from Lima, callers must dial the prefix 084 for Cusco). The telephone number for POLTUR in Lima is 225-8698 or 225-8699; the fax number is 476-7708.

There are also tourist police offices in 15 other cities, including all major tourist destinations, such as Cusco, Arequipa, and Puno. Tourists may register complaints on a 24-hour hotline provided by INDECOPI (National Institute for the Defense of Competition and the Protection of Intellectual Property) by calling 224-7888 or 224-8600 while in Lima. Outside of Lima, callers should dial the prefix (01), then the aforementioned numbers, or call the toll-free number 0-800-42579 from any private telephone (the 800 number is not available from public payphones). The INDECOPI hotline will assist the caller in contacting the police to report a crime, but it is intended primarily to deal with non-emergency situations such as poor service from a travel agency or guide, lost property, or unfair charges.

The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the U.S. Embassy in Lima. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy/Consulate staff can, for example, help you find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed.

U.S. citizens may refer to the Department of State's pamphlet, A Safe Trip Abroad, for ways to promote a trouble-free journey. The pamphlet is available by mail from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, via the Internet at http://www.gpoaccess.gov, or via the Bureau of Consular Affairs home page at http://travel.state.gov.

Medical Facilities: Medical care is generally good in Lima and usually adequate in other major cities, but it is less so elsewhere in Peru. Urban private health care facilities are often better staffed and equipped than public or rural ones. Public hospital facilities in Cusco, the prime tourist destination, are generally inadequate to handle serious medical conditions. Although some private hospital facilities in Cusco may be able to treat acute medical problems, in general the seriously ill traveler should return to Lima for further care as soon as is medically feasible.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and if it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Further, U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. Many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including emergency services such as medical evacuations, but doctors and hospitals in Peru often do not accept U.S. medical insurance, even if the policy applies overseas.

Many foreign doctors and hospitals require payment in cash prior to providing service, and medical evacuation to the United States may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting with your insurer prior to your trip, please ascertain whether payment will be made to the overseas healthcare provider or if you will be reimbursed later for expenses that you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death.

Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State's Bureau of Consular Affairs brochure, Medical Information for Americans Traveling Abroad, available via the Bureau of Consular Affairs home page.

Specific Health Risks: Visitors to high-altitude Andean destinations such as Cusco (11,000 feet), Machu Picchu (8,000 feet), or Lake Titicaca (13,000 feet) should discuss the trip with their personal physician prior to departing the United States. Travel to high altitudes could pose a serious risk of illness, hospitalization, and even death, particularly if the traveler has a medical condition that affects blood circulation or breathing. Several U.S. citizens have died in Peru from medical conditions exacerbated by the high altitude. Tourists or business visitors, especially but not restricted to those who suffer from cardiac-related problems or high blood pressure, and who wish to travel to high-altitude areas in Peru should undergo a medical examination before traveling. All people, even healthy and fit persons, will feel symptoms of hypoxia (lack of oxygen) upon arrival at high-altitude. Most people will have increased respiration and increased heart rate. Many people will have headaches, difficulty sleeping, lack of appetite, minor gastric and intestinal upsets, and mood changes. Most people may need time to adjust to the altitude. To help prevent these complications, consider taking acetazolamide (Diamox) after consulting your personal physician, avoid alcohol and smoking for at least one week after arrival at high altitudes, and limit physical activity for the first 36 to 48 hours after arrival at high altitudes.

In jungle areas east of the Andes mountain range (cordillera), chloroquine-resistant malaria is a serious problem. Cholera, yellow fever, hepatitis, dengue fever and other exotic and contagious diseases are also present. Yellow fever is endemic in certain areas of Peru; in general, those areas are located on the eastern side of the cordillera and at lower elevations in jungle areas. The U.S. Centers for Disease Control and the Peruvian government recommend that travelers to Peru receive a yellow fever vaccination and carry documentation of the vaccination with them on their trip. Diarrhea caused by contaminated food or water may affect travelers, and it is potentially serious. If it persists, please seek medical attention. Local tap water in Peru is not considered potable. Only bottled water or treated (disinfected) water should be used for drinking. Fruits and vegetables should be washed with care, and meats and fish should be thoroughly cooked. Eggs, meat, unpasteurized cheese, and seafood are common sources of the bacteria that can cause travelers' diarrhea, and they should be properly prepared or avoided.

Over the last two and one-half years, four U.S. citizen visitors have died during cosmetic surgery operations in Lima and another major city. The most recent death of this nature occurred in March 2003. All four patients were undergoing liposuction procedures.

Other Health Information: Information on vaccinations and other health precautions may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://www.cdc.gov. For information about outbreaks of infectious diseases abroad consult the World Health Organization's website at http://www.who.int/en/. Further health information for travelers is available at http://www.who.int/ith.

Adventure Travel Safety: Inca Trail hikers are significantly safer if they are part of a guided group trail hike. To protect natural resources along the Inca Trail, the Peruvian Government raised the fees for hiking the trail in 2001 and instituted limits on the numbers of hikers permitted on the trail. Hikers in peak season (June-August) are advised to make reservations for the Inca Trail in advance via a travel agency. Visitors should always register when entering national parks. Hikers should exercise extreme caution in steep or slippery areas, which are neither fenced nor marked. Several climbers have died or suffered serious injuries after falling while climbing Huayna Picchu, a peak near Machu Picchu. Only very basic medical assistance is available at Machu Picchu.

Adventure travelers should be aware that rescue capabilities are limited. In recent years, several hikers have died, and others have had to be rescued after serious accidents in the Huaraz region of the Cordillera Blanca Mountains, where Peru's highest peaks are located. Three experienced U.S. citizen mountain climbers perished in an avalanche on Huascaran Mountain in 2002. Most rescues are carried out on foot because helicopters cannot fly to the high-altitude areas where hikers are stranded. U.S. citizens who plan to visit these mountainous areas in Ancash province should contact the Peruvian National Police's High Mountain Rescue Unit ("USAM") at telephone 51-44-793327, 793291, or 793333, fax phone 51-44-793292, or E-mail: usam@pnp.gob.pe. Some USAM officers read and/or speak English.

Swimmers, rafters and boaters should be aware of strong currents in the Pacific Ocean and fast-moving rivers. An American citizen was killed while white-water rafting in 2002. Travelers are advised to seek advice from local residents before swimming in jungle lakes or rivers, where large reptiles or other dangerous creatures may live; caymans, resembling alligators, are found in jungle areas of Peru. One crocodile species is native to the Tumbes area, but it is limited in numbers and range. All adventure travelers should leave detailed written plans and a timetable with a friend and with local authorities in the region, and they should carry waterproof identification and emergency contact information.

Travelers to all remote areas should check with local authorities about geographic, climatic and security conditions.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Peru is provided for general reference only, and it may not be totally accurate in a particular location or circumstance.

Safety of Public Transportation: Poor
Urban Road Conditions/Maintenance: Poor
Rural Road Conditions/Maintenance: Poor
Availability of Roadside Assistance: Poor

Road travel at night is extremely dangerous due to poor road markings and frequent unmarked road hazards. Drivers should not travel alone on rural roads, even in daylight. Convoy travel is preferable. Spare tires, parts and fuel are needed when traveling in remote areas, where distances between service areas are great. Fog is common on coastal and mountain highways, and the resulting poor visibility frequently causes accidents. Inter-city bus travel is dangerous. In 2001, several inter-city buses were held up at night by armed robbers, who forced passengers off buses and stole all their belongings. Bus accidents resulting in multiple deaths and injuries are common, and they are frequently attributed to excessive speed, poor bus maintenance, and driver fatigue. Several foreigners, including four U.S. citizens, were killed or seriously injured in bus accidents in 1999-2003. For further information, travelers may contact their nearest automobile club, or (for information in Spanish) the Associacion Automotriz del Peru, 299 Avenida Dos de Mayo, San Isidro, Lima 27, Peru, telephone 51-1-440-0495.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Peru's Civil Aviation Authority as Category 1—in compliance with international aviation safety standards for oversight of Peru's air carrier operations. For further information, travelers may contact the Department of Transportation within the United States at tel. 1-800-322-7873, or visit the FAA's internet web site at http://www.faa.gov/avr/iasa/index.cfm. Because of reliability issues and operational concerns, the U.S. Embassy in Lima prohibited the use of one Peruvian carrier, Aero Continente, by employees of the U.S. government traveling on official business, unless they received special permission.

At present, a separate prohibition applies to all transactions with Aero Continente by U.S. persons.

Customs Regulations: The government of Peru prohibits the exportation of archaeological artifacts and colonial art. These restrictions include archaeological material from the pre-Hispanic cultures and certain ethnological materials from the colonial period of Peru, which are considered protected Peruvian cultural patrimony. U.S. law enforcement authorities can take action even after importation into the U.S. has occurred. For more information, contact Art Historian Dr. Jaime Mariazza, National Cultural Institute (Instituto Nacional de Cultura—INC), Director of Direccion de Registro Nacional de Patrimonio Cultural Mueble, or his assistant Rocio Sierra, at 476-9900, and/or Archaeologist Ms. Elia Centurion, Direccion de Registro de Patrimonio Arqueologico, at 463-5070 or 463-2009. Travelers buying art should be aware that unscrupulous traders may try to sell them articles that cannot be exported from Peru. Such articles may be seized by Peruvian customs authorities, and the traveler may be subject to criminal penalties. In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products are illegal and bringing them back to the United States may result in forfeitures and/or fines. A current list of those countries with serious problems in this regard can be found here.

The U.S. Customs Service may impose corresponding import restrictions in accordance with the Convention on Cultural Property Implementation Act. (For further information, please contact the Customs Service at telephone (202) 927-2336 or consult the Internet site at http://exchanges.state.gov/education/culprop.) Travelers who purchase reproductions of colonial or pre-colonial art should buy only from reputable dealers, and they should insist on documentation from Peru's National Institute of Culture (INC) showing that the object is a reproduction and may be exported. Peruvian customs authorities may retain articles lacking such documentation and forward them to INC for evaluation. If found to be reproductions, the objects eventually may be returned to the purchaser, but storage and shipping charges are the responsibility of the purchaser.

Vendors in jungle cities and airports sell live animals and birds, as well as handicrafts made from insects, feathers, or other natural products. Under Peruvian law, protecting the country's biodiversity, it is illegal to remove certain flora and fauna items from their place of origin to another part of Peru or to export them to a foreign country. Travelers have been detained and arrested by the Ecology Police in Lima for carrying such items.

Information on U.S. regulations for the importation of plant and animal products is available from the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture via the Internet at http://www.aphis.usda.gov. Travelers bringing animals to the United States may also wish to consult with U.S. Customs or the Fish and Wildlife Service of the U.S. Department of Interior.

Peru currently bans the importation of domestic house cats from the United States and other countries. House cats arriving from the U.S., or cats of U.S. origin, will be returned to the country of origin at the owner's expense or destroyed in Peru.

Additional information about the protection of Peru's cultural heritage and its flora and fauna is available from the Embassy of Peru.

Peruvian customs regulations require that many electronic items or items for commercial use be declared upon entering the country. Failure to make a full and accurate declaration can lead to arrest and incarceration.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Peruvian laws, even unknowingly, may be expelled, arrested or imprisoned.

Penalties for possession, use, or trafficking in illegal drugs in Peru are strict, and convicted offenders can expect jail sentences and heavy fines. Peruvian police are efficient at detecting drug smugglers at Lima's international airport and at land border crossings. Since 1995, scores of U.S. citizens have been convicted of narcotics trafficking in Peru. Many of these U.S. citizens were recruited in the United States by drug traffickers who offered free trips to Peru and the chance to earn quick cash. Anyone arrested on drug charges, regardless of nationality, will face protracted pre-trial detention in poor prison conditions.

Further information on prison conditions and the judicial system is available in the Department of State's Human Rights Report on Peru, available via the Internet at http://www.state.gov.

Travelers should be aware that some drugs and other products readily available over-the-counter or by prescription in Peru are illegal in the United States. The prescription sedative flumitrapezan, trade name rohypnol, is one such drug; others may come on the market at any time. Although coca-leaf tea is a popular beverage and folk remedy for altitude sickness in Peru, possession of these tea bags, which are sold in most Peruvian supermarkets, is illegal in the United States.

Under the PROTECT Act of April 2003, it is a crime, prosecutable in the United States, for a U.S. citizen or permanent resident alien, to engage in illicit sexual conduct in a foreign country with a person under the age of 18, whether or not the U.S. citizen or lawful permanent resident alien intended to engage in such illicit sexual conduct prior to going abroad. For purposes of the PROTECT Act, illicit sexual conduct includes any commercial sex act in a foreign country with a person under the age of 18. The law defines a commercial sex act as any sex act, on account of which anything of value is given to or received by a person under the age of 18.

Under the Protection of Children from Sexual Predators Act of 1998, it is a crime to use the mail or any facility of interstate or foreign commerce, including the Internet, to transmit information about a minor under the age of 16 for criminal sexual purposes that include, among other things, the production of child pornography. This same law makes it a crime to use any facility of interstate or foreign commerce, including the Internet, to transport obscene materials to minors under the age of 16.

Other Legal Issues: Civil marriage in Peru of U.S. citizen non-residents to Peruvians is difficult, and documentary requirements vary by location. The Peruvian fiancé(e) should check with the municipality where the marriage will take place to determine what documents are required. The U.S. Embassy does not authenticate U.S. civil documents for local use. All U.S. documents must be translated and authenticated by a Peruvian consular officer in the United States.

Disaster Preparedness: Peru is an earthquake-prone country. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov/.

Children's Issues: In Peru, international adoptions are strictly regulated. An adoptive child must be abandoned by the birth parents and placed with a government-approved agency before he or she can be adopted internationally, unless the adoptive parent has Peruvian nationality or is a Peruvian resident. Current information on Peruvian adoption procedures and the immigrant visa application process for orphans is available from the Consular Section of the U.S. Embassy. Information on pre-adoption requirements and the I-600 orphan petition process is available from the U.S. Department of Homeland Security (formerly the Immigration and Naturalization Service, or USINS) office at the U.S. Embassy, telephone 51-1-434-3000, extensions 3011 and 3012 from 8 a.m. to 12:00 p.m. Monday through Friday.

Registration/Embassy Location: U.S. citizens living in or visiting Peru are encouraged to register at the Consular Section of the U.S. Embassy in Lima and obtain updated information on travel and security in Peru. The Consular Section is open for American Citizen Services, including registration, from 8:00 a.m. to 12:00 noon weekdays, excluding U.S. and Peruvian holidays. The U.S. Embassy is located in Monterrico, a suburb of Lima, at Avenida Encalada, Block Seventeen; telephone 51-1-434-3000 during business hours (8:00 a.m. to 5:00 p.m.), or 51-1-618-2935 for afterhours emergencies; fax 51-1-618-2397, or 618-2724 (American Citizen Services Unit); Internet web site—http://peru.usembassy.gov/wwwhmain.html. This website provides information and a link to allow Americans resident in Peru to sign up for an embassy newsletter, but it does not yet have interactive capability to respond to specific inquiries. The U.S. Consular Agency in Cusco is located in the Binational Center (Instituto Cultural Peruana Norte Americano, ICPNA) at Avenida Tullumayo 125; telephone 51-84-24-5102; fax 51-84-23-35-41; cellular phone 51-84-9-62-1369; Internet address consagentcuzco@terra.com.pe. The Consular Agency can provide information and assistance to U.S. citizen travelers who are victims of crime or need other assistance, but it cannot replace lost or stolen U.S. passports, which are processed at the U.S. Embassy in Lima.

International Adoption

January 2005

The information below has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at www.travel.state.gov/family.

Disclaimer: The information in this circular relating to the legal requirements of specific foreign countries is provided for general information only. Questions involving interpretation of specific foreign laws should be addressed to foreign legal counsel.

Please Note: All international adoptions in Peru must be processed through a Peruvian-approved U.S. adoption agency. As of April 2001, there are 14 approved agencies. There is a different process for domestic adoptions, which may be requested by Peruvian nationals, some blood relatives, or non-Peruvians who have lived in Peru for more than two years. Please note that these procedures for domestic adoptions do not always comply with U.S. and Peruvian international adoption requirements and often cause problems when Americans who have completed the adoption of a Peruvian child are applying for the child's U.S. immigrant visa.

Availability of Children for Adoption: Recent U.S. immigrant visa statistics reflect the following pattern for visa issuance to orphans (IR-3 and IR-4 visas combined)*:

FY-2002: 33
FY-2001: 28
FY-2000: 46
FY-1999: 23
FY-1998: 21

*Immediate Relative (IR)-3 visas are issued to orphans adopted in Peru. IR-4 visas are issued to orphans adopted or re-adopted in the United States.

A Peruvian child must be abandoned in order to be eligible for international adoption. A Peruvian court must make a legal finding of abandonment before the child is assigned to prospective parents. In effect, this provision prohibits so-called "direct" adoptions, in which the birth parent gives a child directly (or via an intermediary) to prospective parents for adoption, and prohibits adoptive parents from searching for and locating a child on their own. At the current time, there is a scarcity of infants available for adoption and a large number of prospective adoptive parents wishing to adopt infants.

Although Peruvian law allows children up to age 18 to be adopted, it is important to note that U.S. law requires that the I-600 petition to classify an adopted child as an immediate relative be filed before the child's 16th birthday.* See below under "U.S. Immigration Requirements" for more information on filing the I-600.

Peruvian Adoption Authority: The government office responsible for adoptions in Peru is the Ministry for Women and Social Development (Ministerio de la Mujer y Desarrollo Social) or MIMDES. MIMDES is responsible for identifying possible orphans for assignment to prospective adoptive parents, assisting the court's investigation of the child's background, contracting and coordinating with the approved U.S. adoption agencies, and certifying the court-issued adoption decree. They also establish post-adoption controls to ensure the child's adequate development and care in the U.S.

Peruvian Age and Civil Status Requirements: An adopting parent must be at least 18 years older than the child to be adopted. In some cases, the prospective parents may not be more than 55 years old. Both married and single persons may adopt in Peru; however married couples must jointly present the adoption application. Both spouses must be present to adopt in Peru. Applications from unmarried couples will not be considered.

Residency Requirements: There are no residency requirements for international adoptions.

Time Frame: International adoption from Peru can be time-consuming. Recent experience suggests the total time (from the initial inquiry with an approved adoption agency until the child arrives in the U.S.) can take several months and often over one year. Although both adoptive parents do not need to be present in Peru for the entire time, both must be present for the provisional placement, evaluation, and ratification of the adoption through the Court. Only the applicant must be present for the visa interview (with a legal representative), but the U.S. Embassy encourages at least one parent to attend. Adoptive parents should plan to stay in Peru for approximately eight weeks, and sometimes longer. The BCIS and the Immigrant Visa unit at the U.S. Embassy will do their best to process visa paperwork for an adopted child quickly, but parents should be prepared for unexpected delays.

Adoption Agencies and Attorneys: Only MIMDES-approved agencies are permitted to initiate foreign adoptions in Peru. Each licensed agency must designate at least one local (Peruvian) representative. MIMDES reviews each agency's status every two years.

Peruvian Fees: Adoption agencies estimate that the total cost of an adoption in Peru will be $5,000 to $7,000. This includes: Office of Adoptions (MIMDES) $1,040; Peruvian Legal Fees $3,000—$4,000; Other Peruvian adoption costs $1,000. These fees are subject to change without notice, and will vary according to the current foreign exchange rate.

Peruvian Adoption Procedures: For prospective parents, the process begins when they apply through one of the approved U.S. agencies to MIMDES for permission to adopt. When the dossier of the prospective parents is completed (see documentary requirements below) and approved by the MIMDES Board of Directors, MIMDES tentatively assigns a child to those parents and forwards information regarding the assigned child to the parents' adoption agency.

MIMDES will give the U.S. agency a specific amount of time (usually 15-20 working days) to confirm the parents' intention to adopt the child. The parents then must travel to Peru for the adoption proceedings. If married, both parents must attend the ratification of the adoption. Provisional custody is awarded to the prospective parents shortly after their arrival in Peru. After 10-15 days, a social worker assigned to the case will issue a report attesting to the compatibility and bonding of the child and its prospective parents. If the report is favorable, both of the adoptive parents appear in court to ratify their adoption request, after which the judge may issue the final adoption decree. Please review current reports online at www.travel.state.gov/family for more detailed information.

Documentary Requirements for the Peruvian Adoption: Required documents include but are not limited to: the adoptive parents' birth and marriage certificates, home studies, physical and psychological health certificates, financial and employment certifications, references, and police clearances. These documentary requirements are established by Peruvian law and do not change frequently, but parents should nonetheless check with their agencies to be certain they are prepared to meet all requirements.

Authentication Process: All U.S. documents submitted to the Peruvian government, such as birth, death, and marriage certificates, must be authenticated. For additional information about authentication procedures, see the Judicial Assistance page of the Bureau of Consular Affairs Web site at http://travel.state.gov.

Peruvian Embassy and Consulates in the United States: The Embassy of Peru; 1700 Massachusetts Avenue, NW; Washington, D.C. 20036; (202) 833-9860.

Peru has Consulates General in Miami, Florida; Patterson, New Jersey; Los Angeles, California; Houston, Texas; Chicago, Illinois; New York, New York; and San Francisco, California.

Peru also has appointed several Honorary Consuls who may help you obtain more information, but do not offer the full services of the Consulates listed above. Honorary Consuls are available in Tampa, Florida; Atlanta, Georgia; Honolulu, Hawaii; New Orleans, Louisiana; St. Louis, Missouri; Tulsa, Oklahoma; San Juan, Puerto Rico; Dallas, Texas; Salt Lake City, Utah; and Seattle, Washington.

U.S. Immigration Requirements: A child adopted by a U.S. citizen must obtain an immigrant visa before he or she can enter the U.S. as a lawful permanent resident. Please see the International Adoption section of this book for more details and review current reports online at travel.state.gov/family

U.S. Embassy in Peru: As soon as prospective adoptive parents arrive in Peru, they should contact both the Bureau of Citizenship and Immigration Services (BCIS) and the Consular Section of the U.S. Embassy in order to register their presence in Peru. Both are located at: Embassy of the United States of America; Avenida La Encalada, Cuadra 17 s/n; Monterrico, Surco, Lima 33; Peru; (51-1) 434-3000; Fax 434-3037; http://usembassy.state.gov/lima/wwwhmain.html.

Questions: Specific questions regarding adoption in Peru may be addressed to the Bureau of Citizenship and Immigration Services or the Immigrant Visa Unit at the U.S. Embassy in Lima, Peru (Avenida La Encalada, Cuadra 17 s/n, Monterrico, Surco, Lima 33, Peru, (51-1) 434-3000, fax 434-3065). Parents may also contact the Office of Children's Issues, SA-29, 2201 C Street, NW, U.S. Department of State, Washington, DC 20520-2818, toll-free Tel: 1-888-404-4747 with specific questions.

PERU

Compiled from the December 2003 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Republic of Peru

PROFILE
PEOPLE
HISTORY
GOVERNMENT
POLITICAL CONDITIONS
ECONOMY
FOREIGN RELATIONS
U.S.-PERUVIAN RELATIONS
TRAVEL

PROFILE

Geography

Area: 1.28 million sq. km. (496,225 sq. mi.); three times larger than California.

Cities: Capital—Lima/Callao metropolitan area (pop. 8.27 million, 2000). Other cities—Arequipa, Chiclayo, Cuzco, Huancayo, Truujillo, Ayacucho, Piura, Iquitos, Chimbote.

Terrain: Western coastal plains, central rugged mountains (Andes), eastern lowlands with tropical forests.

Climate: Coastal area, arid and mild; Andes, temperate to frigid; eastern lowlands, tropically warm and humid.

People

Nationality: Noun and adjective—Peruvian(s).

Population: (2003 est.) 28.4 million.

Annual growth rate: (2003 est.) 1.61%.

Ethnic groups: (1961) Indian 45%. Mestizo 37%. White 15%. Black, Japanese, Chinese, and other 3%.

Religion: (2003) Roman Catholic (90%).

Languages: Spanish (official), Quechua (official), Aymara and a large number of minor Amazonian languages.

Education: (2003) Years compulsory—11. Literacy—about 90.9%.

Health: (2003) Infant mortality rate—36.97/1,000. Life expectancy—68.45 male; 73.43 female.

Work force: (2001, 12.2 million) Manufacturing—12.6%; commerce—27.8%; agriculture—8.4%; mining—0.6%; construction—4.4%; hotels and restaurants—7.8%; transportation and communications—8.4%; other services —29.1% (including government).

Government

Type: Constitutional republic.

Independence: 1821.

Constitution: December 1993.

Branches: Executive—president, two vice presidents, Council of Ministers. Legislative—unicameral Congress. Judicial—Supreme Court and lower courts, Tribunal of Constitutional Guarantees.

Administrative subdivisions: 25 regions subdivided into provinces and districts.

Political parties and movements: Peru Possible, National Unity, We Are Peru, Change 90/New Majority/Let's Go Neighbor/People's Solution, Union For Peru (UPF), American Popular Revolutionary Alliance (APRA), Independent Moralizing Front (FIM), Popular Christian Party (PPC), Popular Action (AP).

Suffrage: Universal over 18; compulsory until age 70 (members of the military may not vote).

Economy (2002)

GDP: (est.) $56.9 billion (current dollars).

Annual growth rate: 5.3%.

Per capita GDP: $2,126 (current dollars).

Inflation rate: 0.2% (annual average).

Natural resources: Minerals, metals, fish, petroleum, natural gas, and forests.

Agriculture: (10% of GDP) Products—sugar, potatoes, rice, yellow corn, cotton, coffee, poultry, beef, milk.

Manufacturing: (26.5% of GDP) Types—fish meal, nonferrous ores and metals, steel, textiles, chemicals, wood, nonmetallic minerals, cement, paper, petroleum products.

Trade: 14.2% of GDP. Other services: 40.9% of GDP Exports—$7.6 billion f.o.b.: gold, copper, fishmeal, textiles, zinc, lead, coffee, and petroleum products. Major markets—US 25.8%, U.K.11.5%, China 7.9%, Switzerland 7.4%, Japan 4.9%, Germany 3.3%, Chile 3.3%, Spain 3.1%. Imports—$7.5 billion c.i.f.: machinery and parts, cereals, chemicals, pharmaceuticals, crude oil and petroleum products, mining equipment, household appliances and automobiles. Major suppliers—U.S. 18.9%, Chile 5.6%, Argentina 8.0%, Brazil 6.5%, China 6.2%, Colombia 6.1%, Ecuador 5.9%,Japan 5.4%. (2001).

PEOPLE

Most Peruvians are "mestizo," a term that usually refers to a mixture of Amerindians and Peruvians of European descent. Peruvians of European descent make up about 15% of the population; there also are smaller numbers of persons of African, Japanese, and Chinese descent. In the past decade, Peruvians of Asian heritage have made significant advancements in business and political fields; a past president, several past cabinet members, and several members of the Peruvian congress are of Japanese or Chinese descent. 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 largescale migration from rural to urban areas, a more homogeneous national culture is developing, mainly along the relatively more prosperous coast.

Peru has two official languages—Spanish and the foremost indigenous language, Quechua. Spanish is used by the government and the media and in education and commerce. Amerindians who live in the Andean highlands speak Quechua and Aymara and are ethnically distinct from the diverse indigenous groups who live on the eastern side of the Andes and in the tropical lowlands adjacent to the Amazon basin.

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. The indigenous populations east of the Andes speak various languages and dialects. Some of these groups still adhere to traditional customs, while others have been almost completely assimilated into the mestizo-Hispanic culture.

Education

Under the 1993 Constitution, primary education is free and compulsory. The system is highly centralized, with the Ministry of Education appointing all public school teachers. Eighty-three percent of Peru's students attend public schools at all levels.

School enrollment has been rising sharply for years, due to a widening educational effort by the government and a growing school-age population. The illiteracy rate is estimated at 9.59% (13.2% for women). Elementary and secondary school enrollment is approximately 7.5 million. Peru's 74 universities (2001), 42% public and 58% private institutions, enrolled about 415,000 students in 2001.

Culture

The relationship between Hispanic and Indian cultures has shaped the face of Peru. During pre-Columbian times, Peru was one of the major centers of artistic expression in America, where pre-Inca cultures, such as Chavin, Paracas, Wari, Nazca, Chimu, and Tiahuanaco developed high-quality pottery, textiles, jewelry, and sculpture. Drawing upon earlier cultures, the Incas continued to maintain these crafts but made even more impressive achievements in architecture. The mountain town of Machu Picchu and the buildings at Cuzco are excellent examples of Inca architectural design.

Peru has passed through various intellectual stages—from colonial Hispanic culture to European Romanticism after independence. The early 20th century brought "indigenismo," expressed in a new awareness of Indian culture. Since World War II, Peruvian writers, artists, and intellectuals have participated in worldwide intellectual and artistic movements, drawing especially on U.S. and European trends.

During the colonial period, Spanish baroque fused with the rich Inca tradition to produce mestizo or Creole art. The Cuzco school of largely anonymous Indian artists followed the Spanish baroque tradition with influence from the Italian, Flemish, and French schools. Painter Francisco Fierro made a distinctive contribution to this school with his portrayals of typical events, manners, and customs of mid-19th-century Peru. Francisco Lazo, forerunner of the indigenous school of painters, also achieved fame for his portraits. Peru's 20th-century art is known for its extraordinary variety of styles and stunning originality.

In the decade after 1932, the "indigenous school" of painting headed by Jose Sabogal dominated the cultural scene in Peru. A subsequent reaction among Peruvian artists led to the beginning of modern Peruvian painting. Sabogal's resignation as director of the National School of Arts in 1943 coincided with the return of several Peruvian painters from Europe who revitalized "universal" and international styles of painting in Peru. During the 1960s, Fernando de Szyszlo, an internationally recognized Peruvian artist, became the main advocate for abstract painting and pushed Peruvian art toward modernism. Peru remains an art-producing center with painters such as Gerardo Chavez, Alberto Quintanilla, and Jose Carlos Ramos, along with sculptor Victor Delfin, gaining international stature. Promising young artists continue to develop now that Peru's economy allows more promotion of the arts.

HISTORY

When the Spanish landed in 1531, Peru's territory was the nucleus of the highly developed Inca civilization. Centered at Cuzco, the Inca Empire extended over a vast region from northern Ecuador to central Chile. In search of Inca wealth, the Spanish explorer Francisco Pizarro, who arrived in the territory after the Incas had fought a debilitating civil war, conquered the weakened people. The Spanish had 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 South America except Portuguese Brazil. By the time of the wars of independence (1820-24), Lima had become the most distinguished and aristocratic colonial capital and the chief Spanish stronghold in America. 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 Gen. Antonio Jose de Sucre defeated the Spanish troops at Ayacucho, ending Spanish rule in South America. Spain 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. Following a clash between Peru and Ecuador in 1941, the Rio Protocol—of which the United States is one of four guarantors— 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 a historic peace treaty and demarcated the border. In late 1999, the governments of Peru and Chile likewise finally implemented the last outstanding article of their 1929 border agreement.

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 companies, and several banks and mining firms.

Because of Velasco's economic mismanagement and deteriorating health, he was replaced by Gen. Francisco Morales Bermudez Cerruti in 1975. Morales Bermudez moved the revolution into a more pragmatic "second phase," tempering the authoritarian abuses of the first phase and beginning the task of restoring the country's economy. Morales Bermudez presided over the return to civilian government in accordance with a new constitution drawn up in 1979. In the May 1980 elections, President Belaunde Terry was returned to office by an impressive plurality.

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 schools of ocean fish that are one of the country's major resources. After a promising beginning, Belaunde's popularity eroded under the stress of inflation, economic hardship, and terrorism.

During the 1980s, cultivation of illicit coca was established in large areas on the eastern Andean slope. Rural terrorism by Sendero Luminoso (SL) and the Tupac Amaru Revolutionary Movement (MRTA) increased during this time and derived significant financial support from alliances with the narcotraffickers. In 1985, the American Popular Revolutionary Alliance (APRA) won the presidential election, bringing Alan Garcia Perez to office. The transfer of the presidency from Belaunde to Garcia on July 28, 1985, was Peru's first exchange of power from one democratically elected leader to another in 40 years.

Economic mismanagement by the Garcia 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 mathematician-turned-politician, Alberto Fujimori, as president in 1990. Fujimori implemented drastic orthodox measures that caused inflation to drop from 7,650% in 1990 to 139% in 1991. Faced with opposition to his reform efforts, Fujimori dissolved Congress in the "auto-coup" of April 4, 1992. He then revised the constitution; called new congressional elections; and implemented substantial economic reform, including privatization of numerous state-owned companies, creation of a more investment-friendly climate, and much improved management of the economy. Fujimori's constitutionally questionable decision to seek a third term and subsequent tainted victory in June 2000 brought political and economic turmoil. A bribery scandal that broke just weeks after he took office 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. He currently resides in his parents' native Japan, amid controversy regarding his involvement in corruption scandals and human rights violations during his tenure as President. A caretaker government presided over new presidential and congressional elections, held in April 2001, which observers considered to be free and fair. The new elected government, led by President Alejandro Toledo, took office July 28, 2001. Regional and Municipal elections were held in November 2002, a majority of which were won by opposition or independent parties.

The Toledo government has restored a high degree of democracy to Peru following the authoritarianism and corruption of the Fujimori years. Suspects tried by military courts during the war against terrorism (1980-2000) are now set to receive new trials in civilian courts. Trials of those accused of corruption and collusion in the corrupt dealings of the Fujimori years are underway. On August 28, 2003, the Truth and Reconciliation Commission (CVR), which had been charged with studying the roots of the violence of the 1980-2000 period, presented its formal report to the President. The Government of Peru is now weighing its response to the CVR's recommendations that human rights violators be tried and that the government take measures to, in some fashion, indemnify parts of the population that suffered during those years, chiefly rural Peruvians of ethnically Indian descent. President Toledo has made a number of cabinet changes, partly in response to scandals but also to create a more effective government. His recently appointed Prime Minister, Beatriz Merino, is not from Toledo's party, nor are a majority of other ministers. Toledo's governing coalition has a plurality in Congress and must negotiate on an ad hoc basis with other parties to form majorities on legislative proposals. Toledo's popularity in the polls has suffered throughout the past year, due in part to scandals and in part to dissatisfaction amongst workers with their share of benefits from Peru's macroeconomic success. After strikes by teachers and agricultural producers led to nationwide road blockages in May 2003, Toledo declared a state of emergency that suspended some civil liberties and gave the military power to enforce order in 12 departments. The state of emergency has since been reduced to only the few areas where the Shining Path terrorist group was operating. Potential candidates and their parties are already beginning to maneuver with an eye on the 2006 elections.

GOVERNMENT

The president is popularly elected for a 5-year term, and the 1993 Constitution permits one consecutive re-election. 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, headed by a prime minister, all appointed by the president. All presidential decree laws or draft bills sent to Congress must be approved by the Council of Ministers.

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 government budget. The president has the power to block legislation with which the executive branch does not agree.

The judicial branch of government is headed by a 16-member Supreme Court seated in Lima. 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 to address human rights issues. 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.

Principal Government Officials
Last Updated: 2/17/04

President: Toledo, Alejandro

First Vice President:

Second Vice President: Waisman, David

Prime Minister: Ferrero Costa, Carlos

Min. of Agriculture: Leon Rivera, Jose

Min. of Commerce & Tourism: Ferrero, Alfredo

Min. of Defense: Chiabra, Roberto

Min. of Economy & Finance: Kuczynski, Pedro Pablo

Min. of Education: Sota, Javier

Min. of Energy & Mines: Quijandria, Jaime

Min. of Foreign Affairs: Rodriguez Cuadros, Manuel

Min. of Health: Masetti, Pilar

Min. of Housing: Bruce, Carlos

Min. of Interior: Rospigliosi, Fernando

Min. of Justice: Kresalja, Baldo

Min. of Labor: Neves, Javier

Min. of Production: Velasquez, Alfonso

Min. of Transportation: Ortiz, Jose

Min. of Women & Social Development: Romero, Ana Maria

President, Central Bank: Silva Ruete, Javier

Ambassador to the US: Ferrero, Eduardo

Permanent Representative to the UN, New York: De Rivero, Oswaldo

Peru maintains an embassy 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 New York; Paterson, NJ; Miami; Chicago; Houston; Los Angeles; San Francisco; Boston; Denver and San Juan, Puerto Rico.

POLITICAL CONDITIONS

The Government of Peru is in a state of democratization. Led by President Alejandro Toledo, the executive branch is becoming more transparent and accountable. Previously a rubberstamp body, the Congress is emerging as a strong counter-balance to the once dominant executive branch, with increased oversight and investigative powers. The executive branch and Congress in conjunction are attempting to reform the judicial branch, which is antiquated and rife with corruption. Peruvians, whose expectations were raised during the campaign, are frustrated at the slow pace of economic recovery and job creation. As discontent rises, the Toledo administration is in a race to strengthen the economy so that popular pressures do not force a shift to more populist measures. So far, the Toledo government remains committed to orthodox economic policies and structural reform, which, over time, should attract sufficient international investment to generate high growth and job creation. Establishment of an impartial, efficient judiciary probably will be the most difficult goal to achieve. Other important political currents stem from the ongoing investigation of Fujimori era corruption and continued subversive activities by terrorist group Sendero Luminoso. Regarding the latter, the Toledo government has been forced to consider putting resources back into the security forces which they had been hoping to use to fund social programs.

ECONOMY

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. The economy stagnated from 1998 through 2001, the result of an "El Niño" weather phenomenon, global financial turmoil, and other factors. Growth strengthened to 3.1% in 2000. The collapse of the Fujimori government and ensuing political instability deterred investment, however, and GDP grew only .2% in 2001. Upon taking office, President Alejandro Toledo, maintained largely orthodox economic policies, and took measures to attract investment. The government brought the deficit down to 2.5% of GDP in 2001, and 2.2% of GDP for 2002. Peru's economy recovered dynamically in 2002, which saw GDP growth of 5.2%. This growth has continued into 2003, with GDP likely to expand 4.0% for the year. GDP currently is $61 billion, in a country of 27.1 million. Banking, retail services, agriculture, mining and manufacturing are key sectors. Inflation is under 2%, with a stable currency and 9.1% unemployment. The fiscal deficit is in control, and likely to meet the IMF target of 1.9% of GDP. Foreign reserves grew over $1 billion in 2002, and are near $9.8 billion. External debt equals 48.5% of GDP.

Foreign Trade and Balance of Payments

The current account deficit dropped in 2002 to about 2.1% of GDP ($1.2 billion. Minerals and metals exports recorded large gains in 2001 and 2002, mostly as a result of the opening of the Antamina copper-zinc mine. By mid-2002, most sectors of the economy were showing gains. Peruvian exports reached $7.65 billion in 2002, with imports of $7.44 billion, producing the country's first trade surplus in 11 years. U.S. Andean Trade Promotion and Drug Eradication Act (ATPDEA) benefits may propel exports above $8.4 billion in 2003. Peru's major trading partners are the U.S., EU, Japan, Colombia, Brazil, China and Venezuela. Over 25% of Peruvian exports are destined for the U.S. and 30% of Peruvian imports come from the U.S. Exports include fish, copper, zinc, gold, petroleum, coffee, and textiles and apparel. Imports include machinery, vehicles, processed food, petroleum and steel. Peru belongs to APEC and the WTO, actively participates in FTAA negotiations and seeks a free trade agreement (FTA) with the U.S. Net international reserves at the end of October 2003 stood at $9.81 billion, up from $9.6 billion at the end of 2002.

Foreign Investment

The Peruvian Government actively seeks to attract both foreign and domestic investment in all sectors of the economy. International investment was spurred by the significant progress Peru made during the 1990s toward economic, social, and political stability, but it slowed again after the government delayed privatizations and as political uncertainty increased in 2000. President Alejandro Toledo has made investment promotion a priority of his government. While Peru was previously marked by terrorism, hyperinflation, and government intervention in the economy, the Government of Peru under former President Alberto Fujimori took the steps necessary to bring those problems under control. Democratic institutions, however, and especially the judiciary, remain weak.

The Government of Peru'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 in Peru, after negligible investment during the 1980s, mainly from the United Kingdom, Spain, the United States, Panama, and Chile. 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 ICSID (the World Bank's International Center for the Settlement of Investment Disputes) or other international or national arbitration tribunals.

Economic Outlook

Growth in 2003 has been driven by construction, investment, domestic demand, and AT PDEA-related exports. Peru's economy is one of the better-managed in Latin America, but challenges remain. Better tax collection and growth are hiking revenues, but government expenditures are keeping pace. Peru secured its $750 million external financing requirement for 2003 with international bond issuances early in the year and raised more than $400 million via a new domestic bond program. However, the government may need $1 billion in external finance in 2004. The government faces continuing strong social pressures to reduce poverty of 54% (under $58/month) and extreme poverty of 24% (under $32/month). Unemployment and underemployment levels total 56%, and growth is insufficient to generate strong new employment. The government lacks revenues for adequate social investment. Boosting long-term growth will require improving the investment climate, reducing corruption, and completing other reforms. Over the next few years, the country is likely to attract both domestic and foreign investment in the tourism, agriculture, mining, petroleum and natural gas, and power industries.

Narcotics

Peru remains the second-largest producer of coca leaf in the world despite an unprecedented 70% reduction in the number of acres of illegal coca leaf under cultivation since 1995. Over 30,000 hectares are currently cultivated in Peru according to the CNC. Ninety percent of all coca leaf grown in Peru is diverted into the illicit narcotics trade. As a result, Peru is a major exporter of high-purity cocaine and cocaine base to markets in South America, Mexico, the United States, and Europe,

The impact of this illicit industry to the national economy is difficult to measure, but estimates range from $300-$600 million. An estimated 200,000 Peruvians are engaged in the production, refining, or distribution of the narcotic. Many economists believe that large flows of dollars into the banking system contribute to the traditional depression in the dollar exchange rate vis-à-vis the sol, and create a climate in which money-laundering can flourish. The Central Bank engages in open market activities to prevent the price of the sol from rising to levels that would otherwise hurt Peruvian exports.

In response to changes in the dynamic of the cocaine trade in the 1990s caused by market forces and interdiction efforts, drug traffickers in Peru have diversified and are now using land, sea and river routes, and likely aircraft as well, to transport cocaine paste and, increasingly, cocaine hydrochloride (HCL) around and out of the country. As part of a possible renewal of the airbridge denial interdiction program, suspended in April 2001, the embassy is working with the Government of Peru to establish a joint counter-narcotics coordination center in Pucallpa, Peru. Aerial interdiction of drug traffickers may resume if it is determined through the work of this center that such traffic exists and once adequate training and safety measures have been instituted by the U.S. and Peruvian Governments. Peru continues to arrest drug traffickers and seize drugs and precursor chemicals, destroy coca labs, disable clandestine airstrips, and prosecute officials involved in narcotics corruption.

In both 2002 and 2003, the Peruvian Government has tended to avoid action that could spark civil unrest in the major coca growing areas. Notwithstanding that preoccupation, the government eradicated 7,200 hectares of coca in 2002 and over 8,000 hectares, so far, in 2003. Until early in 2003, all eradication was done by government workers from the Ministry of the Interior supported by NAS. After that date, the Peruvian Government has worked with the U.S. Agency for International Development (USAID) to offer development assistance in coca-growing areas to farmers who eradicate their coca fields voluntarily.

FOREIGN RELATIONS

In October 1998, Peru and Ecuador signed a peace accord which definitively resolved border differences which over the years had resulted in armed conflict. 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 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.) In December 1999, President Fujimori made the first visit ever to Chile by a Peruvian head of state.

Peru has been a member of the United Nations since 1949, and Peruvian Javier Perez de Cuellar served as UN Secretary General from 1981 to 1991. Former President Fujimori's tainted re-election to a third term in June 2000 strained Peru's relations with the United States and with many Latin American and European countries, but relations improved with the installation of an interim government in November 2000 and the inauguration of Alejandro Toledo in July 2001 after free and fair elections. Peru is planning full integration into the Andean Free Trade Area. In addition, Peru is a standing member of APEC and the WTO, and is an active participant in negotiations toward a Free Trade Area of the Americas (FTAA).

U.S.-PERUVIAN RELATIONS

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 $2.0 billion in 2001, accounting for about 30% of Peru's imports. In the same year, Peru exported $1.9 billion in goods to the United States, accounting for about 27% 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 country.

U.S. Assistance

U.S. bilateral assistance to Peru, including food aid and disaster relief and rehabilitation, totaled nearly $1.4 billion during the 1990-2001 period. The USAID program in Peru is its second largest in Latin America. Since 1962, USAID has provided approximately $2.7 billion to Peru in grants and loans, including $264 million in grants over the last two years. USAID's programs are designed to expand the sustainable opportunities for employment, higher incomes and improved quality of life for all Peruvians.

U.S. assistance to Peru is focused on six strategic objectives: Strengthening democratic processes and institutions; increasing economic opportunities for the poor in selected economic corridors; improving health for Peruvians at high risk; strengthening environmental management to address priority problems; supporting sustained reduction of illicit drug crops in target areas; and expanding opportunities for girls' basic education in targeted rural areas. Improving the quality of life of Peruvians along the Peru-Ecuador border area is an additional objective of U.S. Government development assistance.

Democracy. U.S. assistance seeks to strengthen democratic institutions; promote more effective regional and local governments; promote and protect human rights; foster citizen participation; promote the rule of law to protect rights of the people; fight corruption and adjudicate commercial disputes; and strengthen women's participation in decision making processes. USAID is supporting the efforts of the Government of Peru and Peruvian civil society—at the local, regional and national levels—to achieve a system of governance that is more participative, transparent, and effective. Through USAID, the United States provided more than $24 million in 2002, and is providing more than $10 million in 2003 to support these goals. US AID provided approximately 80% of donor funding to date for the Truth and Reconciliation Commission, allowing the Commission to collect more than 7,000 testimonies related to the political violence occurring over the last two decades.

Poverty Reduction and Economic Growth. USAID aims to improve the policy environment for private sector-led growth; expand access to markets; improve production; improve access to and distribution of food resources; and improve access to public utilities in poverty areas. U.S. food assistance programs reach about 1.8 million poor Peruvians annually in rural highlands and jungle areas, where the majority of the extreme poverty is found. From 1997-2002, USAID provided more than $200 million in food aid. Since 1995, USAID-assisted enterprises and producers have increased sales by approximately $150 million and created more than 38,000 full-time equivalent jobs. USAID microfinance initiatives have provided loans valuing more than $50 million to approximately 100,000 low-income clients. To improve the trade and investment climate, USAID programs are designed to improve fiscal management, government procurement, commercial law and property (including intellectual) rights, sanitary/phytosanitary systems, and customs in order to work better with the World Trade Organization. USAID is increasing productivity and market access of private enterprises through Economic Service Centers located throughout the country.

Health. U.S. assistance is improving child survival and maternal health services—such as immunization, diarrhea control, and prenatal care—and strengthening and expanding the participation of public and private sector entities in HIV/AIDS, tuberculosis and malaria prevention. USAID programs are designed to increase productivity of the work force as well as reduce the potential for social conflict. In family planning, activities with the non-governmental organization (NGOs) sector include efforts to strengthen the capacity of NGOs to supply voluntary family planning methods in urban and rural areas; increase the sustainability of the supply of contraceptives; and disseminate information on family planning methods and services. USAID's support to the Ministry of Health has made substantial improvements in this area. The infant mortality rate fell from 57 per 1,000 births in 1991 to 33 in 2000 while immunization campaigns for children younger than one year of age reached 97.5% coverage. The child mortality rate (children under 5 years old) declined from 91 to 47 per thousand live births.

Environment and Natural Resources Management. USAID's strategy focuses on improving the legal, policy, regulatory, and normative environment and natural resource framework; promoting pollution prevention in selected pre-urban and industrial settings; raising environmental awareness; and protecting natural resources, including sustainable forest management, biological diversity, and fragile ecosystems. USAID has provided important assistance to the Peruvian Government to improve the legal, regulatory, and policy framework that established clearer rules on environmentally sustainable natural resource use. Among the improved frameworks were the National Environmental Council's Structural Framework for Environmental Management, the Ministry of Industry's Environmental Regulation, the Framework Law for Sustainable Use of Natural Resources, and the Pollution Prevention Oriented Environmental Framework Legislation for the Fisheries and related industries.

Alternative development. USAID seeks to reduce coca leaf cultivation through alternative development and environmental protection programs, as well as to reduce drug use and addition through prevention, awareness, and rehabilitation programs. It also seeks to increase the commitment of farmers and communities to reduce illicit coca production voluntarily. USAID, together with Peruvian and U.S. law enforcement actions, has contributed to a 70% reduction of hectares (Ha) devoted to coca cultivation (from 115,300 Ha in 1995 to 31,150 Ha in 2003). From 2002 to 2003 alone there was a 15% reduction in coca cultivation. As a result, over the same period the capacity of Peru to produce cocaine hydrochloride, or HCl, declined from 525 tons to 145 tons. As of 2000, the total gross agricultural production value of the alternative crops in targeted areas outweighed the total gross production value of coca leaf by 39%. As a result of this and other social infrastructure projects (e.g., schools, health clinics, potable water systems, and farm-to-market roads and bridges), the living conditions of over 80,000 families in 1,600 communities were improved. In Peru's coca-growing areas, USAID's Alternative Development Program has provided assistance to about 18,000 families to grow licit crops on more than 32,000 hectares; given credit to 4,800 clients; completed 1,800 community infrastructure projects; and rehabilitated and maintained more than 1,400 kilometers of roads.

Education. This strategic objective is aimed at assisting the Government of Peru and civil society organizations to improve and decentralize primary education, especially for girls. As a result, USAID has contributed to the establishment of a National Network for Girls' Education in Peru, with the participation of government sectoral ministries, NGOs, universities, the business community, and donors. This national network has been very active in increasing consciousness about the importance of girls' education in Peru. In addition, Peru has been chosen as the South America site of the Centers of Excellence in Teacher Training (CETT) that grew out of the 2001 Summit of the Americas in Quebec. USAID is financing the CETT, whose purpose is to improve the practices of classroom teachers so that they become more effective reading instructors in the early primary grades.

Regional Programs. USAID is promoting the economic and social development of Peru-Ecuador border region, in order to provide tangible benefits from the October 1998 Peace Accords signed by the two countries. USAID's assistance to the Peru-Ecuador Bi-National Plan has contributed to improved social and economic conditions for 2,500 families in border areas in Piura and Condorcanqui.

Principal U.S. Embassy Officials

Lima (E), Avenida Encalada, Cuadra 17, Monterrico, Lima • P.O. Box 1995, Lima 1, or American Embassy APO AA 34031-5000, Tel [51] (1) 618-2000 or 434-3000; Direct Inward Dial:(51) (1) 618-ext#; IVG (8) (548) (Ext.#); after hours (Post 1) 618-2436; Main Fax 618-2397; ADM Fax 618-1302; RSO Fax 618-2278; FAS Fax 618-2170; APHIS Fax 618-2732; FCS Fax 618-2298; PAS Fax 618-2729; DAO Fax 618-2730; DEA Fax 618-2728; MAAG Fax 618-2723; CONS Fax 618-2722; AID 618-1200; AID Fax 618-1350; NAMRID 561-3043; NAMRID Fax 561-3042; NIMA 226-0400; NIMA Fax 224-1205; *AID address: Av. Arequipa 351 Lima 1, Tel 433-3200, Fax 433-7034. E-mail: last name and initials of recipient@state.gov

Cuzco (CA), Avenida Tullumayo 125, Tel. [51] (84) 24-5102; Fax 23-3541.

Last Modified: Wednesday, September 24, 2003

Other Contact Information

U.S. Department of State

Bureau of Western Hemisphere Affairs
Office of Andean Affairs (Room 5906)
2201 C Street N.W.

Washington, D.C. 20520-6263
Tel: 202-647-3360
Fax: 202-647-2628
Home Page: http://www.state.gov

U.S. Department of Commerce

International Trade Administration Office of Latin America and the Caribbean
14th and Constitution, NW
Washington, DC 20230
Tel: (202) 482-0475
(800) USA-TRADE
Fax: (202) 482-0464
Home Page: http://www.ita.doc.gov

American Chamber of Commerce of Peru
Avenida Ricardo Palma 836, Miraflores
Lima 18, Peru
Tel: (511) 241-0708
Fax: (511) 241-0709
E-Mail: amcham@amcham.org.pe
Home Page: www.amcham.org.pe

TRAVEL

Consular Information Sheet
June 24, 2003

Country Description: Peru is a developing country with an expanding tourism sector. A wide variety of tourist facilities and services are available, with quality varying according to price and location.

Entry and Exit Requirements: A valid U.S. passport is required to enter and depart Peru. Tourists must also provide evidence of return or onward travel. U.S. citizens do not need a visa for a tourist or businessrelated stay of 90 days or less. Nonresident U.S. citizens remaining in Peru more than 90 days (or the time period granted by the Peruvian immigration officer) must pay a monthly fee to extend their visa for up to three additional months, for a total of six months. U.S. citizens, including children, who remain in Peru over six months without obtaining a residence visa, will have to pay a fine in order to depart Peru. Visitors for other than tourist or short-term business visit purposes must obtain a Peruvian visa in advance. Business workers (under contract) should ascertain the tax and exit regulations that apply to the specific visa they are granted. U.S. citizens whose passports are lost or stolen in Peru must obtain a new passport and present it, together with a police report on the loss or theft, to the main immigration office in downtown Lima, located at Prolongacion Espana 734, Brena, to obtain permission to depart. Visitors with replacement U.S. passports issued in Lima may also re quest permission to depart at the immigration office set up for that purpose at Jorge Chavez International airport. An airport exit tax of $28 per person must be paid in U.S. currency when departing Peru. There is also a $5 airport fee for domestic flights. For further information regarding entry requirements, travelers should contact the Peruvian Embassy at 1625 Massachusetts Avenue, N.W., 6th Floor, Washington, D.C. 20036; telephone (202) 833-9868; Internet http://www.peruemb.org; or the Peruvian Consulate in Boston, Chicago, Denver, Hartford, Houston, Miami, New York, Paterson (NJ), or San Francisco.

Additional Requirements for Minors: In an effort to prevent international child abduction, many governments, including Peru's, enforce specific rules at entry/exit points. These often include requiring documentary evidence of relationship and permission for a child's travel from the parent(s) or legal guardian not present. Peru's specific procedures mandate that minors (under 18) who are citizens or residents of Peru and who are traveling alone, with one parent, or with a third party, must present a copy of their birth certificate and written notarized authorization from the absent parent(s) or legal guardian(s), specifically granting permission to travel alone, with one parent or guardian, or with a third party. When a parent is deceased, a notarized copy of the death certificate is required in lieu of the authorization. If documents are prepared in the United States, the authorization and the birth certificate must be translated into Spanish, notarized, and authenticated by the Peruvian Embassy or Consulate in the United States. If documents are prepared in Peru, only notarization by a Peruvian notary is required. These requirements do not apply to children who enter Peru on U.S. passports as tourists unless they hold dual U.S.-Peruvian citizenship. Children born in Peru of U.S. citizen parents are considered to be Peruvian citizens and must obtain Peruvian passports and the notarized authorization from the non-traveling parent or legal guardian in order to depart Peru. (Diplomats are exempt from this requirement.)

Safety and Security: Activities of the Sendero Luminoso (Shining Path) terrorist group have been generally restricted to certain parts of the interior of Peru. However, Shining Path is still capable of terrorist actions in urban areas, and it was re-designated by the Secretary of State in 2001 as a "Foreign Terrorist Organization" under 1996 anti-terrorism legislation. The Shining Path has targeted U.S. interests in the past, and there are indications that terrorist organizations such as the Shining Path are continuing to plan actions directed against U.S. citizens and U.S. interests in Peru. Sporadic, isolated incidents of Shining Path violence occurred from 2000-2003 (to date) in rural provinces of Ayacucho, Huancavelica, Huanuco, Junin, and San Mart in. In June 2003, a large, heavily-armed group believed to be members of Shining Path kidnapped more than 60 Peruvian and foreign pipeline workers in a remote area of the Department of Ayacucho. Although the hostages were released unharmed the next day, the kidnappers all escaped with a large cache of explosives. Acts of urban terrorism resulting in deaths and serious injuries have occurred recently, as evidenced by the March 20, 2002 bombing at the El Polo Shopping Center in Lima across the street from the U.S. Embassy that killed 10 people and injured approximately 40 others. However, the most common incidents were roadblocks and armed confrontations between Shining Path columns and Peruvian army or police patrols in remote areas. None of these incidents occurred in areas normally visited by tourists. Mining prospectors, adventure travelers and others considering travel to remote areas of Peru, in particular, are strongly advised to contact the U.S. Embassy in Lima for current security information.

A peace treaty ending the Peru/Ecuador border conflict was signed on October 26, 1998. The Peruvian Government is working to remove mines and unexploded ordnance left over from the conflict, but crossing or approaching the Peru-Ecuador border anywhere except at official checkpoints can still be dangerous. The entire Peru/Colombia border area is very dangerous because of narcotics trafficking and the occasional incursions of armed guerrilla forces from Colombia in remote areas.

Political demonstrations and labor-related strikes and marches regularly occur in urban and some rural areas and sometimes affect major highways. They can also cause serious disruptions to road, air and rail transportation. Demonstrations are usually announced in advance. While these activities are usually peaceful, they can escalate into violent confrontations. As a general rule, it is best to avoid large crowds and demonstrations. Visitors are encouraged to keep informed by following the local news and consulting hotel personnel and tour guides.

Information on travel and security in Peru may be obtained from the Department of State by calling 1-888-407-4747 within the United States; from overseas, call 1-317-472-2328. The U.S. Embassy in Lima can be contacted by phone at 51-1-434-3000 and the Consular Agency in Cusco's number is 51-84-9-62-1369. For further information concerning travel to Peru, travelers should consult the Department of State's website found on the Internet at http://travel.state.gov.

U.S. Embassy Travel: The U.S. Embassy restricts travel of U.S. Government employees in the following areas, where terrorist groups and narcotics traffickers have recently resorted to violent actions, usually directed against local security forces, local government authorities, and some civilians. Overland travel in or near these areas, particularly at night, is risky. This list is under continuous review, and travelers may contact the U.S. Embassy for updated information:

a

Ancash: Restricted: Provinces of Pallasca, Corongo, and Sihuas.

Apurimac: Province of Chincheros.

Ayacucho: Restricted: Provinces of La Mar and Huanta. Daylight road travel from Ayacucho to San Francisco. Permitted: Daylight road travel from Ayacucho City to the city of Huanta. Staying within the city limits of Huanta. Daylight road travel from Pisco to Ayacucho City.

Cusco: Restricted: 20 kilometer swath of territory contiguous to the Apurimac River and Ayacucho Department. Permitted: Everywhere else including Machu Picchu area and city of Cusco.

Huancavelica: Restricted: Provinces of Acobamba, Castrovirreyna, Churcampa, Huancavelica, Tayacaja. Permitted: Staying within the city limits of Huancavelica City. Train travel from Huancayo to Huancavelica City. Daylight road travel from Pisco to Ayacucho City.

Huanuco: Restricted: All areas. Road travel is no longer permitted in this department.

Permitted: Flying into and staying within the city limits of Huánuco and Tingo María.

Junin: Restricted: Provinces of Satipo and Concepcion east of the Mantaro River.

La Libertad: Restricted: Provinces of Pataz and Sanchez Carrión.

Lambayeque: Restricted: Lambayeque Province northeast of Olmos and east of the Pan-American Highway. Permitted: Daytime road travel on the Pan-American Highway.

Loreto: Restricted: 20 kilometer swath of territory contiguous to the Colombian border. Travel on the Putumayo River.

Pasco: Restricted: Province of Oxapampa. Permitted: Flying into and staying within the city limits of Ciudad Constitucion and Puerto Bermudez.

Piura: Restricted: Province of Huancabamba south of Huancabamba City. Permitted: Huancabamba City and areas to the north of the city.

San Martín: Restricted: Provinces of Bellavista, Huallaga, Mariscal Caceres, and Tocache. Permitted: Flying into and remaining within the city limits of Bellavista, Juanjui, Saposoa and Tocache. Daytime road travel from Tarapoto to Juanjui and Bellavista.

Ucayali: Restricted: Provinces of Padre Abad and Coronel Portillo west of Pucallpa City and west of the Ucayali River. Permitted: Flying into and remaining within the city limits of Pucallpa. The province of Coronel Portillo east of the Ucayali River.

Crime: While the great majority of the approximately 200,000 Americans who visit Peru each year have very positive experiences, a small but growing number have been victims of serious crimes. The information below is intended to raise awareness of the potential for crime and suggest measures visitors can take to avoid becoming a victim.

Violent crime, including carjacking, assault, and armed robbery, is common in Lima. Resistance to violent crime often provokes greater violence, while victims who do not resist usually do not suffer serious physical harm. "Express kidnappings," in which criminals kidnap victims and seek to obtain funds from their bank accounts via automatic teller machines, occur frequently. Thieves often smash car windows at traffic lights to grab jewelry, purses, backpacks, or other visible items from a car. This type of assault is common on main roads leading to Lima's Jorge Chavez International Airport, specifically along De la Marina and Faucett Avenues and Via de Evitamiento, but it can occur anywhere in congested traffic, particularly in downtown Lima. Travelers are encouraged to put all belongings, including purses, in the trunk of a car or taxi. Passengers who hail taxis on the street have been assaulted. Following the May 2003 armed robbery of a U.S. Embassy employee by a taxi driver, the Embassy's Regional Security Officer advised all embassy personnel not to hail taxis on the street. It is safer to use telephone-dispatched radio taxis or car services associated with major hotels. Travelers should guard against the theft of luggage and other belongings, particularly U.S. passports, at the Lima airport.

In downtown Lima and suburban areas frequented by tourists, the risk of street crime is high. American citizens traveling alone or in unescorted groups are more vulnerable to street crime. There is an increased level of criminal activity in Barranco, a popular Lima neighborhood. Visitors should avoid carrying unnecessary credit cards or ATM cards, and keep cash and ID in their front pockets.

Street crime is also prevalent in cities in Peru's interior, including Cusco, Arequipa, Puno and Juliaca, and pickpockets frequent the market areas in these cities. In Cusco, "chokehold" or "strangle" muggings are common, particularly on streets leading off the main square, in the area around the train station, and in the San Blas neighborhood. In 2002 and 2003, there have been a number of cases of armed robberies, rapes, other sexual assaults and attempted rapes of U.S. citizens and other foreign tourists in Cusco city and the outlying areas in the vicinity of various Incan ruins. These assaults have occurred during both daylight hours and at night. Some crimes in the city of Cusco have involved the drivers of rogue (or unregistered) cabs. Travelers should use only licensed, registered taxis such as those available from taxi stands in Cusco displaying a blue decal issued by the municipal government on the windshield of the vehicle. Visitors should not accept offers of transportation or guide services from individuals seeking clients on the streets. A U.S. citizen tourist died in Cusco under unexplained circumstances in November 2000, after taking a street-hailed taxi at night. Tourists should be particularly cautious when visiting the Sacsahuay-man ruins and the surrounding areas. They should not travel alone, but do so in as large a group as possible. Visitors should also avoid these areas at dawn, dusk or night, since roving gangs are known to frequent these areas and prey on unsuspecting tourists. U.S. citizen backpackers have also been victims of armed robbery while hiking on trails other than the Inca Trail. A pattern emerging among U.S. citizen and other foreign visitors who are victims of crime in Cusco and its environs reveals that thieves appear to be targeting young tourists who stay in inexpensive accommodations, carry backpacks, and travel alone or in pairs in isolated areas, rather than in large groups.

Peruvian law enforcement authorities have responded to rising crime by increasing the number of tourist police officers patrolling Cusco and its outskirts on horseback and motorcycles. The officers have been dispatched to bus and train terminals, taxi stands, automatic teller machine locations, and other sites frequented by tourists, such as discoteques, restaurants, and craft fairs and shops.

Pick pocketing and thefts of luggage and passports from locked hotel rooms, rental cars and restaurants have been reported by U.S. citizen travelers to Arequipa, another popular tourist destination. In April 2003, two young foreign tourists, one a minor, were raped in the jungle in Ucayali province, and a U.S. citizen teenage visitor was raped there in 2001. Two U.S. Embassy employees were robbed at gunpoint in 2002 while on a walking trail between Huaraz and Monterrey, a popular area for trekking and mountain climbing. Two other armed robberies of tourists have subsequently occurred in that vicinity. In 2002, a young American citizen trekker was shot and killed during a robbery while he and a Peruvian companion who strayed from the trekking trail were camped in a remote area outside of Huaraz.

U.S. citizen visitors to Peru should immediately report any criminal activity perpetrated against them to the nearest police station or tourist police ("POLTUR") office. Immediate action may result in the capture of the thieves and the recovery of stolen property. U.S. citizens should also report crimes to the U.S. Embassy in Lima (telephones 434-3000 during business hours, 8:00 a.m. to 5:00 p.m. or 434-3032 for after-hours emergencies if calling from within Lima; add the prefix 01 if calling from the provinces). Victims of crime in Cusco should contact the Consular Agent there (while in Cusco, telephones 84-9-62-1369, 84-22-4112, 23-1474, or 23-3541; from Lima, callers must dial the prefix 084 for Cusco). The telephone number for POLTUR in Lima is 225-8698 or 225-8699; the fax number is 476-7708. There are also tourist police offices in 15 other cities, including all major tourist destinations, such as Cusco, Arequipa, and Puno. Tourists may register complaints on a 24-hour hotline provided by INDECOPI (National Institute for the Defense of Competition and the Protection of Intellectual Property) by calling 224-7888 or 224-8600 while in Lima. Outside of Lima, callers should dial the prefix (01), then the aforementioned numbers, or call the toll-free number 0-800-42579 from any private telephone (the 800 number is not available from public pay-phones). The INDECOPI hotline will assist the caller in contacting the police to report a crime, but it is intended primarily to deal with nonemergency situations such as poor service from a travel agency or guide, lost property, or unfair charges.

The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the U.S. Embassy in Lima. U.S. citizens may refer to the Department of State's pamphlet, "A Safe Trip Abroad," for ways to promote a trouble-free journey. The pamphlet is available by mail from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, via the Internet at http://www.gpoaccess.gov/index.html, or via the Bureau of Consular Affairs home page at http://travel.state.gov.

Medical Facilities: Medical care is generally good in Lima and usually adequate in other major cities, but it is less so elsewhere in Peru. Urban private health care facilities are often better-staffed and equipped than public or rural ones. Public hospital facilities in Cusco, the prime tourist destination, are generally inadequate to handle serious medical conditions. Although some private hospital facilities in Cusco may be able to acceptably treat acute medical problems, in general the seriously ill traveler should return to Lima for further care as soon as is medically feasible.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and if it will cover emergency expenses such as a medical evacuation. U.S. medical insurance plans seldom cover health costs incurred outside the United States unless supplemental coverage is purchased. Further, U.S. Medicare and Medicaid programs do not provide payment for medical services outside the United States. Many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including emergency services such as medical evacuations, but doctors and hospitals in Peru often do not accept U.S. medical insurance, even if the policy applies overseas.

Many foreign doctors and hospitals require payment in cash prior to providing service, and medical evacuation to the United States may cost well in excess of $50,000. Uninsured travelers who require medical care overseas often face extreme difficulties. When consulting with your insurer prior to your trip, please ascertain whether payment will be made to the overseas healthcare provider or if you will be reimbursed later for expenses that you incur. Some insurance policies also include coverage for psychiatric treatment and for disposition of remains in the event of death.

Useful information on medical emergencies abroad, including overseas insurance programs, is provided in the Department of State's Bureau of Consular Affairs brochure, "Medical Information for Americans Traveling Abroad," available via the Bureau of Consular Affairs home page or autofax: (202) 647-3000.

Specific Health Risks: Visitors to high-altitude Andean destinations such as Cusco (11,000 feet), Machu Picchu (8,000 feet), or Lake Titicaca (13,000 feet) should discuss the trip with their personal physician prior to departing the United States. Travel to high altitudes could pose a serious risk of illness, hospitalization, and even death, particularly if the traveler has a medical condition that affects blood circulation or breathing. Several U.S. citizens have died in Peru from medical conditions exacerbated by the high altitude. Tourists or business visitors, especially but not restricted to those who suffer from cardiac-related problems or high blood pressure, and who wish to travel to high-altitude areas in Peru should undergo a medical examination before traveling. All people, even healthy and fit persons, will feel symptoms of hypoxia (lack of oxygen) upon arrival at high-altitude. Most people will have increased respiration and increased heart rate. Many people will have headaches, difficulty sleeping, lack of appetite, minor gastric and intestinal upsets, and mood changes. Most people may need time to adjust to the altitude. To help prevent these complications, consider taking acetazolamide (Diamox) after consulting your personal physician, avoid alcohol and smoking for at least one week after arrival at high altitudes, and limit physical activity for the first 36 to 48 hours after arrival at high altitudes.

In jungle areas east of the Andes mountain range (cordillera), chloroquine-resistant malaria is a serious problem. Cholera, yellow fever, hepatitis, dengue fever and other exotic and contagious diseases are also present. Yellow fever is endemic in certain areas of Peru; in general, those areas are located on the eastern side of the cordillera and at lower elevations in jungle areas. The U.S. Center for Disease Control recommends that travelers to Peru receive a yellow fever vaccination and carry documentation of the vaccination with them on their trip. Diarrhea caused by contaminated food or water may affect travelers, and it is potentially serious. If it persists, please seek medical attention. Local tap water in Peru is not considered potable. Only bottled water or treated (disinfected) water should be used for drinking. Fruits and vegetables should be washed with care, and meats and fish should be thoroughly cooked. Eggs, meat, unpasteurized cheese, and seafood are common sources of the bacteria that can cause travelers' diarrhea, and they should be properly prepared or avoided.

Over the last two and one-half years, four U.S. citizen visitors have died during cosmetic surgery operations in Lima and another major city. The most recent death of this nature occurred in March 2003. All four patients were undergoing liposuction procedures.

Other Health Information: Information on vaccinations and other health precautions may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877-FYI-TRIP (1-877-394-8747); fax 1-888-CDC-FAXX (1-888-232-3299), or via the CDC's Internet site at http://www.cdc.gov.

Adventure Travel Safety: Inca Trail hikers are significantly safer if they are part of a guided group trail hike. To protect natural resources along the Inca Trail, the Peruvian Government raised the fees for hiking the trail in 2001 and instituted limits on the numbers of hikers permitted on the trail. Hikers in peak season (June-August) are advised to make reservations for the Inca Trail in advance via a travel agency. Visitors should always register when entering national parks. Hikers should exercise extreme caution in steep or slippery areas, which are neither fenced nor marked. Several climbers have died or suffered serious injuries after falling while climbing Huayna Picchu, a peak near Machu Picchu. Only very basic medical assistance is available at Machu Picchu.

Adventure travelers should be aware that rescue capabilities are limited. In recent years, several hikers have died, and others have had to be rescued after serious accidents in the Huaraz region of the Cordillera Blanca Mountains, where Peru's highest peaks are located. Three experienced U.S. citizen mountain climbers perished in an avalanche on Huascaran Mountain in 2002. Most rescues are carried out on foot because helicopters cannot fly to the high-altitude areas where hikers are stranded. U.S. citizens who plan to visit these mountainous areas in Ancash province should contact the Peruvian National Police's High Mountain Rescue Unit ("USAM") at telephone 51-44-793327, 793291, or 793333, faxphone 51-44-793292, or E-mail: usam@pnp.gob.pe. Some USAM officers read and/or speak English.

Swimmers, rafters and boaters should be aware of strong currents in the Pacific Ocean and fast-moving rivers. An American citizen was killed while white-water rafting in 2002. Travelers are advised to seek advice from local residents before swimming in jungle lakes or rivers, where large reptiles or other dangerous creatures may live; caymans, resembling alligators, are found in jungle areas of Peru. One crocodile species is native to the Tumbes area, but it is limited in numbers and range. All adventure travelers should leave detailed written plans and a timetable with a friend and with local authorities in the region, and they should carry waterproof identification and emergency contact information.

Travelers to all remote areas should check with local authorities about geographic, climatic and security conditions.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning Peru is provided for general reference only, and it may not be totally accurate in a particular location or circumstance.

Safety of Public Transportation: Poor
Urban Road Conditions/Maintenance: Poor
Rural Road Conditions/Maintenance: Poor
Availability of Roadside Assistance: Poor

Road travel at night is extremely dangerous due to poor road markings and frequent unmarked road hazards. Drivers should not travel alone on rural roads, even in daylight. Convoy travel is preferable. Spare tires, parts and fuel are needed when traveling in remote areas, where distances between service areas are great. Fog is common on coastal and mountain highways, and the resulting poor visibility frequently causes accidents. Inter-city bus travel is dangerous. In 2001, several inter-city buses were held up at night by armed robbers, who forced passengers off buses and stole all their belongings. Bus accidents resulting in multiple deaths and injuries are common, and they are frequently attributed to excessive speed, poor bus maintenance, and driver fatigue. Several foreigners, including three U.S. citizens, were killed or seriously injured in bus accidents in 1999-2002. For further information, travelers may contact their nearest automobile club, or (for information in Spanish) the Associacion Automotriz del Peru, 299 Avenida Dos de Mayo, San Isidro, Lima 27, Peru, telephone 51-1-440-0495.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Peru's Civil Aviation Authority as Category 1 — in compliance with international aviation safety standards for oversight of Peru's air carrier operations. For further information, travelers may visit the FAA's Internet website at http://www.faa.gov/avr/iasa.

The U.S. Department of Defense (DOD) separately assesses some foreign air carriers for suitability as official providers of air services. For information regarding the DOD policy on specific carriers, travelers may contact the DOD at telephone (618) 229-4801.

Customs Regulations: The government of Peru prohibits the exportation of archaeological artifacts and colonial art. These restrictions include archaeological material from the pre-Hispanic cultures and certain ethnological materials from the colonial period of Peru, which are considered protected Peruvian cultural patrimony. U.S. law enforcement authorities can take action even after importation into the U.S. has occurred. For more information, contact Art Historian Dr. Jaime Mariazza, National Cultural Institute (Instituto Nacional de Cultura—INC), Director of Direccion de Registro Nacional de Patrimonio Cultural Mueble, or his assistant Rocio Sierra, at 476-9900, and/or Archaeologist Ms. Elia Centurion, Direccion de Registro de Patrimonio Arqueologico, at 225-4380. Travelers buying art should be aware that unscrupulous traders may try to sell them articles that cannot be exported from Peru. Such articles may be seized by Peruvian customs authorities, and the traveler may be subject to criminal penalties. The U.S. Customs Service may impose corresponding import restrictions in accordance with the Convention on Cultural Property Implementation Act. (For further information, please contact the Customs Service at telephone 202 927-2336 or consult the Internet site at http://exchanges.state.gov/education/culprop.) Travelers who purchase reproductions of colonial or pre-colonial art should buy only from reputable dealers, and they should insist on documentation from Peru's National Institute of Culture (INC) showing that the object is a reproduction and may be exported. Peruvian customs authorities may retain articles lacking such documentation and forward them to INC for evaluation. If found to be reproductions, the objects eventually may be returned to the purchaser, but storage and shipping charges are the responsibility of the purchaser.

Vendors in jungle cities and airports sell live animals and birds, as well as handicrafts made from insects, feathers, or other natural products. Under Peruvian law, protecting the country's biodiversity, it is illegal to remove certain flora and fauna items from their place of origin to another part of Peru or to export them to a foreign country. Travelers have been detained and arrested by the Ecology Police in Lima for carrying such items.

Information on U.S. regulations for the importation of plant and animal products is available from the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture via the Internet at http://www.aphis.usda.gov. Travelers bringing animals to the United States may also wish to consult with U.S. Customs or the Fish and Wildlife Service of the U.S. Department of Interior.

Additional information about the protection of Peru's cultural heritage and its flora and fauna is available from the Embassy of Peru.

Peruvian customs regulations require that many electronic items or items for commercial use be declared upon entering the country. Failure to make a full and accurate declaration can lead to arrest and incarceration.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Peruvian laws, even unknowingly, may be expelled, arrested or imprisoned.

Penalties for possession, use, or trafficking in illegal drugs in Peru are strict, and convicted offenders can expect jail sentences and heavy fines. Peruvian police are efficient at detecting drug smugglers at Lima's international airport and at land border crossings. Since 1995, scores of U.S. citizens have been convicted of narcotics trafficking in Peru. Many of these U.S. citizens were recruited in the United States by drug traffickers who offered free trips to Peru and the chance to earn quick cash. Anyone arrested on drug charges, regardless of nationality, will face protracted pre-trial detention in poor prison conditions. Further information on prison conditions and the judicial system is available in the Department of State's Human Rights Report on Peru, available via the Internet at http://www.state.gov.

Travelers should be aware that some drugs and other products readily available over-the-counter or by prescription in Peru are illegal in the United States. The prescription sedative flumitrapezan, trade name rohypnol, is one such drug; others may come on the market at any time. Although coca-leaf tea is a popular beverage and folk remedy for altitude sickness in Peru, possession of these tea bags, which are sold in most Peruvian supermarkets, is illegal in the United States.

Other Legal Issues: Civil marriage in Peru of U.S. citizen non-residents to Peruvians is difficult, and documentary requirements vary by location. The Peruvian fiance(e) should check with the municipality where the marriage will take place to determine what documents are required. The U.S. Embassy does not authenticate U.S. civil documents for local use. All U.S. documents must be translated and authenticated by a Peruvian Consular officer in the United States.

Disaster Preparedness: Peru is an earthquake-prone country. General information about natural disaster preparedness is available via the Internet from the U.S. Federal Emergency Management Agency (FEMA) at http://www.fema.gov/.

Children's Issues: In Peru, international adoptions are strictly regulated. An adoptive child must be abandoned by the birth parents and placed with a government-approved agency before he or she can be adopted internationally, unless the adoptive parent has Peruvian nationality or is a Peruvian resident. Current information on Peruvian adoption procedures and the immigrant visa application process for orphans is available from the Consular Section of the U.S. Embassy. Information on pre-adoption requirements and the I-600 orphan petition process is available from the U.S. Department of Homeland Security (formerly the Immigration and Naturalization Service, or USINS) office at the U.S. Embassy, telephone 51-1-434-3000, extensions 3011 and 3012 from 8 a.m. to 12:00 p.m. Monday through Friday.

For information on international adoption of children and international parental child abduction, please refer to our Internet site at http://travel.state.gov/children's_issues.html or telephone the Overseas Citizens Services call center at 1-888-407-4747. The OCS call center can answer general inquiries regarding international adoptions and will forward calls to the appropriate country officer in the Bureau of Consular Affairs. This number is available from 8:00 a.m. to 8:00 p.m. Eastern Standard Time, Monday through Friday (except U.S. federal holidays). Callers who are unable to use toll-free numbers, such as those calling from overseas, may obtain information and assistance during these hours by calling 1-317-472-2328.

Registration/Embassy Location: U.S. citizens living in or visiting Peru are encouraged to register at the Consular Section of the U.S. Embassy in Lima and obtain updated information on travel and security in Peru. The Consular Section is open for American Citizen Services, including registration, from 8:00 a.m. to 12:00 noon weekdays, excluding U.S. and Peruvian holidays. The U.S. Embassy is located in Monterrico, a suburb of Lima, at Avenida Encalada, Block Seventeen; telephone 51-1-434-3000 during business hours (8:00 a.m. to 5:00 p.m.), or 51-1-618-2436 for after-hours emergencies; fax 51-1-434-3065, or 434-3037, or 434-4182 (American Citizen Services Unit); Internet website - http://peru.usembassy.gov. This website provides information, but it does not yet have interactive capability to respond to specific inquiries. The U.S. Consular Agency in Cusco is located in the Binational Center (Instituto Cultural Peruana Norte Americano, ICPNA) at Avenida Tullumayo 125; telephone 51-84-24-5102; fax 51-84-23-35-41; cellular phone 51-84-9-62-1369; Internet address consagentcuzco@terra.com.pe. The Consular Agency can provide information and assistance to U.S. citizen travelers who are victims of crime or need other assistance, but it cannot replace lost or stolen U.S. passports, which are processed at the U.S. Embassy in Lima.