In 2011, Peru and Japan They signed an economic association agreement, but more needs to be made of it. The new president of the Peruvian Japanese Business Council (Cepeja), Martin Perezexplains how to get more benefits.
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Japan is Peru’s second trading partner in Asia. How can we take advantage of that?
I think we can attract more Japanese investment, as well as foreign direct investment in general. But we must recognize that we have complexities as a country, such as insecurity, the issue of excessive bureaucracy. It must also be noted that Peru in the last 23 years has only had a 7% currency devaluation. Chile, in that same period, has had a 69% devaluation.
How does this monetary stability benefit us from the Japanese?
That the currency where you invest is stable makes a lot of sense for the investor because, in the case of the Japanese investor, they bring their yen and exchange them into the local currency. Peru has this characteristic that makes it attractive. Furthermore, we have had one of the lowest inflations in Latin America, and perhaps the world, for a long time. We have a very good level of reserves, a very low level of debt. These are things that investors like.
Is Peru one of the most attractive countries for Japan in the region?
I would say that Japan is very interested in expanding its investments in Peru. According to the Ministry of Foreign Affairs of Japan, there are 72 Japanese companies that invest in Peru; Of those, 42% are interested in expanding their investments in the country. I think we have to worry about how to make sure we have a more favorable environment for investment and, of course, Japanese investment is also going to come. We have a Free Trade Agreement (FTA) from which we must take more advantage. Japan needs to supply itself with critical materials for the development of its industry and mining is perfect for that, because they want to secure themselves with copper, which is going to be a mineral that is going to experience high demand: it could triple or quadruple. There are even those who say it could grow 20 times. We are the second country in the world with the highest copper production, we have an advantage there.
What other sectors generate interest?
Japan loves the topic of mining decarbonization processes, they like energy, they like infrastructure. What do we need? Being in Japan and helping our agricultural exporters to have more facilities, and for our exports of blueberries, grapes, and avocados to flow with greater power. We must work to open all countries and, without exception, also Japan, so that our exports can arrive more easily.
In addition to the 42% of companies that want to expand their investments in Peru, would there also be new investments?
The important investment is in Peru today and that gives us an advantage, because they know the country and could quickly be inclined to develop new investments. If a company is not in the country, it is in neighboring countries, such as Chile, Argentina, Colombia, and they look at us permanently. It is interesting that Peru is more attractive, because we are a blessed country: different climates, we have minerals. So, we have to convince Japanese investors that, instead of going to other neighboring economies, they come here, but we have to provide these regulatory frameworks that are competitive; They don’t have to be the best, they have to be competitive.
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Will the arrival of the Port of Chancay also benefit our relationship with Japan?
Definitely. We spoke with several investors and they told us that Chancay is excellent news for Peru and for commerce. Everyone is going to use and benefit from these better conditions that Chancay is going to give us.
How to take advantage of that?
In reality, the port will help us be more efficient in exporting and importing. The days of transit from Peru to the Asian area will be reduced. Furthermore, Peru has to take advantage of the Free Trade Agreement it has with the United States, which allows us, if we had a free zone, which is something that is under discussion today, Japanese investors could come and make some type of transformation to some product and, using this trade agreement with the northern country, export there in very good conditions.
In what other sector can Peru take advantage of the relationship with Japan?
We have talked to see the possibility that a Japanese airline could come to Peru or to some intermediate point and then to Lima. Today, they arrive in Mexico City, Houston, Los Angeles, New York, and from there people take another airline to reach the country. Promperú can promote Peruvian tourism in Japan. Thus, 40,000 to 80,000 tourists could arrive from that country to ours, and they are tourists who have a higher than average spending level.
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