Business
Business Profile
Lima is a microcosm of the country at large, reflecting the vast divide between Peru’s different classes and the ways they make a living. The ‘economic powerhouse’ created by Alberto Fujimori’s government, in the early 1990s, has since slowed to a crawl and has only highlighted the widening gap between rich and poor. Some 54% of the 25-million population on average live on PEN7/US$2 or less per day.
Most business in Lima is in the informal sector, which includes jobs such as shoe polishing, selling fruit or mending old radios, to mention a few. A fire in an unlicensed firework shop that ripped through a central commercial district, in December 2001, killing over 300 people, was a horrifying reminder of the lack of safety measures in many of these informal businesses. In the formal sector, ex-president Alberto Fujimori passed several economic measures in the early 1990s, in order to liberate the market, open it to foreign firms and revamp the PEN190/US$53-billion economy. A series of multimillion-Dollar privatisations, topped by the PEN7/US$2-billion sale of the telephone network to Spain’s Telefonica, created a boom in the financial markets. The new prosperity prompted massive investment in new buildings, particularly in San Isidro and Miraflores, the main business and commercial centres respectively. It also sparked a rush of foreign interest, led by US giants such as Citibank and McDonalds, hoping to cash in on the boom. Direct foreign investment was nearly PEN36/US$10 billion in 2001.
Profiting from its coastal location, Lima has been the centre for Peru’s most lucrative industries. Exporters of guano (bird droppings transformed into fertiliser) brought much wealth to the city, as did the sugar and cotton that was grown in wealthy estates along the coast. Oil production also contributed to the city’s wellbeing. While these industries have dwindled, fishing continues to play a key role, particularly the production of fishmeal, which remains one of the country’s top export earners. Exports totalled PEN25/US$7 billion in 2001. In terms of gross domestic product, fishing and mining were the biggest growth areas in 2001, followed by agriculture and electricity production. Tourism has recently become a highly important motor of the economy. In particular, the government of Alejandro Toledo is trying to promote the Amazon jungle as a centre for eco-tourism, in order to broaden Peru’s appeal beyond Machu Picchu and Lake Titicaca.
Quality of life in Lima ranges from dire to extremely good. The average per capita annual wage for an ordinary worker is approximately PEN5400/US$1500 but often much less, while a successful banker could expect to make approximately PEN108,400/US$30,000. Unemployment in the capital stands at around 10%, above the national average of 8%.
The Lima Chamber of Commerce (website: www.camaralima.org.pe) is a useful point of contact for foreign business visitors.
Business Etiquette
A distinctly old-fashioned sense of politesse lingers in the way the Limeos do business. Nothing is rushed and the greeting ritual can seem almost as important as the actual meeting process. Men shake hands, while women or men meeting other women often greet each other with a kiss. Business cards are usually exchanged before a meeting begins. Breakfast meetings and brunch are common but lunch remains an important way to entertain contacts. Latin Americans are careful about their clothes and overall appearance and appreciate it when visitors are equally well turned-out. Despite a reputation for Latin time keeping, Limeos expect visitors to make appointments and to stick to them.
A business trip that spans several days is likely to include an invitation for drinks or dinner at the house of a colleague. Visitors should arrive with a small gift – a bottle of wine or flowers. As a mark of respect, Peruvians associates should be addressed as Usted (the polite form of tu) unless they indicate otherwise. Many Peruvian businesspeople speak English but a foreigner should make the effort to try and speak Spanish. Normal business hours are 0900-1700.
|
Business