Economic Activity - Essay Example

Economic Activities in Peru Peru is a big country about the size of France (KPMG International). The country is endowed with rich natural resources such as copper, silver, and gold (KPMG International). Peru is the second largest producer of copper only second to Chile (KPMG International). However, the country has a growing service industry as well as a thriving farming activities. Majority of the rural areas of the country practice agriculture are they are cut out from the money economy. Peru farmers produce cotton, coca leaves, sugarcane, asparagus and corn as the country’s main cash crops.

The country also practice fishing and animal husbandry. Large number of Ilamas, sheep, cattle, poultry and alpacas are raised for production their product such as milk and meat. Peru has an inhabitants of about thirty million people. This makes the country the third largest populous nation in South America. Moreover, the largest population act as the driver of the economy. It presents a large market for consumer goods and services. In addition, a large population provides a cheap and available labor to the production industries.

Moreover, Peru enjoys a tremendous high gross domestic product of about $330 billion (The Herritage Foundation). This has been a progress of 6.3% in 2013 and 6.5% for the last five years. However, over 60% of Peru live under poverty (Taft-Morales). These are the people who live in the rural areas where the farm products do not have access to the market. Moreover, the farming activities are archaic and make use of traditional methods. The mechanization of agriculture is done by a 1% of the population.

However, the challenges can be addressed and predispose a ready and unexploited market for investment. Peru enjoys a considerable harmony with its neighbors and export and imports good and services across borders. This ensures that the country industry have access to a large market outside the countries. Brazil, China and Chile remain the main export countries for Peru (Market Intelligence). In addition, the country main export country include Brazil and China, who takes the biggest share of the country raw and finished products.

The country also enjoy a high skilled population. These include both men and women as well as young college and university graduates. The services of this skilled individual have sustained the growth path of the country. Peru have embraced the free market economy where the forces of demand and supply determine the prices of goods and services. The country also practice a floating exchange rate and thus attracts foreign direct investment in the country. The population that live below the poverty line has decreased in recent years from 245 in 2001 to 10% in 20110 (Taft-Morales).

Peru remains a stronger economy in the region since 2001 (Taft-Morales). The growth of the country is attributed to the country export of its mineral resources as well as agricultural products. Nevertheless, the country has a wide gap between the rich and the poor. The income distribution details the country from moving to middle-income developing country. Moreover, the problem of poverty have resulted to constant social unrest (Taft-Morales). Works Cited KPMG International . Peru: Country Mining Guide.

New York: KPMG International Cooperative, 2013. Web . Market Intelligence. "Country Profile: Peru." May 2014. Lloyds. Web. 20 October 2014. Taft-Morales, Maureen. "Peru in Brief: Political and Economic Conditions and relations with the United States." 7 June 2013. Congressional Research Service. Web. 20 October 2014.