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.

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.

Machu Picchu entrance fee may rise to $100

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Peruvian tourism minister Mercedes Araoz today discussed the measures that may be put into place to preserve Machu Picchu, including further entry controls and the construction of a cable car system, in association with UNESCO and the World Tourism Organization.

“We have to administer the entry system and the administration of tours, as well as the opening hours,” she said, at a ceremony to mark the site’s election as one of the “New Seven Wonders of the World.

She added that her ministry is working alongside the private sector on several projects, such as the installation of viewpoint at strategic locations and new tour routes around the site.

She ruled out any increase to the entry price for the site, which currently stands at around US$38 for foreigners and $17 for Peruvians, saying “there is no reason to increase the cost of visiting Machu Picchu, and no technical study that suggests any price increase”.

On the other hand, Cusco’s regional president Hugo Gonzalez has suggested a substantial increase to the entry price, which is already significantly greater than that of any of the other sites elected as ‘wonders’. “Foreigners are already spending at least $1000 on their flights and accommodation, so they can afford to pay more for the main reason they came here.”

Gonzalez suggests free entry to residents of the Cusco region, a reduction to $10 for other Peruvians, and an entry price of $80-100 for foreign tourists. Including other fees and standard transport to the site, this would bring the total cost of visiting Machu Picchu from Cusco to around $200.

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.

Apolo, Bolivia, calls on Peru to invade

Locals of an ecological reserve in Bolivia have held protests demanding that they be annexed by Peru. Waving Peruvian flags, as many as 4,000 people filled the local square and called on the mayor to extend an invitation to Peru to occupy the region.

The small town of Apolo, located just 6 hours’ walk from the Peruvian border, marks the entrance to the Madidi National Park, an Amazon wildlife refuge that includes around 1.8 million hectares (4.5 million acres) of pristine rainforest.

Officials opposing the protest claimed that the people were angered that the protected nature of the area prevents them from being legally allowed to log the forest or take advantage of oil reserves thought to exist in the region.

Speaking from La Paz 200km away, Bolivian President Evo Morales referred to the protesters as “drug traffickers and wood smugglers”.

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.

President Garcia: economy as solid as a rock

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President Alan Garcia stated today that he expect the Peruvian economy to grow by 7-8% this year, due to an increase in local consumption and foreign investment, rather than due to the increases in world metal prices that have bolstered the economy in the first quarter but which are due largely to external factors.

Calling the economy “real, material and productive”, he said that Peru’s projected economic growth for 2007 is the highest in Latin America.

He added that the government’s reduction in customs tariffs at the beginning of the year has brought a heavy influx of machinery and capital goods, with first quarter import figures up 40% on 2006.

He referred to this growth as a sign of active investment and increased production capacity, which he expects to be reflected in generation of employment.

The economic growth has occurred despite low inflation rates of around 1%, so the President described the economy as “not heating up”.

He also cautioned against taking the last weeks’ drops in the Lima Stock Exchange (BVL) as indicative of a long-term downturn – a prediction that seems to have come true already with today’s very solid gains on the trading floor.