HH the Emir Sheikh Hamad bin Khalifa al-Thani made a fruitful official visit to Peru this week, the first one to this South American country made by a head of state from the Gulf region.
Peru hosted the III Summit of Heads of State and Government of South American and Arab Countries (ASPA) and a Business Forum with the attendance of around 500 businessmen in October last year. Peru opened embassies in Qatar, Kuwait and Saudi Arabia and a Trade & Investment Office in Dubai, in the last two years.
“The visit of the Emir takes place in response to the Peruvian efforts to come closer to the countries of the Arab World,” Foreign Affairs Minister Rafael Roncagliolo, commented before the tour this week.
The visit of HH the Emir is recognition of the economic growth and business opportunities that Peru offers as one of the most successful emerging countries nowadays. Three main characteristics have attracted the Qatari attention to Peru.
First, macroeconomic stability. Peruvian economy grew almost 7% in 2012. During the last 10 years, Peru has been leading Latin America’s economic growth. International sources reveal that Peru will continue to lead regional GDP growth with an average annual rate of 6%.
Another excellent result of the Peruvian economy performance is the lowest annual average inflation rate in Latin America, which has kept a stable exchange rate and a country risk below regional average. Peru has got “investment grade” by Standard & Poors, Fitch Ratings and Moody’s for its long term sovereign debt in foreign currency.
Second, a friendly investment environment. Peru actively seeks to attract both foreign and domestic investments in all economic sectors. A non-discriminatory treatment for national and international investment has been established.
There is free competition, there are no restrictions to earnings repatriation, international transfers of capital or currency exchange practices and has established the necessary economic stability rules to protect private investors from arbitrary changes regarding legal terms and conditions of their ventures in order to reduce government interference with economic activities.
Peru has the second best position for doing business in Latin America according with the Word Bank.
Third, an open trade and market access policy. Peru has an active commercial integration policy with the world. Through different integration schemes, such as the Free Trade Agreements, Peru has assured access to important markets as the United States, the European Union, Canada, China, Singapore, Japan, Korea, Thailand and the European Free Trade Association (EFTA), covering more than 95% of its international trade.
How has Qatar strengthened its relations with Peru? In 2012 Qatar opened an embassy in Lima with ambassador Jamal bin Nasser al-Bader and since then he has worked preparing for recent significant Qatari visits.
The first one was in Lima, on January 14 and 15. A Qatari Advanced Mission, consisting of officials from the Ministry of Economy and Finance and the Ministry of Business and Trade, arrived, keen to start negotiations on trade and investments with their Peruvian counterparts.
The mission included executives of Qatari companies like Qatar Holding, Qatar Mining, Qatar Petroleum International, Hassad Food and a representative of the Qatar Chamber of Commerce and Industry. They were informed about the Peruvian market and especially about investment projects and business opportunities.
After this visit, a Peruvian delegation came to Doha last week to move forward with the negotiations of agreements and business.
Both missions, the Qatari and Peruvian, were highly successful because of the results obtained.
HH the Emir and Peruvian President Ollanta Humala, this week headed a ceremony in which agreements were signed on bilateral relations; for co-operation in the legal area; on co-ordination in education and scientific research; on mining investment; news exchange; and on investment and business matters. They are still in negotiations in a couple of other accords, one on economic co-operation and another one about visas. Next month it will start negotiations to settle an “avoidance of double taxation agreement”.
The visit of HH the Emir and the signing of all of these agreements are a clear demonstration of the political willingness to strengthen ties between both countries. These agreements are the foundations of the appropriate benchmark to facilitate investments and business opportunities, and also to co-operate in fields like education, culture, scientific research and tourism.
♦The article was prepared by the Ministry of Foreign Affairs of Peru and the embassy of Peru in Doha