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Affect and Case Vii Peru Essay

1.What are some current issues facing Peru? What is the climate for doing business in Peru today?

Answer: Following current issue facing peru.
-Health/ Environmental
-Financial Problems
-Ethnic squabbles
-Election issues
-Mining issues

Like many countries around the world, Peru has its share of economic problems. Peru is not a stable country right now given the many current issues they are facing. There are health and environmental concerns. These concerns include new hospitals, providing a healthy place to live, and that the environment is damaged. The health issues are bringing about other issues such as money, ethnic squabbles, and even election issues. Some of the nomadic groups in Peru may be affected by new government rulings, which also affects the elections. There have been some misguided payoffs also that have affected the confidence some have in Peru. All of the issues named will have an effect on business in Peru today.

The main industry in Peru is mining, but even the mining business is seeing a lot of struggles. In fact, with regards to the mines many are being shut down or at least closed off due to dangerous squabbles. For example, Bear Creek investors have left because of the mining upheaval which was a deadly protest. Mining in Peru is close to a $4 billion industry in a year. Already for 2011 the industry has earned $2.43 billion. Despite the earnings being up 68% there is so much unrest in the country that it is affecting the business climate today. Those who want to invest have to be wary that they could lose a lot of money because the mines could be a target for demonstrations. These demonstrations relate to safety, health, money, and ethnicity, which goes back to the current issues the country is facing. Peru while being discussed in certain aspects is not the main focus for business industries.

2. What type of political risks does this fishing company need to evaluate? Identify and describe them?

Answers:

The financial institution and fleet owner is concerned however, that the Peruvian government might step in during next couple of years and again take over the business.

Fishing company is facing the nationisation risk. If the Government wants to get more income, it may seize the fishing company to become a Government’s asset. The fishing company may not have any compensation. So, the fishing company needs to consider on the Governor, Governing parties and their governing policies.

3. What types of integrative and protective and defensive techniques can the bank use?

Answer: The bank can have the lobbying technique on the governing bodies. Let say, the fishing company and the bank’s PR can have a say to the members of the parliament and ask them to support or against the motion.

4. Would the bank be better off negotiating the loan in New York or in Lima? Why?

Answer: The bank may better negotiate and sign the loan in New York. Because it contract may be protected by the US Law which will consider to have more advantages.


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