Talking trade with Alvaro Silva-Santisteban F.

What makes the United Arab Emirates such an attractive prospect for bilateral trade with Peru?

Peru is considered an important trading partner of the United Arab Emirates and relations between the two countries have been growing steadily since we established our office here in 2011. According to the latest trading figures, Peru is now among the UAE’s top four trading partners in Latin America, and the UAE represents Peru’s top trading partner in the Middle East. Total exports from Peru to the UAE have increased by 700 per cent between 2011 and 2014, and from 2014 to March 2016 further growth of 43 per cent was experienced.

The UAE is an attractive commercial market for Peru thanks to its open economy, attractive business environment and continued economic growth. Not only is the UAE one of the strongest economies in the Middle East, it has also established itself as a key international trade hub.

 

How strong is the investment landscape at the moment and what are its main challenges?

Investment potential is excellent in Peru. We are a highly diversified economy that has enjoyed sustained growth for the last 15 years. For example, for 2016-2017 we have a portfolio of land transportation projects worth $18bn under the government-led public-private partnership scheme. Other major projects include $17bn in utilities, $3bn in energy and more than 3,000 kilometres of railway infrastructure.

The challenges, in our view, could be purely a factor of geography. This not due to a matter of distance, but to investors in the region concentrating their investment efforts in geographic areas closer to the source, like Africa, Europe and former Commonwealth of Independent States countries.

 

How active is the UAE in investing in Peru and other South American countries, and what are the key sectors at play?

Over the last five years Peru has received up to S$1.7bn in investments from the UAE. To our knowledge, this makes Peru the second biggest investment destination for the UAE in Latin America.

Peru enjoys a consolidated advantage in energy costs on a regional level because of our high utilisation of natural gas and hydric energy. This is why our utilities and infrastructure sectors continue to attract further investments. Major UAE investors already include DP World, International Petroleum Investment Company and Abu Dhabi Investment Authority.

Earlier this year, Blue Bolt Limited, a wholly owned subsidiary of ADIA, acquired a 36 per cent stake in Fenix Power Perú, a thermoelectric power generation company in Lima, as part of a consortium transaction valued at $786m.

Gastronomy is another important sector for investors thanks to the growing presence of Peruvian cuisine on the international culinary scene. Celebrity chefs like Gastón Acurio have helped to take Peruvian cuisine global and his holding company, Acurio Restaurantes, has attracted investment from the likes of The Abraaj Group.

Tourism is a sector that offers significant potential, but is yet to be discovered by UAE investors.

 

What import / export opportunities are yet to be taken advantage of, and is the market strong enough for countries to explore these?

As a country, we have experienced a significant increase in trade with the UAE over the last five years. This deepening of trade relations has opened a bigger window of opportunity for companies intending to be part of Peru’s economic growth, and has raised awareness of the ease of doing business in our country.

Peru’s main economic activities with the UAE include mining, agriculture, manufacturing, chemicals, construction materials and home décor. We are developing at the moment other sectors like health, jewellery, fashion textiles and the export of services.

The country’s geographical location and diversity of climates enables us to supply fresh and processed foods during the UAE’s off season. Today, Peru is the world’s top producer of fishmeal, fish oil, fresh asparagus, paprika and organic bananas. It is also the world’s second largest producer of artichokes and organic cacao. We also rank among the top 10 exporters of avocados, maca, mangoes and processed asparagus. Peru’s organic produce and superfoods are sectors experiencing particularly strong demand from the UAE.

 

What is the key to developing strong bilateral links, and how can they be well maintained and expanded?

Strong, sustainable bilateral relations between countries must be established on grounds of mutual benefit. The Trade, Tourism and Investment Office of Peru in the UAE plays a major role in placing key tools within the appropriate platform for business models to venture. We do this by identifying relevant and coherent opportunities, promoting and generating sustainable exports and tourism, internationalising companies and materialising the right foreign investments. This all makes our comparative advantages competitive within the market.

The office also helps to establish, foster and maintain strategic alliances with public and private institutions in the UAE, and strengthens the presence and participation of Peru at the international level.

The investment and trade missions between Peru and the UAE play a critical role in showcasing the benefits and opportunities, connecting companies and presenting market possibilities. Currently we support, at a minimum, monthly investor and trade visits to Peru and from Peru to the UAE.

Our office represents and supports a multitude of different sectors. The activities we plan have to account for at least one major display or participation for each economic sector.

 

What developments can we expect to see in the relationship between Peru and the UAE?

Our aim is to become the top investment destination for the UAE in Latin America and its third-largest trading partner overall. We are confident our efforts are moving in the right direction, considering the synergies between our countries and the drive we have as a team to achieve our goals.

We have experienced solid growth over the last five years, as part of the execution and implementation of our ‘3×3’ strategy. This is effectively our nine-year roadmap which, after our initial three-year introductory and country promotional stage, sought to position Peru as the UAE’s fifth largest trading partner in Latin America during what we call the ‘concentration stage’ from 2014-2016. We have already surpassed this target with Peru now considered the UAE’s fourth largest trade partner in Latin America.

Our focus during the final stage of our plan will be to consolidate Peru’s position as an indispensable trade and investment partner of the UAE by deepening our relations across a broader range of strategic sectors.