Peru Political History

Decent Essays
Peru’s political history has presented periods of democratic rule and periods of authoritarian rule. The current president is Pedro Pablo Kuczysnki Godard of the independent party Peruvians for Change. In Peru the president serves as chief of state and head of government. The constitution adopted in 1993, which has since been altered on several occasions, “gives greater power to the president as he appoints the prime minister and ultimately has final say in almost every governmental matter” (GlobalEdge, n.d.). Moreover, Peru is the largest producer of cocaine in the world and the influence of drug traffickers in the government system has grown (The Heritage Foundation, n.d.). There is recognized corruption in Peru’s government.
Peru’s election
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The political risk of radical policy change is low. However, a big problem this president will face is opposition from congress due to another party, Fuerza Popular, holding a majority of seats in congress (73 seats out of 130) (GlobalEDGE, n.d.). Fuerza Popular is Keiko Fujimori’s party, Fujimori was Kuczynski’s rival candidate in the recent election. Some of Kuczynski’s proposals differ from Fujimori’s views, for instance, PPK looks to fight against illegal mining and proposes reforms to the natural resources revenue distribution system (Micklethwaite, 2016). Of which Congress is likely to…show more content…
The Four Risk Factors
Economic risk
The president is the former finance minister and his background also includes working as an economist for the World Bank. “The monetary policy is framed against inflation targeting, currently at 3%; the fiscal management is built on a rule which prevents the deficit to go beyond -1% of GDP” (Euler Hermes, 2016). The president has requested and obtained an exception to this rule. If public debt rises, there is an increased risk of inflation. Furthermore, the corruption in the country decline consumer and business confidence. There is also risk of El Nino and weather conditions to the stability of the economy.
An area of importance to Peru’s economy is the external sector. The export of its natural resources is subject to price volatility. Recently there has been less demand and price decreases in Peru’s copper, silver, and natural gas exports (Focus Economics, 2017). Furthermore, imports now exceed exports and thus may increase risk in trade balance. The import of goods and services in 2015 (current U.S. $) was approximately $44,800M and exports totaled approximately $40,300M (GlobalEdge,
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