Monday, May 05, 2008

Free Market Reforms in Peru = Economic Growth

Peru has been experiencing fast growth – better than 6% annually – for almost seven years (see chart above of real GDP growth).
High growth rates – averaging 11% a year from 1990-2002 – have occurred in sectors that make china, porcelain, knitted fabrics, plastic products and basic chemicals, to mention a few.
The story of the "cluster" of small metallurgical companies that has emerged in Lima is especially compelling. In recent years, these entrepreneurs have been competitive in bidding for work that was previously dominated by important international firms. They have also become exporting powerhouses.

The agricultural sector on the coast has also revived, in part because private-property rights there (though not in the interior) have replaced the collectivized system of the 1970s. As a result, investment has poured in. Modern farming has put the coast on the map as a global supplier of asparagus, grapes, sweet yellow onions, mangos and organic bananas. All of this has been supported by the deregulation and privatization of key sectors like telecom and banking. And the biggest beneficiaries of openness have been consumers.

From today's
Wall Street Journal


At 6/17/2008 3:53 PM, Blogger Alfredo Yong said...

Only problem in Peru, is 44% of population under line of poverty.


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