The Agriculture And Economics Of Peru Essay

, Research Paper

Peru’s gross domestic product in the late 1980s was $19.6 billion, or about $920

per capita. Although the economy remains primarily agricultural, the mining and

fishing industries have become increasingly important. Peru relies primarily on the

export of raw materials?chiefly minerals, farm products, and fish meal?to earn

foreign exchange for importing machinery and manufactured goods. During the

late 1980s, guerrilla violence, rampant inflation, chronic budget deficits, and

drought combined to drive the country to the brink of fiscal insolvency. However,

in 1990 the government imposed an austerity program that removed price controls

and ended subsidies on many basic items and allowed the inti, the national

currency, to float against the United States dollar.

About 35 percent of Peru’s working population is engaged in farming. Most

of the coastal area is devoted to the raising of export crops; on the monta?a and the

sierra are mainly grown crops for local consumption. Many farms in Peru are very

small and are used to produce subsistence crops; the country also has large

cooperative farms. The chief agricultural products, together with the approximate

annual yield (in metric tons) in the late 1980s, were sugarcane (6.2 million),

potatoes (2 million), rice (1.1 million), corn (880,000), seed cotton (280,000),

coffee (103,000), and wheat (134,000). Peru is the world’s leading grower of coca,

from which the drug cocaine is refined.

The livestock population included about 3.9 million cattle, 13.3 million

sheep, 1.7 million goats, 2.4 million hogs, 875,000 horses and mules, and 52

million poultry. Llamas, sheep, and vicu?as provide wool, hides, and skins.

The forests covering 54 percent of Peru’s land area have not been

significantly exploited. Forest products include balsa lumber and balata gum,

rubber, and a variety of medicinal plants. Notable among the latter is the cinchona

plant, from which quinine is derived. The annual roundwood harvest in the late

1980s was 7.7 million cu m.

The fishing industry is extremely important to the country’s economy and

accounts for a significant portion of Peru’s exports. It underwent a remarkable

expansion after World War II (1939-1945); the catch in the late 1980s was about

5.6 million metric tons annually. More than three-fifths of the catch is anchovies,

used for making fish meal, a product in which Peru leads the world.

The extractive industries figure significantly in the Peruvian economy. Peru

ranks as one of the world’s leading producers of copper, silver, lead, and zinc;

petroleum, natural gas, iron ore, molybdenum, tungsten, and gold are extracted in

significant quantities. Annual production in the late 1980s included 3.3 million

metric tons of iron ore; 406,400 metric tons of copper; 2054 metric tons of silver;

203,950 metric tons of lead; and 612,500 metric tons of zinc. About 64.9 million

barrels of crude petroleum were produced, along with 578.3 million cu m of

natural gas.

Much manufacturing in Peru is on a small scale, but a number of modern

industries have been established since the 1950s along the Pacific coast.

Traditional goods include textiles, clothing, food products, and handicrafts. Items

produced in large modern plants include steel, refined petroleum, chemicals,

processed minerals, motor vehicles, and fish meal.

In the late 1980s Peru had an installed electricity-generating capacity of

approximately 3.7 million kw, and annual output was approximately 14.2 billion

kwh. About three-quarters of the total electricity produced was generated in

hydroelectric facilities.

The unit of currency in Peru is the inti, divided into 100 c?ntimos; after

being allowed to float against the U.S. dollar, the inti fluctuated wildly at between

200,000 and 400,000 to the dollar in mid-1990. The Banco Central de Reserva del

Per? (1922) is the central bank and bank of issue. All private domestic banks were

nationalized in 1987.

Exports are more diversified in Peru than in most South American countries. The

principal exports are petroleum, copper, lead, coffee, silver, fish meal, zinc, sugar,

and iron ore. The chief export markets are the United States, Japan, Germany,

Belgium, Luxembourg, Italy, and Great Britain. Exports earned about $2.7 billion

annually in the late 1980s. The leading imports of Peru include electrical and

electronic items, foodstuffs, metals, chemicals, and transportation equipment. The

principal sources of these goods are the United States, Japan, Argentina, Germany,

and Brazil. Imports cost about $2.8 billion annually in the late 1980s.

Peru’s system of railroads, highways, and airports has been expanded

considerably since World War II. The country’s mountains make surface transport

difficult, however. In the late 1980s Peru had about 69,940 km (about 43,460 mi)

of roads, of which 11 percent were paved. The main artery is a section of the Pan-

American Highway, which traverses Peru from Ecuador to Chile, covering a

distance of about 2495 km (about 1550 mi). The Trans-Andean Highway links

Lima and Pucallpa. Peru also has about 2400 km (about 1490 mi) of railroads. One

trans-Andean line, the Callao-Huancayo, ascends to some 4815 m (some 15,800 ft)

above sea level, the highest point reached by any standard-gauge line in the world.

The most notable inland waterway is the Amazon River, which is navigable by

ship from the Atlantic Ocean to Iquitos in Peru. Lake Titicaca also serves as a

waterway. Leading Peruvian seaports include Callao, Salaverry, Pacasmayo, Paita,

and San Juan. The country’s main international airports are situated near Lima,

Cuzco, Iquitos, and Arequipa. Aeroper?, the national airline, offers domestic and

international service.

Peru’s telephone system, which was nationalized in 1970, has some 600,000

instruments. The country is served by more than 300 radio stations and 8 television

stations. In the late 1980s about 4 million radios and 1.6 million television

receivers were in use. In the same period the country had more than 70 daily

newspapers. Dailies with large circulations included El Comercio, Expreso, Ojo,

and La Rep?blica, all published in Lima.