Hope for poverty reduction in Peru

Peru’s Prime Minister Jorge del Castillo yesterday announced that half a million Peruvians have “escaped from the shadow of poverty” thanks to the country’s sustained economic development.

He stated that the country’s overall level of poverty has dropped from 48% to 44% of the population, while recognizing that some regions are harder hit – for instance, 88% of people in Huancavelica region live below the poverty line.

To help address this problem, which is shared by neighboring Andean regions such as Ayacucho, he announced a new law that relaunches Agrobank, a state-run entity that offers credit to small-scale farmers to help them develop their income.

Peru defines poverty as the economic inability to maintain an adequate food intake.

Machu Picchu train company fined under monopoly law

The Trans-Andean Railway Company, responsible for rail transport to Machu Picchu, has been fined over $185,000 for operating an illegal monopoly. The company has also been ordered to cease its practice of refusing to sublet trains and other equipment that it rents from the state.

According to its contract, it is obliged to rent these units to other companies that wish to operate rail service along the route. The only rental contracts that it has accepted in the past were to its own subsidiary Peru Rail, while it rejected applications by any company that was not linked to it.

This landmark ruling, the first of its kind in Peru, is hoped to bring in new completion for transport along the route, and reduce prices for tourists travelling between Cusco and Machu Picchu.

Cusco airport modernizations to “triple connectivity”

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Modernization work to Cusco airport will triple its connectivity and allow enhanced connections with international flights into Lima, according to Chamber of Tourism chairman Daniel Ratti.

He said that the installation of new runway lights and a satellite-linked landing system will allow aircraft to land during conditions of poor visibility and at night time.

The improvements, scheduled to be completed by the end of the year, will make the airport able to accept flights 24 hours a day, greatly adding to its connectivity.

“Starting in 2008, tourist arriving in Lima at 6pm on flights from Europe will be able to connect directly to an 8pm departure for Cusco, rather than having to wait until the next day,” said Ratti.

He added that efforts are underway to procure the same system for Lima’s international airport, which is currently often closed due to low-lying fog.

Juan Diego Flores receives Peru’s highest honor

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Today Peru’s President Alan Garcia awarded the order of the Sun of Peru at the level of the Grand Cross, the nation’s highest honor, to Peruvian tenor Juan Diego Flores.

The ceremony took place in the Gilded Room of the Palace of Government, where the president recognized Flores for his outstanding contributions to Peru’s worldwide image. The tenor is thought of as among the world’s greatest classical singers, vaunted by many as the successor to Luciano Pavarotti.

The order of the Grand Cross of the Sun of Peru is the nation’s highest honor.

Peru’s economic risk hits new low

Peru’s economic risk rating dropped on Friday from 1.00% to 0.97%, as calculated on the JPMorgan EMBI+ rating. This is the first time in the nation’s history that its rating has dropped below 1%.

The Emerging Markets Bond Index Plus is a rating of the difference in value between a Peruvian government issued bond and an equivalent bond issued by the US treasury, so is an accepted measure of the probability that a country fail to meet its obligations. A low rating means that the country is seen as “safe” by international investors.

This drop in risk is likely to encourage a large number of international financiers who only consider investing in countries with a rating of under 1%.

Peru’s international credit score is given as BB+ by two of the three main agencies, Fitch Ratings, Standard & Poor’s and Moody’s – just one step away from the top level ratings in the A category.

Many analysts consider it likely that Peru will reach the “investment level” soon, which is expected to result in a flood of foreign investment. A risk rating of under 1% and a credit score of A are the key components necessary for this to happen.

Peru Reserve Bank chief: stock exchange volatility down to inexperienced investors

Julio Velarde, the President of Peru’s Central Reserve Bank (BCRP) yesterday blamed recent instabilities of the Lima Stock Exchange (BVL) on the influx of a large number of inexperienced investors, drawn in by the indices’ high yield this year, who then panicked when prices started to drop. He estimated their total investment at around US$500 million.

“People without much experience on the exchange were jumping in, buying up the stocks that had already experienced a lot of growth this year. They bought when the stocks were highly valued, and when the indices started to drop they started to panic and moved to sell out,” said the finance director.

He attributed part of the recent sudden drop of the exchanges indices to this mass selling by small investors, who had been attracted by the exchange’s growth; but described the recent drop as a readjustment that is already over, and not indicative of a slowing in overall growth. He pointed out that the BVL has grown by 168% in the past twelve months, with 42% increase so far in 2007 alone.

June Festival Calendar

FEATURE

Qoyllur Rit’I – June 1st
Quispicanchi, Cuzco

The biggest indigenous pilgrimage in the Americas, Qoyllur Rit’I sees upwards of 10,000 people walking to the foot of the Ausangate Mountain (6,362m, or 20,870 feet) to pay homage to a painting of the infant Christ. The ceremony commemorates an Inca festival.

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Chachapoyas Tourist Week – June 1st to 7th
Chachapoyas

An array of cultural activities are programmed for the week, featuring festivals, traditional foods, and the local Raymillacta folk dance.

Corpus Christi – June 7th
Cuzco

Effigies of saints are paraded through the city’s streets to the cathedral, where they are brought to the consecrated host in an 18kg gold “macizo”. The traditional food for the festival is chiriuchu.

Sondor Raymi – June 16th
Andahuaylas, Apurimac, near Cuzco

A pre-Hispanic ritual that commemorates the history of the local Chanka people. It takes place at the Pacucha lake, and continues at the site of Sondor, where the Quechua ceremony reaches its peak.

Catacaos Jubilar Week – from June 21st
Catacaos, near the city of Piura in the north of Peru

The annual festival of Catacaos, the Piura town famous for its traditional foodstuffs and handicrafts. Catacaos is the center of modern production for traditional colonial silver filigree work.

Saint John the Baptist – June 24th
All over the eastern jungles of Peru; Canchaque, Piura; and other locations

A carnival atmosphere accompanies this festival all over the country, particularly in the jungle provinces and cities such as Puerto Maldonado, Iquitos and Pucallpa. The small town of Canchaque, 5 hours from Piura, also holds a charming local festival that is well worth the trip.

Inti Raymi – June 24th
Cuzco

What was the key festival of the Incas is now transfigured into a shameless tourist spectacle featuring fake Incas, fake gold, and fake ceremonies. Expect Cuzco to be even more full of tourists and pickpockets than is usually the case.

Chaccu de Vicuñas – June 24th
Pampa Galeras, Ayacucho

The Chaccu is an ancient ceremony to give thanks to Pachamama, the female Earth spirit for protecting the Vicuña, Peru’s graceful wild camelid and source of the finest fiber in the world. The festival, similar to that described in the early days of the conquest, consists of forming a human circle around the vicuña, trapping them inside as the people approach each other.

Day of Saint Peter and Saint Paul – June 29th
Peru’s coast

Centered in the city of Chimbote, the festival features a religious procession in fishing boats decorated with flowers. Smaller ceremonies take place in other coastal towns, commemorating the disciples who were fishermen.