Invest in Peru November 2015 | Page 2

Is peru an emergent country?

First of all, an emergent country is not related with a low economy. Many businessman consider China as an emerging country, even though it is one of the world's biggest economies. They also consider Tunisia as an emerging country, even though China's GDP is $9.24 billion, and Tunisia's GDP is $46.8 million dollars. This means, that a country's size is not proportional to it economy, and it won't decide whether it is an emerging or developed country.

Nowadays, emerging countries, according to the International Monetary Fund, should grow two or three times faster than developed countries like the United States. One of the main reasons United States have grown so much, ironically, is because of their markets outside the United States. These countries are gradually gaining presence all around the world because their exporting business is increasing a lot. This happens because the economy of these countries is based on manufacturing, and most of their products are exported to the developed countries.

The graph in the last page shows how even though United State's economy is bigger than the one of Peru's, Peru has more than twice the one of the ones of United States.

Emerging countries are visualized as countries with low per-capita incomes, high unemployment rate, and lower business and industrial levels compared to developed country, like United States and Switzerland.

One key characteristic of emerging countries is that their stocks can be very unstable. This is because their economy isn't in balance because of the growth, but a simple rise in the economy, like in the interest rate, could completely turn it back down, so it could be said that this countries are risky, but come with a high reward because of their rapid economic growth.

So now, we should ask ourselves, what makes Peru an emergent country? An emerging country is a country that is seen by investors as important prospects to make huge investments on them, because they are the countries that experiences the fastest economic growth. Peru, as other emerging countries, suffer from political problems with foreign investors. Peru has been implementing new laws throughout the last years so that foreign investors have an easier time investing in Peru. Also, people are not very used to foreigners, so they will need some time to take a hang of them.