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As filed with the Securities and Exchange Commission on January 22, 2003
Registration No. 33-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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REGISTRATION STATEMENT
UNDER
SCHEDULE B
OF
THE SECURITIES ACT OF 1933
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Republic of Peru
(Name of Registrant)
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Gabriel Pacheco Crespo
Deputy Consul General of Peru
241 East 49th Street
New York, New York 10017
(Name and address of Authorized Representative
of the Registrant in the United States)
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It is requested that copies of notices and communications
from the Securities and Exchange Commission be sent to:
Carmen Amalia Corrales, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
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Approximate date of commencement of proposed
sale to the public: From time to time after the
effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
- -------------------------------- ------------------- ----------------------- ---------------------- --------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Amount To Be Offering Price Aggregate Offering Amount of
Securities To Be Registered Registered(4)(5) Per Unit(6)(7) Price(4)(5)(6)(7) Registration Fee
- -------------------------------- ------------------- ----------------------- ---------------------- --------------------
Debt Securities (1)(2)
- -------------------------------- ------------------- ----------------------- ---------------------- --------------------
Warrants (1)(3)
- -------------------------------- ------------------- ----------------------- ---------------------- --------------------
Units (1)
- -------------------------------- ------------------- ----------------------- ---------------------- --------------------
Total: $1,000,000,000 100% $1,000,000,000 $92,000
- -------------------------------- ------------------- ----------------------- ---------------------- --------------------
(1) Such indeterminate number or principal amount of debt securities, warrants
and units as may from time to time be issued at indeterminate prices. The
securities registered hereunder shall not have an aggregate offering price
which exceeds $1,000,000,000 in United States dollars or the equivalent in
any other currency.
(2) Also includes such indeterminate number of debt securities as may be issued
upon conversion or exchange of any debt securities that provide for
exchange into other securities or upon exercise of warrants for such
securities.
(3) Warrants may be sold separately or with debt securities.
(4) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies.
(5) Such amount represents the principal amount of any debt securities issued
at their principal amount, the issue price rather than the principal amount
of any debt securities issued at an original issue discount, the issue
price of any warrants and the exercise price of any debt securities
issuable upon exercise of warrants.
(6) Estimated solely for the purpose of computing the amount of the
registration fee.
(7) Exclusive of accrued interest, if any.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
CROSS REFERENCE SHEET
Between Schedule B of the Securities Act of 1933
and the Prospectus
Schedule B
Item Number Location in Prospectus
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1................................... Cover Page
2................................... Use of Proceeds**
3................................... Public Sector Debt, Description of
Securities, Tables and Supplemental
Information*,**
4................................... Public Sector Debt
5................................... Public Sector Finances*
6................................... **
7................................... Authorized Representative
8................................... **
9................................... **
10.................................. Plan of Distribution**
11.................................. ***
12.................................. Validity of the Securities***
13.................................. ***
14.................................. ***
* Information to be provided from time to time by amendment to this
Registration Statement.
** Information to be provided from time to time in Prospectus Supplements to
be delivered in connection with the offering of Debt Securities, Warrants
or Units.
*** Information included in Part II to this Registration Statement or as an
Exhibit thereto or to be filed by one or more amendments to this
Registration Statement.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and we are not soliciting an offer to buy
these securities in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION DATED JANUARY 22, 2003
PROSPECTUS
[Seal of Peru]
The Republic of Peru
Debt Securities
Warrants
Units
The Republic may from time to time offer and sell its debt securities,
warrants and units in amounts, at prices and on terms to be determined at the
time of sale and provided in one or more supplements to this prospectus. The
Republic may offer securities with an aggregate principal amount of up to
US$1,000,000,000. The debt securities will be direct, unconditional and
unsecured external indebtedness of the Republic. The debt securities will at all
times rank at least equally with all other unsecured and unsubordinated external
indebtedness of the Republic. The full faith and credit of the Republic will be
pledged for the due and punctual payment of all principal and interest on the
securities.
The Republic will provide specific terms of these securities in one or
more supplements to this prospectus. You should read this prospectus and any
prospectus supplement carefully before you invest. This prospectus may not be
used to make offers or sales of securities unless accompanied by a prospectus
supplement.
The Republic may sell the securities directly, through agents
designated from time to time or through underwriters or dealers. The names of
any agents or underwriters will be provided in the applicable prospectus
supplement.
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You should read this prospectus and any prospectus supplements
carefully. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of these documents.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
--------------------
The date of this prospectus is , 2003.
[Map of Peru]
You should rely only on the information contained in this prospectus or
the information to which the Republic has referred you. The Republic has not
authorized anyone to provide you with different information. The Republic is not
making an offer of these securities in any jurisdiction where the offer is not
permitted. This prospectus may be used only where it is legal to sell these
securities. The information in this document may be accurate only on the date of
this document.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS..........................................................i
CERTAIN DEFINED TERMS AND CONVENTIONS.........................................ii
FORWARD-LOOKING STATEMENTS...................................................iii
SUMMARY........................................................................1
USE OF PROCEEDS................................................................8
RECENT DEVELOPMENTS............................................................9
THE REPUBLIC OF PERU..........................................................15
THE ECONOMY...................................................................27
BALANCE OF PAYMENTS AND FOREIGN TRADE.........................................55
THE MONETARY SYSTEM...........................................................69
PUBLIC SECTOR FINANCES........................................................90
PUBLIC SECTOR DEBT...........................................................103
DESCRIPTION OF THE SECURITIES................................................113
TAXATION.....................................................................128
PLAN OF DISTRIBUTION.........................................................130
OFFICIAL STATEMENTS..........................................................132
VALIDITY OF THE SECURITIES...................................................132
AUTHORIZED REPRESENTATIVE....................................................132
WHERE YOU CAN FIND MORE INFORMATION..........................................132
TABLES AND OTHER SUPPLEMENTAL INFORMATION....................................A-1
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ABOUT THIS PROSPECTUS
This prospectus provides you with a general description of the
securities that the Republic may offer. Each time the Republic sells securities
covered by this prospectus, it will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. If the information in this prospectus differs from any prospectus
supplement, you should rely on the information contained herein as updated by
the prospectus supplement. You should read both this prospectus and the
accompanying prospectus supplement, together with additional information
described below under the heading "Where You Can Find More Information."
CERTAIN DEFINED TERMS AND CONVENTIONS
Certain Defined Terms
All references in this prospectus to the "Republic" are to the issuer,
and all references to the "Government" are to the central government of the
Republic and its authorized representatives.
The terms set forth below have the following meanings for the purposes
of this prospectus:
o Gross domestic product, which we refer to in this prospectus as "GDP,"
is a measure of the total value of final products and services
produced in a country in a specific year. Nominal GDP measures the
total value of final production in current prices. Real GDP measures
the total value of final production in constant prices of a particular
year, thus allowing historical GDP comparisons that exclude the
effects of inflation. In this prospectus, real GDP figures are based
on constant 1994 prices, the year used by the Banco Central de Reserva
del Peru, which we refer to in this prospectus as the "Central Bank,"
for purposes of maintaining real GDP statistics. GDP growth rates and
growth rates for the various sectors of the Republic's economy are
based on real figures.
o For balance of payments purposes, imports and exports are calculated
based upon statistics reported to the Republic's customs upon entry
and departure of goods into Peru on a free-on-board basis at a given
point of departure, which we refer to in this prospectus as "FOB"
basis. Export data include the gross value of marine resource catches
by non-resident vessels operating with fishing licenses and the value
of goods sold to non-resident transport companies. Import data include
data on imports through the Tacna Special Processing Area, the only
one of Peru's five free trade zones that is currently active,
purchases of goods abroad by resident transport companies and ship
repairs by non-residents.
o The inflation rate provides an aggregate measure of the rate of change
in the prices of goods and services in the economy. The Republic
measures the inflation rate by the percentage change between two
periods in the consumer price index, which we refer to in this
prospectus as the "CPI," unless otherwise specified. The CPI is based
on a basket of goods and services identified by the Instituto Nacional
de Estadistica e Informatica, which we refer to in this prospectus as
the "INEI." The price for each good and service that makes up the
basket is weighted according to its relative importance in order to
calculate the CPI. The annual percentage change in the CPI is
calculated by comparing the index as of a specific December against
the index for the immediately preceding December. The average annual
percentage change in the CPI is calculated by comparing the average
index for a 12-month period against the average index for the
immediately preceding 12-month period. INEI also compiles statistics
to calculate the wholesale price index, which is used to measure the
evolution in prices of a representative group of goods sold in the
wholesale market in 25 cities.
Currency of Presentation and Exchange Rate
Unless we specify otherwise, references to "U.S. dollars," "dollars"
and "US$" are to United States dollars, and references to "nuevos soles" and
"S/." are to Peruvian nuevos soles. Unless otherwise indicated, we have
converted nuevos soles into dollars and dollars, or any other denomination, into
nuevos soles for each year at the year's average exchange rate, calculated by
averaging the exchange rates for each calendar day of the year. We have included
all currency conversions, including conversions of nuevos soles into U.S.
dollars, for the convenience of the reader only and you should not construe
these conversions as a representation that the amounts in question have been,
could have been or could be converted into any particular denomination, at any
particular rate or at all.
On January 20, 2003, the nuevo sol/U.S. dollar exchange rate was S/.
3.492 per US$1.00. See "The Monetary System--Foreign Exchange and International
Reserves--Foreign Exchange."
Presentation of Financial Information
The Republic has presented all annual information in this prospectus
based upon January 1 to December 31 periods, unless it has indicated otherwise.
Totals in some tables in this prospectus may differ from the sum of the
individual items in those tables due to rounding.
Certain statistical information included in this prospectus is
preliminary in nature and reflects the most recent reliable data readily
available to the Republic as of the date hereof. The Central Bank conducts a
review process of the Republic's official financial and economic statistics.
Accordingly, certain financial and economic information presented in this
prospectus may be subsequently adjusted or revised to reflect new or more
accurate data or in accordance with the Republic's ongoing maintenance of its
economic data. In particular, certain information and data contained in this
prospectus for 1998, 1999, 2000, 2001 and 2002 are preliminary and subject to
routine revisions and possible adjustments by the Central Bank to ensure their
accuracy. Any revised data will be made public in accordance with the Republic's
normal practices for releasing data. The Government believes that this review
process is substantially similar to the practices of industrialized nations. The
Government does not expect revisions of the data contained in this prospectus to
be material, although it cannot assure you that it will not make material
revisions.
FORWARD-LOOKING STATEMENTS
This prospectus and any prospectus supplement relating to the
securities to be offered by this prospectus may contain forward-looking
statements. Forward-looking statements are statements that are not historical
facts. These statements are based on the Republic's current plans, estimates,
assumptions and projections. Therefore, you should not place undue reliance on
them. Forward-looking statements speak only as of the date they are made, and
the Republic undertakes no obligation to update any of them in light of new
information or future events.
Forward-looking statements involve inherent risks. The Republic
cautions you that many factors could affect the future performance of the
Peruvian economy. These factors include, but are not limited to:
o external factors, such as:
- interest rates in financial markets outside Peru;
- the impact of changes in the credit ratings of the Republic;
- the impact of changes in import tariffs and exchange rates;
- the impact of changes in the international prices of commodities;
- recession or low economic growth affecting Peru's trading
partners; and
- the decisions of international financial institutions, such as
the International Monetary Fund, which we refer to in this
prospectus as the "IMF," the Inter-American Development Bank,
which we refer to in this prospectus as the "IDB," the
International Bank for Reconstruction and Development, which we
refer to in this prospectus as the "World Bank," and the Andean
Development Corporation, which we refer to in this prospectus as
the "CAF," regarding the terms of their financial assistance to
the Republic; and
o internal factors, such as:
- general economic and business conditions or political or military
events in Peru;
- natural events, such as earthquakes and floods;
- present and future exchange rates of the Peruvian currency;
- foreign currency reserves;
- the ability of the Government to enact key economic reforms;
- the level of domestic debt;
- domestic inflation;
- the level of foreign direct and portfolio investment; and
- the level of Peruvian domestic interest rates.
Summary
This summary highlights information contained elsewhere in this
prospectus. It is not complete and may not contain all the information that you
should consider before investing in the securities. You should read the entire
prospectus and any prospectus supplement carefully.
The Republic
Introduction
Peru is a representative democracy located in western South America,
with an estimated population as of December 31, 2001 of 26.7 million people.
Peru's population is multi-racial and multi-cultural, and the country's official
languages are Spanish, Quechua and Aymara. The World Bank classifies Peru as a
lower-middle-income developing country.
Peru is emerging from more than a decade of rule by former President
Alberto Fujimori, who liberalized the country's economy and controlled domestic
terrorism, but also dismantled democratic institutions. Fujimori presided over
the reform of protectionist laws and policies, strengthened the tax system,
achieved price and exchange rate stability and privatized many state entities
during the 1990s. He also managed to largely break up terrorist cells acting in
Peru in the 1980s and early 1990s.
Fujimori's administration ended in November 2000, when, after damaging
disclosures about corruption in his administration and increasing public
protests and discontent, Fujimori fled the country for Japan. Political
instability, coupled with a series of external shocks, limited economic
development during the final years of the Fujimori administration leading to
high rates of underemployment, unemployment and poverty, and a lack of access to
basic health and public services. Charges of corruption are still pending
against Fujimori, who remains in Japan where he has thus far successfully evaded
the Republic's extradition attempts. In July 2002, his close ally Vladimiro
Montesinos, former advisor to Peru's intelligence agency, was sentenced to nine
years in prison after being convicted of usurping office for seizing control of
the intelligence agency while serving as an advisor. More than 70 criminal
charges are still pending against Montesinos ranging from corruption to arms
smuggling and murder.
Goals of the Toledo Administration
In June 2001, the Peruvian people elected Alejandro Toledo Manrique to
the presidency based on a platform that rejected Fujimori's legacy of political
coercion and financial misdealings, but still recognized the value of an open
economic system. President Toledo vowed to restore democracy, fiscal discipline
and transparency to the government, while increasing the living standards of the
poor and disadvantaged, who constitute a majority of the population, through
improvements in education, health and employment opportunities. He also promised
to continue the economic reforms and privatization program first advanced by the
Fujimori administration.
Toledo assumed the presidency in July 2001 against a backdrop of high
unemployment and underemployment, economic recession and social need more severe
than had been acknowledged by the Fujimori administration. Despite the economic
strides achieved between 1990 and 2000, poverty remains a persistent problem in
Peru with more than half of the population living below the poverty line, which
the World Bank defines as a monthly income of less than US$60 per capita,
adjusted to reflect differences in purchasing power. A significant number of
Peruvians live on an income of less than US$30 per capita per month.
President Toledo implemented a number of proposals to stimulate the
Republic's economy, including privatization and fiscal austerity programs.
Toledo's policies spurred moderate economic growth in the fourth quarter of 2001
and the first quarter of 2002. Despite this economic growth, the Toledo
administration faced social protests and unrest spurred by disappointment that
the President's policies had not immediately led to a significant reduction in
the high rates of underemployment, unemployment and poverty.
In an effort to maintain his political alliances and quell public
unrest, Toledo changed his cabinet. At the beginning of July 2002, several
ministers viewed as proponents of neo-liberal economic policies resigned their
posts, including Prime Minister Roberto Danino and Finance Minister Pedro Pablo
Kuczynski, whose pro-private investment policies caused the Toledo
administration to lose popular support. On July 12, 2002 President Toledo swore
in a new cabinet.
The Toledo administration has established the following priorities:
o achieving and sustaining economic growth;
o increasing exports of Peruvian goods;
o reducing unemployment, underemployment and poverty;
o reforming the tax system, primarily by improving tax collection
mechanisms;
o fostering private investment by reinvigorating structural reforms and
promoting investment through concessions, joint ventures and other
similar business forms;
o increasing public investment in education, public health, job
training, low-income housing and other social programs while reducing
overall public spending;
o maintaining low inflation and a floating exchange rate system;
o improving the efficiency of the pension system by fostering
participation in the private pension system;
o stimulating growth in private sector credit by enhancing creditors'
rights;
o reducing public sector debt;
o improving oversight of the financial system and adopting transparency
guidelines and requirements in regulated sectors of the economy;
o improving the efficiency of the public sector; and
o maintaining open trade policies.
These priorities are the basis for various projects and initiatives
that the Toledo administration has pursued since assuming office. These projects
and initiatives include the following:
o increasing the corporate income tax rate from 20% to 27%;
o reducing the payroll tax, known as the Extraordinary Solidarity Tax,
from 5% to 2%;
o initiating a temporary-jobs placement program in impoverished areas of
the country;
o increasing public sector wages 9%;
o creating an agrarian bank to provide the agricultural sector with
greater access to credit;
o transforming Mivivienda, a public development fund offering subsidized
mortgages, into a mortgage securitization agency, with the goal of
increasing mortgage lending and addressing the scarcity of affordable
low-income housing; and
o securing a commitment from donor nations to provide the Republic with
US$1.8 billion for social and economic development programs.
Because President Toledo's political party, Peru Posible, does not have
an absolute majority in Congress, the Toledo administration must seek alliances
with members of other parties to enact its policies and there can be no
assurances that these policies will be enacted or implemented.
The Economy
History and Background. During the 1980s, Peru was beset by
hyperinflation, significant fiscal and current account deficits, a high debt
burden and recession. This economic disequilibrium was provoked by high
government spending, the collapse of private investment brought about by the
attempted nationalization of the banking system and other key industries, and
the destruction of property and human lives unleashed by domestic terrorist
groups such as the Shining Path and Tupac Amaru.
During the period between 1990, the year Alberto Fujimori was first
elected President, and 1996, the country evolved from a closed, protected
economy to a more open and deregulated economic system. GDP grew during this
period and economic sectors that had suffered as a result of terrorism and the
hyperinflationary conditions of the late 1980s began to expand.
1997-2001. During the five-year period from 1997 to 2001, Peru experienced
the following economic results:
o The economy grew by 6.7% in 1997, primarily as a result of increasing
exports, high foreign and domestic investment and consumer confidence.
o The economy contracted by 0.5% in 1998 and grew by only 0.9% in 1999,
primarily as a result of several external shocks, including the Asian
and Russian financial crises, the negative impact of the El Nino
atmospheric phenomenon in 1998 on the Peruvian fishing and
agricultural industries, and the devaluation of the Brazilian real,
which led to the flight of short-term capital and a complete halt in
investment and consumer decisions.
o The economy grew by 3.1% in 2000, expanding significantly during the
first half of the year primarily as a result of increased government
spending and investment reflecting the Fujimori administration's turn
to more populist economic measures to gain public support. The economy
slowed during the second half of the year primarily as a result of the
political turmoil surrounding Fujimori's controversial election to a
third term and his eventual resignation in November 2000.
o The economy grew by 0.2% in 2001, declining in the first half of the
year due to a reduction in public spending and to the continued
political fallout from Fujimori's resignation that weakened domestic
demand and lead to a decline in private investment. In August 2001,
the economy began to expand in response to a government-implemented
fiscal stimulus package that included reducing from 5% to 2% the
special payroll tax, starting a temporary jobs program in the most
impoverished areas of the Republic and increasing public sector
pensions and wages by 9%. In addition, the Republic experienced an
average inflation rate of only 2.0% and record gold, silver and zinc
production that offset a sharp drop in world metals prices.
Recent Economic Developments. The following are preliminary economic
results as of the dates and for the periods indicated:
o the annual inflation rate for 2002 was 1.5%, as compared to 2.0% for
2001;
o the net international reserves of the Central Bank increased 11.5% to
US$9.6 billion as of December 31, 2002, as compared to US$8.6 billion
as of December 31, 2001;
o the consolidated public sector fiscal deficit expanded to 2.0% of GDP
for the first nine months of 2002, as compared to a deficit of 1.4]%
of GDP for the first nine months of 2001; and
o the current account deficit decreased to 1.9% of GDP for the first
nine months of 2002, as compared to a current account deficit of 2.2%
of GDP for the first nine months of 2001.
Balance of Payments
Between 1997 and 2001, the Republic's current account deficit decreased
from 5.8% of GDP in 1997 to 2.0% of GDP in 2001. In 1998, the current account
deficit increased to 5.9% of GDP, as compared to 5.8% of GDP in 1997. In 1999,
the current account deficit decreased to 2.9% of GDP. In 2000, the current
account deficit remained stable at 2.9% of GDP. In 2001, the current account
registered a deficit of 2.0% of GDP. The Republic's yearly surpluses in its
capital account during 1997 and 2001 served to offset current account deficits.
In the period from 1998 to 2000, however, the capital account surplus contracted
and was not sufficient to offset current account deficits, leading to annual
deficits in the Republic's balance of payments.
Changes in the balance of payments account resulted from the following:
o In 1997, the Republic imported a significant number of capital goods
necessary for the modernization of various economic sectors, as well
as consumer and other goods. Exports did not keep pace with imports,
leading to a trade deficit that was primarily responsible for the
current account deficit. At the same time, in 1996 and 1997,
substantial foreign capital flows contributed to increasing surpluses
in the capital account.
o In 1998, the negative effects from El Nino further depressed exports
while imports continued at high levels. The capital account surplus
contracted, although still reaching a surplus, as a result of
significant withdrawals of short-term capital from the country in
response to the adverse effects of the Asian and Russian financial
crises and El Nino's devastating effect on Peru's primary export
market.
o In 1999, exports began to recuperate as the El Nino weather phenomenon
abated and imports declined significantly as capital investments
within the country leveled off. The capital account surplus continued
to shrink.
o In 2000, exports grew significantly, leading to a narrowing of the
trade deficit. In 2000, the capital account surplus edged higher as
compared to 1999.
o In 2001, a decline in imports, due to weaker domestic demand, and an
increase in the volume of the Republic's primary exports reduced the
trade deficit, and the capital account surplus grew in large part due
to a significant increase in foreign direct investment, US$267 million
of which was related to privatization.
During the first nine months of 2002, the capital account surplus grew
by 113% over the same period in 2001, due in part to the issuance of Global
Bonds in February 2002. See "Balance of Payments and Foreign Trade--Balance of
Payments."
Since 1992, the Government has privatized the vast majority of its
assets, including those in the finance, fishing and telecommunications sectors.
Significant progress has also been made in other sectors. The Government has
privatized a majority of its assets in the mining, manufacturing, hydrocarbons,
electricity and agriculture sectors. The more than 258 privatizations that have
been completed in Peru since 1992 have generated revenues of approximately
US$9.8 billion.
In 2002, in response to violent protests and political opposition to
privatization projects, the Government reevaluated its privatization program,
revising the processes it follows prior to privatizing an asset. In addition, it
suspended the privatization of several companies. See "Recent
Developments--Privatization".
Monetary Policy
The Central Bank serves as the Republic's monetary authority. The
Central Bank's primary goal is to maintain a stable monetary environment with
low levels of inflation. Subject to occasional intervention by the Central Bank
in the foreign exchange market to prevent drastic exchange rate fluctuations,
exchange rates and interest rates are allowed to float freely.
The economic and monetary program that the Government implemented
during the early 1990s achieved a drastic reduction in inflation. Prices during
2001 demonstrated significant stability, with an average inflation rate of 2.0%
for 2001, as compared to 3.8% for 2000. See "The Monetary System--Monetary
Policy" and "--Inflation."
The Fujimori administration liberalized interest rates and eliminated
exchange rate controls. These and other reforms fueled significant growth of the
financial sector. The number of financial institutions operating in Peru grew
from 38 in 1990 to 69 by September 30, 2002. Peru's financial system is open to
foreign investment and has benefited from the participation of numerous foreign
banks and institutions. See "The Monetary System--Financial Sector."
The Central Bank maintained a policy during the 1990s of accumulating
international reserves. The Central Bank's net international reserves were
US$10.2 billion in 1997, falling to US$8.2 billion by 2000, but increasing to
$8.6 billion in 2001. As of December 31, 2002, net international reserves
amounted to $9.6 billion. See "The Monetary System--Foreign Exchange and
International Reserves." The Toledo administration plans to continue this
policy.
Public Sector Finances
The non-financial public sector registered a surplus of US$93 million,
or 0.2% of GDP, in 1997 and an overall deficit every year from 1998 to 2001. The
deficits registered during this period ranged from a low of US$475 million, or
0.9% of GDP, in 1998 to a high of US$1.7 billion, or 3.2% of GDP, in 2000. The
principal reason for the increase in the fiscal deficit was that tax collections
fell significantly in 1999 and 2000, as compared to earlier years in the
1997-2001 period. Fiscal expenditures decreased in 1999 and 2001, but not
sufficiently to offset the decrease in tax collections. Debt service remained
flat during the period.
For the first three months of 2002, the non-financial public sector
registered a deficit of US$193 million, or 1.4% of GDP, a 312% decrease from the
US$91 million surplus for the same period in 2001. The Republic projects a
consolidated public sector deficit of 1.9% of GDP in 2003. See "Public
Sector Finances--Consolidated Public Sector."
Public Sector Debt
Ninety-two percent of the Republic's public sector external debt
consists of foreign currency denominated debt. As of December 31, 2001, public
external debt totaled US$19.0 billion, or 35.1% of GDP, compared to US$19.2
billion, or 35.9% of GDP, as of December 31, 2000. Since 1997, the Republic's
public sector external debt as a percentage of GDP and as a percentage of total
exports of goods and services has fluctuated. Public sector external debt
increased substantially between 1997 and 1999, from 31.8% of GDP or 206.2% of
total exports of goods and services in 1997, to 37.7% of GDP or 233.6% of total
exports in 1999. Public sector external debt has since leveled off at 35.9% of
GDP and 205.4% of total exports in 2000 and 35.1% of GDP and 205.5% of total
exports in 2001. This fluctuation was due to decreases in nominal GDP from 1997
to 1999 and increases in nominal GDP in 2000 and 2001.
During the period from 1997 to 2001, multilateral debt represented, on
average, 28.6% of the Republic's public sector external debt. The Republic's
principal multilateral creditors are the World Bank, representing, on average,
42.6% of outstanding multilateral debt each year from 1997 to 2001, and the IDB,
representing, on average, 44.6% of outstanding multilateral debt each year from
1997 to 2001.
The Republic has signed a letter of intent with the IMF to establish a
two-year US$316 million stand-by credit facility for 2002-2004. In this letter,
the Republic agreed to economic targets and performance criteria upon which IMF
support will be conditioned, including enacting comprehensive tax reform aimed
at improving the tax systems neutrality and equity and an ambitious agenda of
privatizations. The Republic has revised its privatization program due to
political opposition and public protest. The IMF has accordingly agreed to
adjust the targets for the consolidated public sector deficit to 2.3% of GDP in
2002 and 1.9% of GDP in 2003.
From 1997 to 2001, total public sector external debt service ranged, as
a percentage of total fiscal revenue, from a low of 19.5% in 1998 to a high of
26.9% in 2000. Public sector external debt service measured as a percentage of
total exports of goods and services increased from 21.9% in 1997 to 24.3% in
1999, before dropping to 21.6% in 2001. During 2002, the Republic expects public
sector external debt service to represent 22.8% of total fiscal revenue and
33.6% of total exports of goods and services. As a percentage of GDP, public
sector external debt service increased from 3.4% in 1997 to 4.0% in 2000 before
dropping to 3.7% in 2001. It is expected to decrease to 3.2% in 2002.
In February 2002, the Republic launched its first international bond
offering in 74 years. The Republic issued and sold the U.S. Dollar-Denominated
Global Bonds due 2012, to which we refer in this prospectus as the Global Bonds,
raising $500 million. At the same time, the Republic retired $1.2 billion in
principal amount of Brady bonds in exchange for a further $923 million in
principal amount of the Global Bonds. The exchange lowered the Republic's debt
by $281 million and freed up a further $50 million in collateral backing the
Brady bonds. The issuance of the Global Bonds increased total debt by $170
million.
In November 2002, the Republic issued an aggregate amount of $500
million of its 9 1/8% U.S. Dollar-Denominated Bonds due 2008. It used the
proceeds to make payments on existing debt and to increase international
reserves.
Debt Record
In 1984, the Republic suspended payment on its external commercial bank
debt. By the end of 1984, the Republic had failed to make scheduled payments of
US$1.0 billion in principal and interest on its commercial bank debt. In three
rounds of negotiations between 1991 and 1996, the Republic rescheduled
approximately US$12.8 billion of its short-term external debt held by the Paris
Club. In 1997, the Republic renegotiated its debt with international commercial
banks under the Brady program. The Brady restructuring reduced the Republic's
international commercial bank debt from US$10.6 billion to US$4.9 billion.
Investor Considerations
In the past, Peru has experienced economic and political instability
and terrorist insurgency. At present, the country is a stable democracy. We
cannot assure you that Peru will not face political, economic or social problems
in the future and that these problems will not interfere with the Republic's
ability to service its indebtedness, including the Securities. In addition,
developments in other emerging countries, such as Argentina, Brazil and
Venezuela, may have an adverse effect on other countries in the region,
including Peru.
Selected Economic Information
(in millions of U.S. dollars, except as otherwise indicated)
For the Three
Months Ended and
For the Year Ended and as of December 31, as of March 31,
----------------------------------------------------- --------------------
1997 1998 1999 2000 2001 2001 2002
--------- --------- --------- --------- --------- --------- ----------
Domestic economy
GDP (at current prices)(1)................... US $58,870 US$56,907 US$51,630 US$53,512 US$54,025 US$12,686 US$13,359
Real GDP (in millions of S/. at constant
1994 prices)(1)............................ S/.117,110 S/.116,485 S/.117,590 S/.121,267 S/.121,513 S/.29,093 S/.29,963
Real GDP growth rate(1)..................... 6.7% (0.5)% 0.9% 3.1% 0.2% (2.4)% 3.0%
Consumer price index (annual average change). 8.5% 7.3% 3.5% 3.8% 2.0% (0.3)% 0.54%
Unemployment rate(2)......................... 7.7% 7.8% 8.0% 7.4% 7.9% N/A N/A
Underemployment rate(3)...................... 45.0% 43.9% 43.2% 43.1% 47.6% N/A N/A
Balance of payments
Total current account....................... US$(3,412) US$(3,357) US$(1,478) US$(1,568) US$(1,094) US$ (488)US$ (343)
Of which:
Trade balance............................ (1,721) (2,466) (630) (317) (90) (186) (41)
Total capital account....................... 5,978 1,854 571 890 1,059 249 406
Of which:
Foreign direct investment................ 2,055 1,582 1,812 662 1,063 276 224
Errors and omissions(4)..................... (122) 253 102 547 452 177 38
Overall balance of payments, excluding
impact of gold valuation adjustment(5) 2,444 (1,250) (805) (131) 417 (63) 101
Change in Central Bank net international
reserves (period end).................. 1,628 (986) (779) (224) 433 (502) 675
Central Bank net international reserves
(period end)................................. 10,169 9,183 8,404 8,180 8,613 8,111 8,786
Public sector balance
Central government revenue(6)................ US$ 9,452 US$ 9,083 US$ 7,635 US$ 8,011 US$ 7,703 US$ 1,907 US$ 1,787
As a % of GDP.............................. 16.0% 16.0% 14.8% 15.0% 14.3% 15.0% 13.4%
Central government expenditure(7)............ US$ 8,907 US$ 8,662 US$ 8,186 US$ 8,311 US$ 8,068 US$ 1,703 US$ 1,775
As a % of GDP.............................. 15.1% 15.2% 15.8% 15.6% 14.9% 13.4% 13.3%
Central government fiscal balance............ US$ (456) US$ (573) US$(1,564) US$(1,312) US$(1,391) US$ (81) US$ (217)
As a % of GDP.............................. (0.8)% (1.0)% (3.0)% (2.5)% (2.6)% (0.6)% (1.6)%
Overall consolidated public sector fiscal
balance.................................... US$ 93 US$ (475) US$(1,629) US$(1,732) US$(1,380) US$ 91 US$ (198)
As a % of GDP.............................. 0.2% (0.9)% (3.2)% (3.2)% (2.5)% (0.7)% (1.5)%
Public sector debt
Public sector external debt.................. US$18,787 US$19,562 US$19,500 US$19,205 US$ 18,967 N/A US$ 19,113
As a % of GDP.............................. 31.8% 34.4% 37.7% 35.8% 35.1% N/A N/A
Public sector domestic debt(8)............... N/A N/A US$ 4,815 US$ 5,045 US$ 5,741 N/A US$ 5,720
As a % of GDP.............................. N/A N/A 9.3% 9.4% N/A N/A N/A
Total public sector debt..................... N/A N/A US$ 24,315 US$24,250 US$24,708 N/A US$ 24,833
As a % of GDP.............................. N/A N/A 47.0% 45.2% N/A N/A N/A
Public sector external debt service:
Amortizations(9)........................... US$ 955 US$ 738 US$ 971 US$ 1,042 US$ 918 US$ 205 US$ 1,059(11)
Interest payments(9)....................... 1,037 1,032 1,057 1,112 1,076 268 234
--------- --------- --------- --------- --------- --------- ----------
Total external debt service.............. US$ 1,992 US$ 1,770 US$ 2,028 US$ 2,154 US$ 1,994 US$ 473 US$ 1,293
========= ========= ========= ========= ========= ========= ==========
As a % of exports of goods and services(10) 21.9% 21.3% 24.3% 23.0% 21.6% 21.5% 63.7%
Exchange rate (end of period, S/. per US$). 2.73 3.15 3.51 3.53 3.44 3.52 3.45
Exchange rate (average, S/. per US$)....... 2.66 2.93 3.38 3.49 3.51 3.52 3.46
(1) Preliminary data.
(2) Refers to the percentage of the working-age population (14 years old or
older) that, in the week the employment survey was conducted, was seeking
remunerated employment.
(3) Refers to the percentage of the working-age population (14 years old or
older) working part-time who would prefer to work more hours, plus the
percentage of the working-age population that usually works full-time but
who, in the week the employment survey was conducted, worked less than 35
hours per week as a result of economic constraints.
(4) Represents errors and omissions in compiling balance of payments accounts
based on double-entry accounting resulting from incomplete or overlapping
coverage, different prices and incomplete times of recording and conversion
practices.
(5) Includes current account balance, financial account, and errors and
omissions.
(6) Excludes privatization receipts.
(7) Includes interest payments.
(8) Totals for 1996, 1997 and 1998 do not include short-term debt, as
short-term debt data is unavailable for those years.
(9) Excludes Central Bank debt.
(10) Includes exports of goods and services and investment income.
(11) Includes US$902 million in Brady Bonds exchanged for Global Bonds.
N/A = Not Available.
Source: Central Bank, unless otherwise indicated.
USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement, the Republic
will use the net proceeds from the sale of securities offered by this prospectus
for the general purposes of the Government, including financial investment and
the refinancing, repurchase or retiring of domestic and external indebtedness.
RECENT DEVELOPMENTS
The information included in this section supplements the information
about us corresponding to the headings below that is contained in other sections
of this prospectus. To the extent that the information included in this section
differs from the information set forth elsewhere in this prospectus, you should
rely on the information in this section.
The Republic of Peru
Government
As of January 1, 2003, Peru's 24 Regional Councils were replaced by 25
new regional governments governed by elected officials. Elections were held on
November 17, 2002 for the presidents, vice presidents and members of local
councils for the new regional governments. The elected officials will serve
four-year terms. APRA won 12 of the 25 regional presidencies, including the
Region of Lima, UPP won two and Peru Posible-FIM, the coalition in government,
won two. The other regional presidential elections were won by independents and
smaller parties.
On November 8, 2002, Congress passed the organic law for the new
regional governments, which establishes the framework under which the new
governments will operate. The organic law gives the regional governments the
authority to borrow money and issue debt domestically or internationally, so
long as, in the latter case, the debt is backed or guaranteed by the central
Government. In addition, it grants the regional governments the power to propose
the creation or elimination of regional taxes.
On January 1, 2003, Congress passed amendments to the organic law for
the regional governments that give the central Government the exclusive power to
determine, conduct and manage national and regional policies in accordance with
national and regional needs. Additionally, the amendments allow the central
Government, in accordance with the Constitution, to issue extraordinary decrees
("Decretos de Urgencia") on economic and financial matters in the event that the
financial or budgetary status of one or more regional governments puts the
national economic and financial situation at significant risk.
The 2003 budget distributes the national budget among the central
Government, regional governments and local governments in accordance with the
new governmental structure.
The Economy
Gross Domestic Product and Structure of the Economy
Peru's GDP grew throughout the ten months ended October 31, 2002. The
following table shows the preliminary measures of monthly annualized GDP growth
during the first ten months of 2002.
2002 GDP Growth(1)
--------------
January .............. 4.3%
February ............. 2.7
March ................ 1.4
April ................ 8.3
May .................. 5.0
June ................. 5.0
July ................. 4.4
August ............... 3.8
September ............ 7.3
October .............. 4.5
- ------------
(1) Preliminary data.
Source: INEI.
The following table sets forth the distribution of GDP in the Peruvian
economy, indicating for each sector its annual growth rate for the periods
indicated, in each case as compared to the previous year.
Gross Domestic Product by Sector
(percentage change from previous year, at constant 1994 prices)
For the three month period ended
--------------------------------
March 30, June 30,September 30,
2001(1) 2002(1) 2002(1) 2002(1)
------- ------- ------- -------
Primary production:
Agriculture and livestock..... (0.6)% 7.5% 6.4% 1.6%
Fishing....................... (13.3) (20.5) 8.9 7.8
Mining and hydrocarbons....... 11.2 25.6 18.6 3.6
Secondary production:
Manufacturing................. (1.1) (0.8) 4.3 5.6
Primary..................... (2.9) (3.6) (2.3) (1.7)
Non-Primary................. (0.6) 0.0 6.4 7.6
Construction.................. (6.0) 10.3 7.9 11.4
Services:
Wholesale and retail trade.... 0.0 0.1 5.1 3.1
Other services................ 0.4 1.0 5.3 5.7
Total primary production..... 1.9 10.0 7.9 1.8
Total non-primary production. (0.2) 1.3 5.6 5.9
Total GDP.................. 0.2 2.8 6.1 5.2
- --------
(1) Preliminary data.
Source: INEI and Central Bank.
Privatization
In June 2002, protests in Arequipa and Tacna against the sale of power
generation companies Egasa S.A. (Generacion Electrica de Arequipa, S.A.) and
Egesur, S.A. (Generacion Electrica del Sur, S.A.) led the Government to suspend
the sale of the two companies and the privatization process. Regional
authorities also challenged the sale. The Government's plan had been to
privatize these companies by the end of September 2002 in a single bidding
process. The offer from Tractebel, the Belgian company that won the
privatization auction, was originally to expire on October 14, 2002. With a
court ruling on the sale's validity pending, Tractebel extended its offer until
January 10, 2003. However, on January 9, 2003 it announced it would not further
extend its offer. Together, Egasa and Egesur own 7% of the power generation
market.
The Monetary System
Financial Sector
The following table sets forth the total gross assets of the Peruvian
financial system for the periods indicated:
Total Gross Assets of the Peruvian Financial System
(in millions of U.S. dollars and as a percentage change from previous year)
Financial system Commercial banks
--------------------------------------------------------------------------------
US$ Growth rate (%) US$ Growth rate (%)
--------------------------------------------------------------------------------
2002:
January....................... 18,934 2.0 17,866 2.1
February...................... 19,080 2.5 18,028 2.7
March......................... 19,774 0.8 18,166 0.2
June.......................... 19,447 (0.7) 17,930 (1.0)
September..................... 19,131 (0.4) 18,119 (0.3)
Source: SBS.
The interbank lending rate as of June 30, 2002 was 2.6% (which
represents an 83.8% decrease from June 30, 2001), as of September 30, 2002 was
5.4% (which represents an 8.5% decrease from September 30, 2001) and as of
December 31, 2002 was 3.8% (which represents a 22.5% increase from December 31,
2001). The following table shows the average monthly interbank lending rate
during 2002 in nuevos soles.
Average Interbank
2002 lending rate in S/.
-------------------
January............... 2.7%
February.............. 2.6
March................. 2.5
April................. 2.5
May................... 2.5
June.................. 2.6
July.................. 2.9
August................ 2.9
September............. 5.4
October............... 4.6
November.............. 3.9
December.............. 3.8
- ---------
Source: Central Bank.
Liquidity and Credit Aggregates
During the first eleven months of 2002, the percentage of loans in the
banking system that were past due fell from 9.0% as of December 31, 2001 to
8.4% as of November 30, 2002.
As of December 31, 2002, Peru's net international reserves were
US$9,603 million, compared to US$8,613 million at December 31, 2001, an 11.5%
increase. The increase in net international reserves during 2002 was largely
attributable to [increased deposits of financial institutions at the Central
Bank, reflecting excess liquidity at the Central Bank and for bank operations,
as well as increased public sector deposits at the Central Bank.] [Please
confirm stated reason; is there another primary reason?]
Inflation
During 2002, prices showed relative stability, with an average
inflation rate of [0.13]% for 2002, as compared to 2.0% for 2001. The Central
Bank's target inflation rate for 2002 was 2.5%. [Please provide actual inflation
rate for 2002.] The following table sets forth the monthly changes in the
consumer price index, or CPI, for each month in 2002.
Consumer Price
Index(1)
(% change)
---- -------------
2002 End of period
---- -------------
January................. -0.52%
February................ -0.04
March................... 0.54
April................... 0.73
May..................... 0.14
June.................... -0.23
July.................... 0.03
August.................. 0.10
September............... 0.47
October ................ 0.72
November................ -0.40
December................ -0.03
- --------
(1) Preliminary data.
Source: INEI.
Foreign Exchange
On January 20, 2003, the nuevo sol/U.S. dollar exchange rate was
S/3.492 per US$1.00. The following table shows the nuevo sol/U.S. dollar
exchange rate for the dates and periods indicated.
Exchange Rates(1)
(S/. per US$)
-----------------------------------
2002 End of period Average
------------- ---------------
January.................... S/ 3.477 S/ 3.460
February................... 3.470 3.477
March...................... 3.446 3.456
April...................... 3.434 3.439
May........................ 3.461 3.451
June....................... 3.510 3.481
July....................... 3.549 3.533
August..................... 3.613 3.570
September.................. 3.644 3.619
October.................... 3.601 3.615
November................... 3.508 3.583
December................... 3.514 3.514
- ----------
(1) Official rates offered by banks.
Source: Central Bank.
Public Sector Finances
Tax Regime
Tax revenues were US$5,326 million for the year ended December 31, 2002
compared to US$6,662 million in 2001, a [o]% [increase]. [Note: the table in the
prospectus provides tax revenues in US$. Please provide the figures in the table
below in US$.] The following table shows the tax revenues for each month of 2002
and the percentage change in monthly tax collections, as compared to the same
period in 2001.
Tax Revenues (in
millions of U.S. % Change from
2002 dollars) Previous Year
----------------- ----------------
January................. 466 4.2%
February................ 345 (19.3)
March................... 359 (13.0)
April................... 571 (1.0)
May..................... 414 (4.4)
June.................... 448 9.8
July.................... 411 (5.6)
August.................. 439 14.4
September............... 466 12.4
October ................ 443 14.5
November................ 450 9.8
December................ 514 23.9
- -------
Source: SUNAT.
The Extraordinary Solidarity Tax, which had been scheduled to expire on
December 31, 2002, was extended until December 31, 2003. The 2% tax is levied on
the total compensation employers pay their employees. Independent workers
earning total gross income of more than S/. 1,808 per month must also pay this
tax on their total gross earnings. The tax does not apply to compensation for
time of service, bonuses for national holidays and Christmas, payments to
household employees and annual profit-sharing allocations.
As of January 1, 2003 the highest income tax rate on individual income
was increased from 27% to 30%.
In addition, in April 2002, a new structure for collection of the
general sales tax was implemented. Under the new structure principal taxpayers
and the government withhold 6% of the value of any acquisitions from suppliers.
They pay the withheld amount directly to the tax administration to be credited
against the general sales tax due by the supplier.
The 2003 Budget
Congress approved the 2003 budget on December 15, 2002. The following
table sets forth the principal assumptions on which the Government's 2003 budget
is based.
Principal Budgetary Assumptions for 2003
2003
-----------------------
Projected real GDP growth............... [4.0]%
Projected inflation..................... [2.50]%
Projected average exchange rate......... [S/.3.56] per dollar
- ---------------
Source: Ministry of Economy.
The 2003 budget projects fiscal revenues of S/. 44.5 billion, or
U.S.$12.5 billion, and public expenditures of S/. 44.5 billion, or US$12.5
billion, amounting to a 24.4% increase in total public expenditures compared to
the 2002 budget. The 2003 budget projects an overall public sector fiscal
deficit for the central Government of US$1.1 billion, or 1.9% of projected GDP
The following table summarizes the Government's principal budgetary
targets for 2003.
Principal Economic Targets for 2003
2003
------------
Overall consolidated public sector deficit (as % of GDP)............ 1.9%
Discretionary public sector expenditures (as % of GDP).............. 2.5%
Gross public sector debt denominated in foreign currency
(in millions of US$)........................................... US$21,431
Increase in net international reserves of the Central Bank
relative to December 2002 (in millions of US$)................. US$40
Source: Ministry of Economy.
Public Sector Debt
In November 2002, the Republic issued an aggregate amount of $500
million of its 9 1/8% U.S. Dollar-Denominated Bonds due 2008. It used the
proceeds to make payments on existing debt and to increase international
reserves.
THE REPUBLIC OF PERU
Territory and Population
The Republic of Peru is located in western South America. It shares its
borders with Ecuador and Colombia to the north, Brazil and Bolivia to the east
and Chile to the south. Its territory covers an area of approximately 496,222
square miles, including a 1,500 mile-long Pacific Ocean coastline and a 200
mile-wide maritime zone. Peru's major cities are Lima, the nation's capital,
Arequipa, Trujillo, Chiclayo, Iquitos, Piura, Chimbote and Cuzco.
Peru is divided by the Andes Mountains into three sharply different
geographical regions--a narrow strip of desert along the western coast, a
central region of high mountains that form part of the Andes and a large heavily
forested area leading to the Amazonian plains in the east. Peru's climate varies
significantly by region, from tropical rain forests in the east and a dry desert
in the west, to temperate and frigid regions in the mountainous central part of
the country. The Andes rise over 20,000 feet and contain large plateaus and
extensive valleys. Lima and other major cities such as Trujillo and Chiclayo are
located along the coast.
Peru's central coast is occasionally affected by an atmospheric
phenomenon known as El Nino, which raises the temperature of the superficial
coastal waters, causing an increase in air temperature, a decrease in
atmospheric pressure along the coast and an increase in the sea level along the
Peruvian coastline. These conditions produce increased rainfall in the northern
coast, which may result in severe flooding and mudslides. In 1998, the warm
waters caused by El Nino disrupted Peru's fishing and agricultural industries as
marine life migrated to deeper, colder waters, crops were destroyed by the
flooding and the elevated temperatures along the coast gave rise to new crop
pests and plagues. The flooding also led to approximately US$1.2 billion in
damage to Peru's infrastructure. The El Nino weather phenomenon is expected to
recur in 2003 or shortly thereafter. However, the timing of the next recurrence,
its length and the severity of its effects cannot be predicted.
Peru's southern region is located on seismic faults, which makes the
area susceptible to earthquakes. In June 2001, an earthquake measuring 8.4 on
the Richter scale struck along the coast of south-central Peru and killed at
least 80 people, injured over 2,700 people and rendered approximately 47,500
people homeless. Another earthquake measuring 7.6 on the Richter scale struck
the same area in July 2001. The damage from these two earthquakes is estimated
at US$300 million.
Peru's population, estimated to be 26.7 million people as of December
31, 2001, is multi-racial and multi-cultural. Approximately 45% of the
population is Indian, 37% is Mestizo, or mixed Indian and white, 15% is
Caucasian, 2% is of African descent and 1% is of Asian descent. Spanish,
Quechua, and Aymara are the country's official languages. Almost 99% of the
population is Spanish-speaking and approximately 28% resides in rural areas. The
population grew at an estimated average rate of 1.8% per year in the period from
1988 to 2001.
Peru's adult literacy rate is approximately 87.7%. In 2001,
approximately 96.5% of children ages 6 to 11 attended school, while attendance
of children ages 12 to 16 was 88.1%. Approximately 435,637 students were
enrolled in Peru's 75 universities, of which 44% are public and the rest
private. There are 19 private universities and 7 national universities in Lima,
including the Universidad Nacional Mayor de San Marcos, or National University
of San Marcos, which was founded in 1551 and is the oldest university in South
America. The Republic also maintains universities in Arequipa, Cuzco and
Trujillo. Approximately 20.8% of Peruvians between the ages of 17 and 25 pursued
higher education during the 2000 school year.
The World Bank classifies the Republic of Peru as a lower-middle-income
developing country. The following table sets forth comparative GNP figures and
other selected comparative statistics for the periods indicated.
United
Peru Argentina Bolivia Brazil Chile Colombia Ecuador States Venezuela
---- --------- ------- ------ ----- -------- ------- ------ ---------
Per capita GNP(1)....... US$4,799 US$12,377 US$2,424 US$7,625 US$9,417 US$6,248 US$3,203 US$34,142 US$5,794
United Nations index
of human
development (world
ranking)(2).......... 82 34 114 73 38 68 93 6 69
Life expectancy at
birth
(in years)(2)........ 68.8 73.4 62.4 67.7 75.3 71.2 70.0 77.0 72.9
Infant mortality
(% of live
births)(3)........... 3.9% 1.8% 5.9% 3.2% 1.0% 2.3% 2.8% 0.7% 2.0%
Adult literacy rate(2).. 89.9%(8) 96.8% 85.5% 85.2 95.8% 91.7% 91.6% 99.0% 92.6%
% of households below
the poverty line(4).. 54%(9) N/A 51.4%(6) 25.4%(6) 18.4%(5) 28.7%(5) 52.3%(7) N/A 44.6%(6)
(1) 2000 data, adjusted to reflect differences in purchasing power. Source:
World Bank, World Development Report 2002.
(2) 2000 data. Source: United Nations Development Program, Human Development
Report 2002.
(3) 2000 data. Source: United Nations Development Program, Human Development
Report 2002.
(4) The poverty line used in this prospectus is defined as a monthly income of
US$60 per capita per household, or a daily income of US$2 per capita per
household, adjusted to reflect differences in purchasing power.
(5) 1996 data.
(6) 1997 data.
(7) 1995 data.
(8) 2000 data. Source: United Nations Development Program, Human Development
Report 2002.
(9) 2000 data. Source: World Bank, Peru at a Glance 13 September 2001
N/A = Not Available.
Source: World Bank, 2002 Development Indicators, unless otherwise indicated.
History, Government and Political Parties
History
Beginning in the ninth millennium B.C., several developed cultures
settled in Peru, including the Chavin, Sechin, Chimu, Mochica, Paracas, Nazca,
Tiahuanaco and Wari. In the twelfth century A.D., the Quechua-speaking Inca
settled around the Cuzco Valley. By the time the Spanish arrived in 1531, the
Inca had created an empire that encompassed areas of modern Peru, Ecuador,
Bolivia and Colombia. In 1533, the Spanish captured the Inca capital at Cuzco
and by 1542 had consolidated their control over the entire Inca territory. In
1542, the Spanish established the viceroyalty of Lima, which governed vast
portions of Spanish territorial possessions in South America.
Peru remained under Spanish rule until 1821, when Jose de San Martin
proclaimed independence, although the Spanish were not finally defeated until
1824. In the first two decades of the post-independence era, political
fragmentation and political instability plagued the country. Peru was ruled by
at least twenty-four regimes between 1821 and 1845. During this period, the
constitution was rewritten six times. In the 1840s, the country initiated a
period of extraordinary economic growth driven by the exportation of guano, a
form of fertilizer obtained from the droppings of birds in the Chincha Islands.
In 1879, Peru allied itself with Bolivia to fight an unsuccessful war
against Chile over the disputed nitrate-rich Atacama Desert. This war, known as
the War of the Pacific, ended in 1883 with the signing of the Treaty of Ancon,
in which Peru ceded to Chile in perpetuity the nitrate-rich province of Tarapaca
and relinquished, for a period of ten years, the provinces of Tacna and Arica.
Tensions over these two provinces continued until 1929, when the United States
brokered a deal that returned the province of Tacna to Peru but allowed Chile to
retain control over the province of Arica.
From 1895 to 1914, Peru experienced political stability and economic
growth. In 1914, Colonel Oscar Raimundo Benavides (1914-15, 1933-39)
orchestrated a military coup that ended almost two decades of uninterrupted
civilian rule. In the early stages of World War I, Peru experienced a recession
as the war temporarily cut the country off from its export markets. When
overseas trade resumed, demand for Peru's export products increased dramatically
and the country suffered a period of sustained inflation. This inflation had a
particularly negative impact on Lima's working classes and led to a wave of
labor strikes in 1918 and 1919.
In 1919, Augusto Leguia y Salcedo (1908-12, 1919-30) began an
eleven-year rule, known as the oncenio, and created a new, progressive
constitution adopted in 1920 that enhanced the power of the state to carry out a
number of popular social and economic reforms. The regime weathered a brief
postwar recession and then generated considerable economic growth by opening the
country to foreign loans and investment. Leguia's popularity waned, however, as
a result of a border dispute with Colombia involving territory in the
rubber-tapping region between the Rio Caqueta and the northern watershed of the
Rio Napo. Under the U.S.-brokered Salomon-Lozano Treaty of March 1922, the Rio
Putumayo was established as the boundary between Colombia and Peru.
During the 1930s, a popular movement, with origins in Mexico, known as
the Alianza Popular Revolucionaria Americana or American Popular Revolutionary
Alliance, which we refer to in this prospectus as the "APRA," spread to Peru
under the leadership of Victor Raul Haya de la Torre. This continent-wide
popular alliance quickly became a prominent center-left political party in Peru
and a strong antagonist to Peru's armed forces. In the presidential election of
1931, Luis Sanchez-Cerro (1931-33) defeated APRA's Haya de la Torre, who accused
Sanchez-Cerro of fraud. In July 1932, APRA followers staged a popular rebellion
in Trujillo, which resulted in the execution of some sixty army officers and the
deaths of at least 1,000 APRA members and their sympathizers.
Despite the political turmoil, Peru's economy was one of the least
affected by the Great Depression, because of Peru's relatively diversified range
of exports, led by cotton, lead and zinc. Unlike many other Latin American
countries that adopted import-substitution industrialization measures to
counteract the effects of the Great Depression, Peru made relatively few
alterations in its long-term model of export-oriented growth.
In 1939, Manuel Prado y Ugarteche (1939-45), a Lima banker from a
prominent family and son of a former president, was elected president. He was
soon confronted with a border conflict with Ecuador that led to a brief war in
1941. The conflict dated back to the post-independence period. Following
independence, Ecuador had been left without access to either the Amazon River or
the region's other major waterway, the Rio Maranon, and thus, without direct
access to the Atlantic Ocean. In an effort to assert its territorial claims in a
region near the Rio Maranon in the Amazon Basin, Ecuador's military occupied the
town of Zarumilla along its southwestern border with Peru. The Peruvian army
responded and defeated the Ecuadorian army. For a discussion of Peru's relations
with Ecuador, see "--Foreign Policy and Membership in International and Regional
Organizations--Relations with Ecuador" below.
During the 1950s and 1960s, Peru experienced export-led growth and
increased national and foreign investment. During this time, many peasants
migrated to the coast, the center of the country's economic growth. As a result
of heavy migration, the population of metropolitan Lima increased to over 1.6
million in 1961 from 100,000 in 1940.
In 1968, Peru returned to military rule when General Juan Velasco
Alvarado (1968-1975) overthrew elected President Fernando Belaunde Terry of
Accion Popular, which we refer to in this prospectus as the "AP." Velasco
implemented an extensive program of agrarian reform and nationalized the
fishmeal and oil industries, petroleum companies, and several banks and mining
companies. General Francisco Morales-Bermudez Cerruti replaced Velasco in 1975.
He presided over the transition to civilian rule and the drafting of a new
constitution in 1979.
In 1980, voters reelected Belaunde in the first popular elections since
1968. Belaunde attempted to cut spending and dismantle many of the military
government's populist reforms. Soaring inflation and unemployment, however, made
it difficult to curb public spending. At the same time, Belaunde's government
was destabilized by the rise of subversive movements.
The Sendero Luminoso, which we refer to in this prospectus as the
"Shining Path," was founded in 1970 as an offshoot of the Peruvian Communist
Party. The group espoused Maoist ideology and initiated terrorist activities in
1980 as a means of overthrowing the government. The Movimiento Revolucionario
Tupac Amaru, or Tupac Amaru Revolutionary Movement, which we refer to in this
prospectus as "Tupac Amaru," was founded in 1984 as a radical leftist
organization that promoted communal ownership of property and advocated an armed
struggle against capitalism. These two groups took advantage of mounting social
unrest produced by 12 years of military rule and growing class consciousness
among indigenous communities to recruit members. They raised funds by
establishing a financial alliance with drug traffickers and protecting expanding
coca fields. Drawing on these funds, the Shining Path and Tupac Amaru waged a
guerilla war against the government and engaged in rural terrorism. The social
crisis in the country in the early 1980s was exacerbated by a sharp drop in
international commodity prices and the El Nino weather phenomenon of 1982-1983,
which led to a deepening recession and increasing social instability.
Alan Garcia Perez of the center-left APRA party won the presidency in
1985. The Garcia administration was plagued by terrorist activity and
allegations of corruption. President Garcia pursued a populist agenda, financed
by substantial increases in government spending that led to a record 7,650%
inflation rate in 1990. He attempted to nationalize banks and limited Peru's
debt service payments to no more than 10% of exports. In response, international
creditors refused to extend new credits to the Republic. During the Garcia
administration, GDP decreased by 20% compared to levels achieved in the early
1980s.
In 1990, voters elected Alberto Fujimori of the Cambio 90 party as
president. Fujimori implemented a comprehensive neo-liberal economic program
based on fiscal discipline, a stable monetary policy and aggressive
privatization of state-owned industries. These initiatives succeeded in curbing
inflation, reducing public external debt and fostering economic growth. For a
discussion of Fujimori's economic policies, see "The Economy--History and
Background." Fujimori also launched a successful campaign against the terrorism
of the Shining Path and Tupac Amaru guerrilla movements. In 1992, the army
captured the Shining Path's leader, Abimael Guzman, and the terrorist group's
other principal leaders. In 1997, the Peruvian armed forces killed several Tupac
Amaru leaders, including its principal leader Nestor Cerpa Cartolini, in a
rescue operation to free hostages being held by Tupac Amaru at the Japanese
Embassy in Lima. For a description of subversive activity in Peru, see
"--Subversive Activities" below.
Despite Fujimori's economic and military successes, his harsh governing
style created significant congressional opposition. On April 5, 1992, Fujimori
dissolved Congress and called for a popular referendum on amending the
Constitution. The new 1993 Constitution gave the President authority to issue
emergency decrees relating to economic and financial matters, if such decrees
are in the national interest and do not relate to tax matters. Emergency decrees
have the force of law and do not require previous legislative approval, although
Congress may subsequently modify or derogate such decrees. Under the 1993
Constitution, Congress may censure or obtain a no-confidence resolution against
the President's Consejo de Ministros, which we refer to in this prospectus as
the "Council of Ministers," forcing the removal of all the members of the
Council of Ministers. The President may not dissolve Congress in the last year
of its mandate. Additionally, the 1993 Constitution allows presidents to serve
for two consecutive terms, which was prohibited under the prior 1979
Constitution. Fujimori called for new congressional elections in 1992 and was
reelected for a second term in 1995.
Following his dissolution of Congress in 1992 and the adoption of the
1993 Constitution, Fujimori centralized power in the hands of the presidency,
thus undermining legal mechanisms of accountability, strengthening the powers of
the military and intelligence service, and compromising the autonomy of the
legislature, judiciary and the media. This debilitated Peru's political system,
fostered widespread political corruption, and, in the latter years of Fujimori's
administration, undermined the success of his economic program.
In 1995, Peru and Ecuador fought a brief war over a disputed area of
their border. This dispute dated back to the Protocolo de Rio de Janeiro of
1942, which we refer to in this prospectus as the "Rio de Janeiro Protocol," a
treaty between Peru and Ecuador signed after the brief war these countries
fought in 1941. The dispute was finally settled in 1998. For a description of
this dispute and Peru's relations with Ecuador, see "--Foreign Policy and
Membership in International and Regional Organizations--Relations with Ecuador"
below.
Although the 1993 Constitution allowed presidents to serve for only two
consecutive terms in office, Congress in August 1996 passed an interpretative
law clarifying that this limit applied only to presidential terms beginning
after 1993. In December 1996, the Constitutional Tribunal, with the vote of
three members, with four justices abstaining, ruled that the 1996 interpretative
law did not apply to Fujimori. In May 1997, Congress removed the three justices
who voted in favor of this ruling, on the basis that they had exceeded their
authority by attempting to issue a binding opinion with the vote of only a
minority of the Constitutional Tribunal's members. The president of the
Constitutional Tribunal later resigned in protest over Congress' action. On July
28, 2000, Fujimori began a controversial third term as president in the midst of
allegations of electoral fraud.
In September 2000, a bribery scandal involving Vladimiro Montesinos, a
former army captain and lawyer who became an advisor to Peru's intelligence
agency and a close ally of Fujimori, gave rise to charges of political
corruption within the Fujimori administration. Fujimori responded to increased
criticism and mounting protests by calling for new presidential elections to be
held in April 2001. He also announced that he would not seek re-election. Weeks
later, however, the growing investigation into corruption charges and
condemnation of Montesinos and his ties to the President led Fujimori to resign
while on a trip to Japan. As a symbolic gesture, Congress decided not to accept
Fujimori's resignation, preferring to declare the post of Chief of State vacant
due to abandonment and moral incapacity.
Fearing prosecution and claiming that he could not be tried in Peru
because of his Japanese citizenship, Fujimori refused to return to Peru. Under
the 1993 Constitution, the First Vice President was next in line for the
presidency, but Peru's First Vice President had resigned in October 2000, in
protest against Montesinos' influence within the Fujimori administration. The
Second Vice President also resigned following Fujimori's resignation as a result
of his connection to Fujimori and pressure by opposition congressmen. Under the
1993 Constitution, executive authority shifted to Valentin Paniagua Corazao, the
president of Congress, who took over as president on November 22, 2000.
Presidential and congressional elections were held on April 8, 2001. In
the presidential contest, Alejandro Toledo Manrique of the Peru Posible party
obtained 36.5% of the vote, former President Alan Garcia Perez of APRA obtained
25.8% of the vote and Lourdes Flores Nano of the Unidad Nacional party, which we
refer to in this prospectus as "UN," obtained 24.3% of the vote. In June 2001,
Toledo won the presidency in a runoff election against Garcia, receiving 53.1%
of the vote to Garcia's 46.9%.
On August 27, 2001, Congress voted to remove Fujimori's presidential
immunity. On September 5, 2001, Peru's Attorney General formally charged
Fujimori with the murder of 15 people in 1991, and with the forced disappearance
and murder of nine students and a professor in 1992. There have been calls by
certain political leaders to amend or repeal the 1993 Constitution in order to
rescind measures adopted during Fujimori's term, particularly those relating to
executive power.
Government
Peru is organized as a representative democracy and is geographically
and administratively divided into 25 regional governments. See "Recent
Developments". Prior to January 1, 2003, the country was divided into 24
Temporary Regional Administration Councils, which we refer to in this prospectus
as "Regional Councils". The Regional Councils are divided into 193 provinces and
the constitutional province of Callao, the country's principal port, adjacent to
Lima, and 1,828 districts. Each Regional Council was governed by an
administrative official appointed by the President and formed part of Peru's
central Government. Provinces and districts have their own civil governments,
which are independent of the central Government.
Congress is in the process of a comprehensive review of the 1993
Constitution, which may lead to the enactment of constitutional amendments.
The 1993 Constitution provides for a presidential system of government
in which national powers are divided among independent executive, legislative
and judicial branches.
Executive power is exercised by the President, who appoints ministers,
enacts the laws passed by the legislative branch and is the commander-in-chief
of the armed forces. The President may subscribe to treaties without prior
congressional approval, except for treaties relating to human rights, the
Republic's sovereignty, national defense, financial obligations to be assumed by
the Government and treaties that create, modify, or repeal taxes or overrule
existing laws. The President of the Republic is popularly elected for a
five-year term. The 1993 Constitution abrogated the ban on presidential
re-election and provided that a President may be re-elected to only one
consecutive term. The constitution was amended in November of 2000, reinstating
the ban on consecutive presidential terms. Former presidents may seek the
presidency again after a presidential term has elapsed.
The 1993 Constitution provides for two electoral rounds. If the first
round does not yield a majority vote for any one presidential candidate, a
majority in the first round being 50% plus one of the total votes cast, a second
round is held between the two presidential candidates that obtained the greatest
number of votes in the first round. The 1993 Constitution introduced the
positions of First and Second Vice President. These officials are popularly
elected but have no constitutional functions unless the President is unable to
discharge his duties. If the President cannot discharge his duties, the First
Vice President assumes the presidency. The Second Vice President assumes the
presidency if the First Vice President is unable to discharge his duties.
After the President, executive authority is vested in the Council of
Ministers, which is headed by a Prime Minister appointed by the President. The
Prime Minister presides over meetings of the Council of Ministers in the absence
of the President. The Council of Ministers oversees and coordinates the
activities of the Republic's various ministries and must approve all legislative
proposals sent by the President to Congress. However, it may not approve laws
without the President's approval. Each member of the Council of Ministers may
approve ministerial resolutions without the President's consent, but these are
regulations that do not have the force of laws approved by Congress and are
superseded by laws proposed by the Council of Ministers and approved by the
President.
The legislative branch consists of a unicameral congress composed of
120 members who are elected for a five-year term, with all seats subject to
re-election at the end of each five-year period. There are 25 electoral
districts and the number of members elected by each district is proportional to
the district's population. Lima, the most populous district, elects 35 members.
The next congressional elections are scheduled for April 2006. In addition to
passing laws, Congress is empowered to approve the Government's budget and to
approve treaties as described above. Congress may delegate to the executive
branch, for definite periods of time, legislative authority over specific
matters.
The highest courts in Peru are the 18-member Supreme Court of Justice
and the seven-member Constitutional Tribunal. The Peruvian judicial system is
also composed of:
o justices of the peace, who preside over district court proceedings
related to alimony, landlord-tenant, personal debt, and real and
personal property disputes, and who function as arbiters but cannot
issue legally-binding decisions;
o courts of first instance, which include civil, penal and
special-chamber courts having jurisdiction over all cases not under
the express jurisdiction of other courts and a series of specialized
courts dealing with matters such as drug-related cases, and which were
established to reduce the backlog of cases pending final action in the
other courts of first instance;
o military courts, which adjudicate charges of criminal conduct brought
against members of the armed forces and the police while discharging
their duties, and criminal charges for national treason and terrorism
brought against civilians; and
o superior courts, which review judgments rendered by all lower courts,
except military courts.
All judges in the Peruvian judicial system, with the exception of the
justices of the peace, who are elected by popular vote, and the members of the
Constitutional Tribunal, who are elected by Congress, are appointed, and may
only be removed, by the Consejo Nacional de la Magistratura, or National Council
of the Judiciary, which we refer to in this prospectus as the "Judiciary
Council." This independent body is composed of seven members who are elected for
five-year terms by several national entities, through secret votes, as follows:
one by the Supreme Court of Justice, one by the Junta de Fiscales Supremos, or
Board of Supreme Prosecutors, one by the members of the bar associations, two by
the country's other collegiate associations of professionals, one by the
presidents of the national universities, and one by the presidents of the
private universities. The Judiciary Council itself can elect two additional
members. The Judiciary Council reviews and ratifies all judges every seven
years, including the members of the Supreme Court of Justice and justices of the
peace.
The Supreme Court of Justice has ultimate jurisdiction over all matters
adjudicated by the superior courts and over military court rulings in which the
death penalty is imposed. Its members must be older than 45 years of age and
must retire by age 70. The Judiciary Council may remove, or fail to ratify, a
member of the Supreme Court of Justice only because of physical or mental
incapacity, or for engaging in conduct incompatible with his or her duties.
The Constitutional Tribunal is the final arbiter of the Constitution.
Its members are appointed by Congress for five-year terms, are not subject to
re-election and cannot be removed before their term expires, unless Congress
determines that a magistrate has:
o become physically incapacitated or morally unfit;
o engaged in conduct incompatible with his or her duties; or
o been adjudicated and found guilty of a crime.
Political Parties
With the exception of APRA and AP, Peru's political parties do not have
deep historical roots and often change, merge or dissolve. Currently, the
principal political parties in Peru are Peru Posible, APRA, UN, AP, Frente
Independiente Moralizador, which we refer to in this prospectus as "FIM," and
Union por el Peru, which we refer to in this prospectus as the "UPP."
The following is a brief explanation of the political orientation of
each of these parties.
Peru Posible. Peru Posible seeks to promote economic growth through a
liberal economic program designed to foster domestic and foreign investment and
fiscal and macroeconomic stability, while investing in social programs designed
to alleviate poverty and create employment. Peru's current president, Alejandro
Toledo, founded the party in 1994. Because this party does not have an absolute
majority in Congress, the Toledo administration must seek alliances with members
of other parties to enact its policies.
APRA. Initially left wing in its outlook, APRA became a conservative
force during the 1950s and is now a center-left party. Alan Garcia, a member of
APRA, became President in 1985. Despite the fact that his presidency is
associated with hyperinflation and economic mismanagement, Garcia obtained
significant support in the 2001 election, forcing a runoff in which Alejandro
Toledo prevailed. Although defeated in the latest presidential elections, APRA
wields significant political influence, as it is the party with the second
highest representation in Congress.
UN. The UN is an electoral alliance formed by three parties: Partido
Popular Cristiano, Solidaridad Nacional and Avancemos. It supports socially
oriented market policies with a focus on promoting Christian values. In April
2001, Lourdes Flores Nano ran as the UN's presidential candidate.
AP. The AP supports a moderate reform program that emphasizes
modernization and development through an activist public sector. Fernando
Belaunde, who served as Peru's president from 1963 to 1968 and from 1980 to
1985, founded the AP in 1956. The AP's membership includes Valentin Paniagua,
who became Peru's president during the transition government that followed
Fujimori's resignation in 2000. The party continues to base its platform on
Belaunde's governing philosophy.
FIM. The FIM places an emphasis on measures to eliminate and expose
corruption in government, promoting an activist Congress that maintains proper
checks on executive power. The party's economic platform focuses on reducing
income taxes and increasing public sector wages. Fernando Olivera Vega, the
former Minister of Justice, founded FIM in 1990.
UPP. The UPP adheres to socially oriented market policies focused on
job creation, labor protection and environmental initiatives. Javier Perez de
Cuellar founded the UPP in 1995, when he unsuccessfully challenged Fujimori in
the elections. In the 2001 elections, the UPP formed an alliance with two
smaller movements, Movimiento por la Democracia and Movimiento Social Democratas
Independientes.
Congressional representation of each of the political parties since the
most recent election in 2001 is as follows:
Congress
Seats %
Peru Posible.................................... 45 37.5%
APRA............................................ 28 23.3
UN.............................................. 17 14.2
Union Parlamentaria Descentralista(1)........... 13 10.8
FIM............................................. 11 9.2
Independent Parliamentary Group(2).............. 6 5.0
------ ------
Total.......................................... 120 100.0%
====== ======
(1) Coalition of UPP, Somos Peru and AP.
(2) An informal group of independent members of Congress and representatives of
Peru 2000.
Source: Economist Intelligence Unit, "Country Briefings: Peru" 12 February 2002.
Foreign Policy and Membership in International and Regional Organizations
Peru has not been involved in any significant international conflicts
since the end of its border dispute with Ecuador in 1998. A brief diplomatic
dispute erupted in 2001 between Peru and Venezuela in connection with the
capture of the former advisor to Peru's intelligence agency, Vladimiro
Montesinos, in Venezuela. The Republic alleged that Venezuela had temporarily
hidden and protected Montesinos after formal charges had been brought against
him in Peru, a claim that Venezuela denied. Venezuela temporarily severed
relations with Peru between June 28 and July 28, 2001, but relations between the
two countries have since been completely restored.
The Republic has expressed concern over Japan's refusal to extradite
Fujimori to Peru to face charges for homicide and forced disappearance. Japan
granted Fujimori citizenship in December 2000 due to his Japanese ancestry and
Fujimori has since claimed that as a Japanese national he may not be legally
extradited. The Toledo administration will continue to seek Fujimori's
extradition, but it does not expect the Republic's commercial and other ties
with Japan to be adversely affected by the dispute.
The Republic maintains diplomatic relations with 153 countries and is a
member of 146 regional and international organizations and forums, including:
o the United Nations;
o the Organization of American States;
o the Community of Andean Nations, formerly known as the Andean
Pact;
o the World Trade Organization, which we refer to in this
prospectus as the "WTO";
o the Economic Commission for Latin America and the Caribbean;
o the Latin American Integration Association;
o the IDB;
o the IMF;
o the World Bank;
o the International Finance Corporation;
o the CAF;
o the Group of 15;
o the Asia-Pacific Economic Cooperation; and
o the Free Trade Area of the Americas.
Peru joined the General Agreement on Tariffs and Trade in 1951 and is a
founding member of the WTO, which was established in January 1995. In addition,
Peru participates in several regional initiatives designed to promote trade and
foreign investment. The most significant of these initiatives are the following:
o Since 1980, Peru has been a member of the Latin America
Integration Association, which promotes and coordinates bilateral
trade agreements between its member countries. Under the auspices
of this association, Peru has signed preferential tariff
agreements with Argentina, Brazil, Cuba, Mexico, Paraguay and
Uruguay.
o Since 1990, Peru has been a member of the Community of Andean
Nations, which also includes Colombia, Ecuador, Venezuela and
Bolivia. The objective of this organization is to promote
economic integration and cooperation with a view towards gradual
development of a common market by 2005. The common market will
provide for the free trade of goods, services, capital and people
between its member countries. A tariff reduction schedule has
been in place since 1997, which currently applies a 15% to 100%
tariff reduction on various products. In April 1998, the
Community of Andean Nations signed a framework agreement with the
Common Market of the South, or MERCOSUR, whose members are
Argentina, Brazil, Paraguay and Uruguay, to create a free trade
zone between the two economic blocs. The Community of Andean
Nations has also reached bilateral agreements with Brazil and
Argentina as a first step towards the creation of free-trade
arrangements with these countries.
o Since 1990, Peru has been a beneficiary of the General System of
Preferences for the Andean Countries, a program of unilateral
trade preferences granted by the European Union that is intended
to promote economic development in the Andean region. Under the
program, the European Union sets zero tariffs for fishing,
agriculture and textile products from Peru. This program was
scheduled to expire on December 31, 2001, but was automatically
renewed for three more years on December 10, 2001. The renewed
program will be in effect from January 1, 2002 until December 31,
2004, when a new round of negotiations on the terms and
conditions of the program will take place.
o Since 1991, Peru has been, together with Ecuador and Colombia, a
beneficiary of the U.S. Andean Trade Preferences Act, a program
of unilateral trade preferences granted by the United States,
which is intended to promote export diversification and
broad-based economic development as an alternative to drug-crop
production in the Andean region. Peru supplies about 42.6% of the
products that enter the U.S. market under this program. The Act
expired on December 4, 2001. Preliminary data suggests that the
expiration of the Act has adversely affected Peru's exports. On
August 8, 2002, the U.S. renewed the Act for five years. The
renewed Act provides benefits retroactively to December 2001 and
expands the Republic's low-tariff benefits to products including
Peruvian textiles, footwear, fruits and tuna.
o In 1994, the Republic participated in the Summit of the Americas
in Miami, which led to the establishment of the Free Trade
Agreement of the Americas. This agreement seeks to create a free
trade zone in the Western Hemisphere by 2005, which, if
implemented, would grant preferential treatment to Peruvian goods
and services exported to other member countries.
o In June 1998, Peru signed an agreement with Chile as a first step
towards establishing a free-trade zone with this neighboring
country. This agreement, which took effect on July 1, 1998,
gradually eliminates all custom duties between the two countries,
provides for a substantial reduction in tariffs over a ten-year
period and establishes a framework for cooperation in the areas
of foreign investment, customs procedures, tourism, services
trade, dispute resolution and sanitary requirements.
o Since November 1998, Peru has been a member of the Asia-Pacific
Economic Cooperation, which aims to achieve free trade in the
Asia-Pacific region through a progressive reduction in member
countries' tariffs. This organization establishes trade rules in
areas of foreign investments, rules of origin, customs
procedures, technical barriers to trade, unfair trade practices,
promotion of competition, intellectual property and dispute
resolution.
Relations with Ecuador
Peru has had several territorial disputes with Ecuador dating back to
colonial times. A significant military clash occurred in 1941, which came to an
end in 1942 with the signing of the Rio de Janeiro Protocol. This settlement,
sponsored by Argentina, Brazil, Chile and the United States, established
territorial limits between the two nations but failed to delineate clearly the
countries' border in a 78-kilometer section of the Andean foothills. Further
disputes over the border in this region led to additional clashes in 1981 and
1995. In the latest clash, thousands of soldiers from both sides fought an
intense but localized war in the disputed territory of the upper Cenepa valley.
A peace agreement brokered in February 1995 by the four sponsors of the
Rio de Janeiro Protocol led to the cessation of hostilities and established the
Military Observers Mission to Ecuador-Peru to monitor activities in the disputed
zone. In 1996, Peru and Ecuador began a series of meetings that led to the 1998
Brasilia Agreement, which defined the border in the disputed area. The agreed
upon border tracks the peaks of the Cordillera del Condor mountain range. The
1998 Brasilia Agreement granted Ecuador private ownership of a hill known as
Tiwinza, but it was agreed that the hill would remain under Peruvian
sovereignty. In May 1999, a complete demarcation of the border was completed.
The 1998 Brasilia Agreement also established terms of bilateral trade and
navigational understandings between the two nations and created the Bi-National
Commission for Border Integration. This commission led to the launch of a US$3.0
billion regional development program to improve social and economic conditions
along the border.
Peru currently maintains strong political and economic relations with
Ecuador. The two governments have signed further agreements on border
development, navigation, security and trade. On July 30, 1997, Peru reached an
agreement with the other members of the Community of Andean Nations for its full
incorporation into the Community of Andean Nations' Free Trade Area. The
Community of Andean Nations approved a tariff reduction schedule that became
effective on August 1, 1997 and which will end no later than 2005. As part of
this process, Peru and Ecuador signed the Agreement on Acceleration and Further
Development in October 1998 and the corresponding Instrument of Execution in
August 1999, allowing the elimination of tariffs between the two countries on a
variety of exports in 2003.
Subversive Activities
In the 1980s and early 1990s, the Shining Path and Tupac Amaru
conducted indiscriminate bombings and selective assassinations in Peru. From
1980 to 1995, the Republic estimates that the Shining Path's terrorist
activities led to the death of over 30,000 people. The capture in 1992 of the
Shining Path's leader, Abimael Guzman, his subsequent life sentence and the
jailing of most of the organization's central committee, considerably weakened
the Shining Path.
In December 1996, Tupac Amaru assaulted the residence of the Japanese
ambassador to Peru and held 42 hostages for more than four months. In April
1997, Peruvian armed forces stormed the residence, rescued all but one of the
remaining hostages and killed 14 members of the group, including Nestor Cerpa
Cartolini, the group's leader. As a result of that defeat, the group weakened
dramatically and no longer poses a significant terrorist threat.
Between 1996 and 2000, there were several violent incidents in Peru's
jungles, but there is no evidence that these incidents were connected to the
activities of the Shining Path or Tupac Amaru. In 2001, there were a few signs
of terrorist activities. In August 2001, individuals believed to be members of
the Shining Path killed four police officers in the Amazon province of Satipo.
In November 2001, the Ministerio del Interior, or Interior Ministry, announced
that it had thwarted a plan to attack the United States embassy in Lima. In
December 2001, terrorists believed to be members of the Shining Path bombed an
electricity tower 30 miles east of Lima. In response to these possible signs of
terrorist activity, the U.S. State Department issued a public announcement in
December 2001 advising U.S. travelers to Peru and U.S. residents of Peru to
exercise caution when in the country.
In March 2002, three days before a visit to Lima by U.S. President
George W. Bush, a car bomb exploded at a Lima shopping center across the street
from the U.S. Embassy, killing ten persons and wounding 30. Of the three
suspects arrested for the incident, two were members of the Shining Path. In
response to the incident, the U.S. State Department issued another warning
alerting U.S. travelers to Peru of the continued potential for terrorist
activity in Peru.
Although the Shining Path is no longer as powerful as it was during the
1980s and early 1990s, an estimated 300 to 400 members still operate in remote
Upper Huallaga and Apurimac valleys, where military patrols have decreased due
to military spending cutbacks. Shining Path members have formed alliances with
coca farmers and drug traffickers in these drug-growing areas to provide armed
protection against the Government's interdiction efforts. In response to this
activity, security forces in Peru continue to monitor subversive activities and
have maintained their efforts to prevent the resurgence of a significant
terrorist threat, including reactivating anti-terrorist bases in the valleys and
heightening security in Lima. We cannot, however, assure you that there will not
be a resurgence in terrorism of Peru, or that, if there is such a resurgence, it
will not have a material adverse impact on the economy and prospects of the
country.
Anti-Narcotics Efforts
In the 1970s and 1980s, Peru experienced a surge in coca cultivation,
becoming, until the mid-1990s, the world's largest coca producer. Coca
cultivation was initially concentrated in the Upper Huallaga valley but later
expanded to other regions of the country as international demand for cocaine
increased and traffickers and terrorists formed alliances to protect
cultivation.
Beginning in 1970s, the Republic worked to reduce illegal drug
production, traffic and consumption. In 1996, the Government established
Contradrogas, a government agency responsible for designing, coordinating,
planning and supervising the Government's anti-narcotics efforts. This agency is
also responsible for securing and negotiating the terms of financial assistance
from foreign governments and international organizations directed to Peru's
anti-narcotics programs. The agency has collaborated with several countries and
international agencies, including the U.S. Agency for International Development,
or USAID, to implement alternative development programs in the leading
coca-growing areas of the country.
The Government's coca alternative development program, together with
interdiction by the Peruvian air force, eradication of coca fields and
laboratories, seizures of drugs and precursor chemicals, effective prosecution
of drug traffickers and a significant reduction in international demand for
cocaine, have contributed to a significant reduction in drug cultivation and
production in Peru. From 1997 to 2001, there was a reduction of approximately
51% in coca cultivation, from approximately 68,800 hectares under cultivation in
1997 to 34,000 hectares by the end of 2001.
During 2001, however, evidence of an increase in the production of coca
and poppies, the source of heroin, has emerged. Peru's coca crop remained
stable, covering 34,000 hectares, a similar figure to that for 2000, despite the
eradication of 6000 hectares in 2001. In addition, 135 hectares of poppies, the
source of heroin, were eradicated in 2001, up from 26 hectares in 2000.
Estimates of the poppy crop are sketchy as poppies grow at high altitudes, above
the ceiling of police helicopters.
The increase is attributable to a shift in production from Colombia to
Peru as Colombia's government has stepped up the eradication of drug crops and
the price of suitable substitute crops for Peruvian farmers, such as coffee,
have dropped below the cost of production. U.S. officials have acknowledged the
affect on Peru of Colombia's stepped-up drug eradication efforts and tripled
anti-drug aid for Peru in 2002 to US$156 million. In June 2002, however, the
Government agreed to suspend coca eradication programs in the Huallaga River
valley and in August 2002 agreed to ease eradication operations in the
Ene-Apurimac river basin in response to protests by coca farmers, claiming that
private organizations that run anti-coca programs absorb aid money provided by
USAID and poor coca farmers see little benefit. The Huallaga region and the
Ene-Apurimac river basin accounted for nearly 65% of Peru's coca cultivation in
2001.
To prevent money laundering in connection with drug trafficking and
other activities, the Republic requires financial institutions to conduct
employee training in preventive methods, obtain basic knowledge about their
clients and adhere to a code of conduct.
THE ECONOMY
History and Background
Between 1930 and the mid-1960s, Peru had one of the most successful
economies in Latin America. During this time, Peru generally deviated from the
import substitution model adopted by other countries in the region. Peru
adhered, except for brief intervening periods, to laissez-faire,
non-interventionist economic policies. The Government encouraged foreign
investment through tax incentives and legislation guaranteeing equal treatment
of foreign and domestic investors. Aided by its main exports, consisting of fish
and fish products, copper, petroleum and agricultural products, Peru's economy
grew steadily during this period.
Beginning in the mid-1960s, the Peruvian economy sustained a series of
setbacks. Public sentiment began to turn resolutely against foreign investment.
Pressure for change in economic policies increased as a result of:
o class and social conflicts, characterized by populist resentment
against the small economic elite that ruled the country and against
the presence of foreign companies in industries related to Peru's
national resources, such as petroleum and mining, and in other
prominent sectors of the economy;
o an economic slowdown brought about by a reduction in production and
exports due principally to a sudden drop in fish catch and reduced
mining and metal processing following the exhaustion of a number of
the principal copper and other mines; and
o the increased cost of living brought about by higher domestic food
prices.
In 1968, the military government headed by General Juan Velasco
Alvarado nationalized numerous private enterprises and conducted a campaign
against foreign participation in the Peruvian economy. In 1969, the Velasco
administration enacted the Ley de Reforma Agraria, or Agrarian Reform Law, which
took away large estates from wealthy owners and turned them into cooperatives
run by the former workers of the estates, and adopted high tariffs in order to
shield local industry and manufacturing from foreign competition.
Peru's currency became overvalued, making exports less competitive, and
its debt grew sharply during the 1970s. Peru experienced large current account
deficits and the Velasco administration borrowed abroad to finance these
deficits rather than change its policies. Many cooperative farms, operated by
people with little management experience, went bankrupt and agricultural
production suffered.
In 1975, General Francisco Morales-Bermudez Cerruti implemented an
economic austerity program designed to correct the economic disequilibrium
reflected in the country's fiscal and current account deficits and its high
external debt burden. The Government implemented fiscal and monetary restraints
and devalued the currency. These measures coincided with increases in world
prices of Peru's main exports. The fiscal deficit narrowed and by 1979 Peru had
achieved a significant current account surplus.
In 1980, the civilian government led by Fernando Belaunde reinstituted
high spending and borrowing but was forced to adopt more restrained spending
policies in later years. Alan Garcia Perez, who assumed the presidency in 1985,
brought the country to a deepening economic crisis. Garcia increased spending,
declared a debt moratorium and attempted to nationalize the banking system and
other key industries. Private investment collapsed, the public sector deficit
increased and exports dwindled. By 1990, the inflation rate had increased to
7,650%, net international reserves had been completely depleted and the economy
had entered its third year of recession. The Garcia administration was also
beset by the terrorist activities of the Shining Path and Tupac Amaru.
In 1990, Alberto Fujimori, a university professor, won the presidential
election on a campaign platform that emphasized his "outsider" status and his
opposition to "traditional" politicians. Fujimori inherited an economy beset by
recession, hyperinflation and high levels of external debt. Fujimori immediately
moved to cut public spending, increase taxes, tame inflation and open domestic
markets to foreign investment.
Within the first few years of his presidency, Fujimori dismantled
protectionist and interventionist laws and policies to create a liberal economy
dominated by private sector and market forces. In order to encourage foreign
investment, the Fujimori administration undertook an ambitious privatization
program, strengthened and simplified the country's tax system, opened the
country to foreign investment and lifted exchange controls and restrictions on
remittances of profits, dividends and royalties. While the Fujimori
administration succeeded in privatizing many state entities, the privatization
program waned in the later years of the administration because of adverse market
conditions and the President's adoption of a more populist stance prior to the
2000 elections.
As time went on, Fujimori's administration became increasingly
authoritarian, as evidenced by his dissolution of Congress in 1992, his
consolidation of power in the hands of the presidency following adoption of the
1993 Constitution and his allegiance with Vladimiro Montesinos. Fujimori's
authoritarianism exacted a price on Peru's political system and undermined the
success of his economic program. The Fujimori administration eventually failed
to redistribute the benefits of economic growth to the poor and, in the last
years of the administration, provoked civil unrest and political instability,
which deterred foreign investors.
On November 20, 2000, President Fujimori resigned his post and Valentin
Paniagua assumed the presidency on a provisional basis. The Paniagua
administration adopted fiscal policies to reduce spending, restore confidence,
reform the tax system and otherwise stabilize the economy.
In June 2001, the Peruvian people elected Alejandro Toledo Manrique to
the presidency based on a platform that rejected Fujimori's legacy of political
coercion and financial misdealings, but still recognized the value of an open
economic system. President Toledo vowed to restore democracy, fiscal discipline
and transparency to the government, while increasing the living standards of the
poor and disadvantaged, who constitute a majority of the population, through
improvements in education, health and employment opportunities. He also promised
to continue the economic reforms and privatization program first advanced by the
Fujimori administration.
Toledo assumed the presidency in July 2001 against a backdrop of high
unemployment and underemployment, economic recession and social need more severe
than had been acknowledged by the Fujimori administration. Despite the economic
strides achieved between 1990 and 2000, poverty remains a persistent problem in
Peru, with more than half of the population living below the poverty line, which
the World Bank defines as a monthly income of less than US$60 per capita,
adjusted to reflect differences in purchasing power. A significant number of
Peruvians live on an income of less than US$30 per capita per month.
President Toledo implemented a number of proposals to stimulate the
Republic's economy, including privatization and fiscal austerity programs.
Toledo's policies spurred moderate economic growth in the fourth quarter of 2001
and the first quarter of 2002. Despite this economic growth, the Toledo
administration faced social protests and unrest spurred by disappointment that
the President's policies had not immediately led to a significant reduction in
the high rates of underemployment, unemployment and poverty.
In an effort to maintain his political alliances and quell public
unrest, Toledo changed his cabinet. At the beginning of July 2002, several
ministers viewed as proponents of neo-liberal economic policies resigned their
posts, including Prime Minister Roberto Danino and Finance Minister Pedro Pablo
Kuczynski whose pro-private investment policies had angered many Peruvians. On
July 12, President Toledo swore in a new cabinet.
Developments from 1997 to 2001
Introduction
During the period from 1997 to 2001, Peru experienced intermittent
periods of economic growth and contraction. The economy continued to grow
strongly in 1997, but contracted slightly in 1998. The economy rebounded,
growing slightly in 1999 and moderately in 2000, but stagnated in 2001. Set out
below is a discussion of the trends and events affecting economic results during
the period.
1997
GDP growth in 1997 was spurred by the Fujimori administration's
strategy of macroeconomic adjustment and structural reform. The main aspects of
this strategy were:
o lowering inflation;
o improving fiscal results through the strengthening of tax
administration and conservative fiscal expenditure policies;
o narrowing the current account deficit;
o managing the exchange rate system consistent with the Government's
inflation and balance of payments objectives; and
o deepening structural reforms, including through privatization, reform
of the pension system and trade liberalization.
Real GDP grew by 6.7% in 1997, reflecting increases in private and
public sector investment, exports and consumer confidence. Foreign investment
grew during this period as a result of privatization and capital investment.
Inflation fell to 8.5%, the lowest level Peru had achieved during the preceding
25 years. The net international reserves of the Central Bank increased 19.2% in
1997 to US$10.2 billion. Peru also successfully completed a debt and
debt-service reduction package with its commercial creditors in 1997.
1998 and 1999
In 1998 and 1999, the Peruvian economy suffered a sharp reversal. This
downturn in economic activity reflected the occurrence of several external
shocks, including:
o The Asian crisis, which began at the end of 1997 after several Asian
countries encountered severe economic problems and were forced to
devalue their currencies and, in some instances, default on their
debt. Foreign investors retreated from investing in emerging markets
as a whole, including Latin American markets, such as Peru, that were
located far from the locus of the crisis.
o The Russian crisis in late 1997 and 1998, which arose when Russia
devalued its currency and defaulted on its debt. This crisis
exacerbated the lack of investor confidence in emerging markets
provoked by the Asian crisis.
o El Nino in 1998, which had an adverse impact on the agriculture and
fishing industries in Peru.
o The devaluation of the Brazilian real in 1999 after Brazil encountered
economic problems and the consequent regional contagion affecting
Argentina and other neighboring countries.
In addition, a decrease in fishing, agricultural production and
commodity prices led to a decrease in exports. The Fujimori administration's
tight monetary and fiscal policies exacerbated these economic problems. GDP
stagnated, contracting 0.5% in 1998 and growing 0.9% in 1999. The stagnation in
the economy during these years depressed the banking sector and led to a credit
crunch and increasing bad loan portfolios. Nonetheless, the presence of foreign
banks in the system, strict provisioning requirements and a federal program to
facilitate commercial debt restructuring helped the banking system endure the
stagnation more successfully than did other banks in the region during the same
period.
2000
During 2000, GDP grew 3.1%, spurred by growth of 5.5% during the first
half of 2000, which shrunk to 0.9% during the second half of 2000, as compared
to the corresponding periods in 1999. The growth in the first half of the year
resulted from increased government spending and investment reflecting the
Fujimori administration's turn to more populist economic measures to gain public
support for Fujimori's third presidential bid. Economic growth stagnated
following Fujimori's controversial election to a third term in May 2000,
primarily as a result of the political controversy that led to Fujimori's
resignation in November 2000 and cutbacks in government spending in an attempt
to balance the Republic's fiscal accounts.
The fiscal deficit expanded in 2000 due to lower-than-expected tax
receipts and an increase in expenditures. Bank credit declined and bank loan
quality continued to deteriorate. The current account deficit totaled US$1.6
billion by the end of 2000, representing 2.9% of GDP.
The pace of the Government's privatization program slowed during the
years prior to the 2000 election, even as privatization proceeds could have
helped bridge the current and fiscal account deficits. This was due to
Fujimori's turn toward more populist policies ahead of the 2000 election and to
poor market conditions.
2001
Despite the Government's efforts to stabilize the economy following
Fujimori's resignation in November 2000, the economy grew only 0.2% during 2001.
This nearly flat growth was primarily due to a reduction in public spending, as
the Government sought to stabilize the Republic's fiscal accounts following
Fujimori's spending increase leading to the 2000 elections. Uncertainty during
the first half of 2001 over the outcome of the elections scheduled for April
2001 and the lack of investor confidence and private investment in the Latin
American region also contributed to the economic downturn during this period.
The following are the economic results for 2001:
o the consolidated public sector fiscal deficit was 2.5% of GDP, as
compared to 3.2% in 2000;
o the average inflation rate for 2001 was 2.0%, as compared to 3.8%
for 2000;
o the net international reserves of the Central Bank increased 5.3%
to US$8.6 billion, as compared to US$8.2 billion as of December
31, 2000; and
o the current account deficit decreased 30.2% to US$1.1 billion, as
compared to a US$1.6 billion current account deficit for 2000.
First Three Months of 2002
During the first three months of 2002, the economy grew an estimated
2.8% compared to the first three months of 2001, during which Peru was
experiencing a recession. This growth resulted from improvements in a few narrow
sectors, primarily mining, as production from Antamina, the world's largest
copper and zinc mining project, increased and construction and other sectors
benefiting from increased public building projects. Mining accounted for more
than a third of GDP growth in the first three months of 2002, despite its
relatively small contribution to GDP.
The current account deficit during the first three months of 2002
decreased 29.7% to a deficit of US$343 million, as compared to a current account
deficit of US$488 million for the first three months of 2001. This reduction was
largely a result of a reduced trade balance. Additionally, inflation at the end
of the period was 0.54%.
Argentine Crisis and Developments in Brazil and Venezuela
Argentina is experiencing a severe economic crisis as well as political
and social unrest. In December 2001 the crisis led to Argentina declaring a
moratorium on its payments under its public external indebtedness. Brazil has
recently experienced economic difficulties in the months leading up to the
election of Luiz Inacio Lula, of the Workers' Party, as President of Brazil on
October 27, 2002, and Brazilian markets continue to be volatile. Venezuela is
experiencing political and social unrest, including labor strikes, regular, and
sometimes violent, protests and an aborted takeover of the Chavez government in
April 2002. While the Brazilian and Venezuelan difficulties are limited in
comparison to Argentina's profound economic and social crisis, in each case
negative investor reaction to developments in those countries could adversely
affect the market for securities issued by countries in the region, cause
foreign investors to decrease the flow of capital into Latin America and cause
uncertainty about plans for further integration of regional economies, all of
which could potentially affect Peru.
The Economic Policies of the Toledo Administration
Upon taking office in July 2001, the Toledo administration faced
continuing economic weakness that was more severe than had been acknowledged by
the Fujimori administration.
The Toledo administration's focus on improving social conditions
created high expectations among Peru's lower classes that improvement would
result quickly. President Toledo's policies led to moderate economic growth in
the fourth quarter of 2001 and the first quarter of 2002. Despite this economic
growth, the Toledo administration faced social protests and unrest spurred by
disappointment that a significant reduction in the high rates of
underemployment, unemployment and poverty was not immediate. In response, Toledo
replaced six ministers who had most favored neo-liberal economic policies,
including the Prime Minister and the Finance Minister, whose pro-private
investment policies caused the Toledo administration to lose popular support.
Despite public opposition to the Toledo administration's neo-liberal
economic policies, the Toledo administration established and continues to
support the following priorities:
o achieving and sustaining economic growth;
o increasing exports of Peruvian goods;
o reducing unemployment, underemployment and poverty;
o reforming the tax system, primarily by improving tax collection
mechanisms;
o fostering private investment by reinvigorating structural reforms
and promoting investment through concessions, joint ventures and
other similar business forms;
o increasing public investment in education, public health, job
training, low-income housing and other social programs, while
reducing overall public spending;
o maintaining low inflation and a floating exchange rate system;
o improving the efficiency of the pension system by fostering
participation in the private pension system;
o stimulating growth in private sector credit by enhancing
creditors' rights;
o reducing public sector debt;
o improving oversight of the financial system and adopting
transparency guidelines and requirements in regulated sectors of
the economy;
o improving the efficiency of the public sector; and
o maintaining open trade policies.
These priorities are the basis for various projects and initiatives
that the Toledo administration has pursued since assuming office. These projects
and initiatives include the following:
o adopting a private investment promotional program for 2002;
o submitting a 2002 budget, approved by Congress in November 2001,
that projected a fiscal deficit of 2.2% of GDP, as compared to
the 2.4% of GDP for 2001;
o increasing the corporate income tax rate from 20% to 27%;
o reducing the payroll tax, known as the Extraordinary Solidarity
Tax, from 5% to 2%;
o initiating a temporary-jobs placement program in impoverished
areas of the country;
o increasing public sector wages 9%;
o creating an agrarian bank to provide the agricultural sector with
greater access to credit;
o transforming Mivivienda, a public development fund offering
subsidized mortgages, into a mortgage securitization agency, with
the goal of increasing mortgage lending and addressing the
scarcity of affordable low-income housing; and
o securing a commitment from donor nations to provide the Republic
with US$1.8 billion for social and economic development programs.
The Toledo administration's key economic targets for 2002, as revised,
included:
o GDP growth of 3.5% to 4.0%;
o a consolidated public sector deficit of 2.3% of GDP;
o net international reserves of the Central Bank of approximately
US$9.3 billion by the end of 2002;
o a current account deficit of 2.3% of GDP; and
o 2.5% inflation.
The initial targets were reflected in a letter of intent that the
Republic negotiated in January 2002 with the IMF. The Republic negotiated with
the IMF targets which would yield a fiscal deficit of 2.3% of GDP for 2002 and
1.9% of GDP for 2003. For a description of the letter of intent, see "Public
Sector Debt--External Debt" below.
Gross Domestic Product and Structure of the Economy
During the period from 1997 to 2001, private consumption and gross
investment were highest in 1997 and have declined since that time. Private
consumption fluctuated from 1998 to 2001, while gross investment gradually
decreased over the same period. The overall decrease in private consumption and
gross investment after 1997 reflected a decrease in the confidence of foreign
investors and Peruvian consumers. Modest increases in government consumption and
in exports throughout the period partially offset the declines in private
consumption and private investment. The increase in government consumption was
spurred by the adoption of more populist measures by the Fujimori administration
in the later years of the administration and higher spending prior to the 2000
elections. The increase in exports after 1997 reflected recuperating export
commodity prices and a rebound from the adverse effects of El Nino on
agricultural and fishing exports.
During 2001, private consumption increased, as consumers did not adjust
their spending to the downturn in economic activity. Gross investment decreased
as a result of capital flight during the first part of the year when the
uncertainty of the April 2001 elections deterred capital investment. Exports
decreased slightly during this period due to a decrease in the provision of
services resulting principally from a reduction in revenues generated in the
travel, transportation, insurance and reinsurance sectors, as well as greater
austerity in non-financial public sector spending.
For the three-month period ending March 31, 2002, private consumption
increased as compared to the same period in 2001, due to increased imports of
non-durable consumer goods and greater sales of agricultural products, food and
drinks. Gross investment decreased during this period because of hesitance by
investors to enter into the Peruvian market and Latin American markets
generally. Exports decreased during this period as compared to the first three
months of 2001, due to a decrease in sales of certain non-traditional products.
The following tables set forth GDP by expenditure for the periods
indicated.
Gross Domestic Product by Expenditure
(in millions of U.S. dollars, at current prices)
For the first 3
months of:
--------------------
1997 1998 1999(1) 2000(1) 2001(1) 2001(1) 2002(1)
--------- --------- --------- --------- --------- --------- ---------
Government consumption............ US$ 5,797 US$ 6,004 US$ 5,626 US$ 5,979 US$ 6,035 US$ 1,342 US$ 1,401
Private consumption................. 41,521 40,542 36,109 37,774 38,841 9,339 9,938
Gross investment:
Public sector..................... 2,584 2,551 2,494 2,119 1,743 341 328
Private sector.................... 11,442 10,833 8,687 8,649 8,160 2,071 1,939
Change in inventories........... 126 31 (90) (8) 39 (5) (13)
--------- --------- --------- --------- --------- --------- ---------
Total gross investment.......... 14,152 13,415 11,092 10,761 9,942 2,408 2,254
Exports of goods and services....... 8,337 7,545 7,640 8,553 8,544 2,001 1,923
Imports of goods and services....... 10,937 10,599 8,838 9,555 9,337 2,405 2,156
--------- --------- --------- --------- --------- --------- ---------
Net (exports) imports............. (2,600) (3,054) (1,197) (1,002) (793) (403) (233)
--------- --------- --------- --------- --------- --------- ---------
GDP................................US$58,870 US$56,907 US$51,630 US$53,512 US$54,025 US$12,686 US$13,359
========= ========= ========= ========= ========= ========= =========
(1) Preliminary data.
Source: Central Bank.
Gross Domestic Product by Expenditure
(in millions of nuevos soles, at constant 1994 prices)
For the first 3
months of:
---------------------
1997 1998 1999(1) 2000(1) 2001(1) 2001(1) 2002(1)
---------- ---------- --------- ---------- ---------- ---------- ----------
Government consumption............S/. 10,565 S/.10,832 S/. 11,210 S/. 11,784 S/. 11,729 S/. 2,617 S/. 2,713
Private consumption............... 84,081 83,376 83,055 86,288 87,425 21,705 22,234
Gross investment:
Public sector................... 5,124 5,276 5,657 4,788 3,879 765 730
Private sector.................. 23,395 22,834 19,330 18,944 17,877 4,541 4,281
Change in inventories........... 306 145 (532) (178) (93) (15) (40)
---------- ---------- --------- ---------- ---------- ---------- ----------
Total gross investment........ 28,825 28,255 24,455 23,554 21,663 5,291 4,971
Exports of goods and services..... 16,362 17,274 18,594 20,069 21,453 4,700 4,955
Imports of goods and services..... 22,723 23,251 19,724 20,428 20,757 5,219 4,909
---------- ---------- --------- ---------- ---------- ---------- ----------
Net (exports) imports........... (6,362) (5,977) (1,130) (359) 696 (519) 45
---------- ---------- --------- ---------- ---------- ---------- ----------
Real GDP..........................S/.117,110 S/.116,485 S/.117,590 S/.121,267 S/.121,513 S/. 29,093 S/. 29,963
========== ========== ========= ========== ========== ========== ==========
(1) Preliminary data.
Source: Central Bank.
Gross Domestic Product by Expenditure
(as a percentage of total GDP, at current prices)
For the first 3
months of:
---------------------
1997 1998 1999(1) 2000(1) 2001(1) 2001(1) 2002(1)
---------- ---------- --------- ---------- ---------- ---------- ----------
Government consumption........... 9.8% 10.6% 10.9% 11.2% 11.2% 10.6% 10.5%
Private consumption.............. 70.5 71.2 69.9 70.6 71.9 73.6 74.4
Gross investment:
Public sector.................. 4.4 4.5 4.8 4.0 3.2 2.7 2.5
Private sector................. 19.4 19.0 16.8 16.2 15.1 16.3 14.5
Change in inventories.......... 0.2 0.1 (0.2) 0.0 0.1 0.0 (0.1)
---------- ---------- --------- ---------- ---------- ---------- ----------
Total gross investment....... 24.0 23.6 21.5 20.1 18.4 19.0 16.9
Exports of goods and services.... 14.2 13.3 14.8 16.0 15.8 15.8 14.4
Imports of goods and services.... 18.6 18.6 17.1 17.9 17.3 19.0 16.1
---------- ---------- --------- ---------- ---------- ---------- ----------
Net (exports) imports.......... (4.4) (5.4) (2.3) (1.9) (1.5) (3.2) (1.7)
---------- ---------- --------- ---------- ---------- ---------- ----------
GDP.............................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========== ========== ========= ========== ========== ========== ==========
(1) Preliminary data.
Source: Central Bank.
Gross Domestic Product by Expenditure
(percentage change from previous year, at constant 1994 prices)
For the first 3
months of:
---------------------
1997 1998 1999(1) 2000(1) 2001(1) 2001(1) 2002(1)
---------- ---------- --------- ---------- ---------- ---------- ----------
Government consumption........... 7.6% 2.5% 3.5% 5.1% (0.5)% 2.0% 2.4%
Private consumption.............. 4.3 (0.8) (0.4) 3.9 1.3 (6.9) 3.7
Gross investment:
Public sector.................. 10.9 3.0 7.2 (15.4) (19.0) (31.9) (4.5)
Private sector................. 16.3 (2.4) (15.3) (2.0) (5.6) (6.4) (5.7)
Change in inventories.......... N/A (52.6) (466.9) 66.5 47.8 N/A (166.7)
---------- ---------- --------- ---------- ---------- ---------- ----------
Total gross investment....... 14.9 (2.0) (13.4) (3.7) (8.0) (12.2) (6.0)
Exports of goods and services.... 13.1 5.6 7.6 7.9 6.9 1.8 5.4
Imports of goods and services.... 12.2 2.3 (15.2) 3.6 1.6 6.4 (5.9)
---------- ---------- --------- ---------- ---------- ---------- ----------
Net (exports) imports.......... (9.8) 6.0 81.1 68.2 294.0 (82.0) 108.7
---------- ---------- --------- ---------- ---------- ---------- ----------
Real GDP......................... 6.7 (0.5) 0.9 3.1 0.2 (2.4) 3.0
========== ========== ========= ========== ========== ========== ==========
(1) Preliminary data.
N/A = Not Available.
Source: Central Bank.
From 1997 to 2001, Peru experienced a 26.8% increase in private
savings, which was partially offset by a 79.5% decrease in public savings.
Private savings increased in large part as a result of decreased private
consumption after 1997, reflecting the weakening confidence in the Peruvian
economy. Public savings decreased, particularly in 1999 and 2000, because of
increased government expenditures by the Fujimori administration to gain
political support. Government petroleum subsidies in 1999 and 2000, when world
oil prices rose significantly, also caused a decrease in public savings.
Domestic investment decreased 19.3% between 1997 and 2001.
During 2001, private savings as a percentage of GDP declined 4.9%, as
compared to 2000, reflecting an increase in private consumption. In 2001, public
savings did not change, as compared to 2000, as a result of cutbacks in
government expenditures following Fujimori's election in July 2000 and his
subsequent resignation in November 2000. Domestic investment decreased 8.5%
during this period due primarily to political uncertainty ahead of the April
2001 elections.
During the first three months of 2002, private savings increased 15.9%,
as compared to the same period of 2001, as a result of renewed focus on savings
rather than on consumption. Public savings decreased 69.7%, as compared to the
same period of 2001, as a result of a decrease in the current revenue of the
central Government. Domestic investment decreased 6.2% during this period due
primarily to a substantial decrease in private investment.
Investment and Savings
(as a percentage of current GDP)
For the first
3 months of:
--------------------
1997 1998 1999(1) 2000(1) 2001(1) 2001(1) 2002(1)
---------- ---------- --------- ---------- ---------- ---------- ---------
Domestic savings:
Public savings................ 5.2% 3.9% 1.8% 0.8% 0.8% 3.3% 1.0%
Private savings............... 13.0 13.8 16.8 16.4 15.6 13.8 16.0
---------- ---------- --------- ---------- ---------- ---------- ---------
Total domestic savings...... 18.2 17.7 18.6 17.2 16.4 17.1 17.0
External savings................ 5.8 5.9 2.9 2.9 2.0 3.8 2.6
---------- ---------- --------- ---------- ---------- ---------- ---------
Total savings......... 24.0% 23.6% 21.5% 20.1% 18.4% 20.9 19.6
Domestic investment............. 24.0% 23.6% 21.5% 20.1% 18.4% 20.9% 19.6%
========== ========== ========= ========== ========== ========== =========
(1) Preliminary data.
Source: Central Bank.
As the table below indicates, from 1997 to 1999, the real standard of
living of the population fell, with an average decline of 15.3% in per capita
GDP, reflecting the overall economic instability. In 2000, per capita GDP rose
1.9% as economic growth was restored by increased government expenditures. In
2001, per capita GDP fell by 0.7% due to population growth that exceeded the
flat growth in GDP.
Per Capita GDP(1) and Per Capita Income(2)
(in U.S. dollars, at current prices)
For the first 3
months of:
--------------------
1997 1998(3) 1999(1)(3) 2000(1)(3) 2001(1)(3) 2001(3) 2002(3)
Per capita GDP............. US$2,416 US$2,295 US$2,046 US$2,085 US$2,071 US$1,945 US$2,015
---------- ---------- --------- ---------- ---------- ---------- ---------
Per capita income.......... 2,411 2,231 1,951 1,984 1,962 1,874 1,913
(1) Without adjustment to reflect changes in purchasing power.
(2) Per capita national disposable income, which is equal to national gross GDP
plus net investment and financial income from abroad plus foreign
remittances, divided by the country's population.
(3) Preliminary data. Source: Central Bank.
Principal Sectors of the Economy
The principal economic activities in Peru are services, including
wholesale and retail trade, transportation and tourism, manufacturing, and
agriculture, fishing and livestock. The following tables set forth the
distribution of GDP in the Peruvian economy, indicating for each sector its
percentage contribution to GDP and its annual growth rate for the years
indicated, in each case as compared to the previous year.
Gross Domestic Product by Sector
(in millions of nuevos soles, at constant 1994 prices)
For the first 3
months of:
--------------------
1997 1998 1999(1) 2000(1) 2001(1) 2001(1) 2002(1)
---------- ---------- ---------- ----------- ---------- ---------- ---------
Primary production:
Agriculture and livestock(2).. S/. 9,099 S/. 9,240 S/.10,325 S/.10,968 S/.10,892 S/. 2,432 S/. 2,612
Fishing....................... 574 497 642 700 598 158 123
Mining and hydrocarbons(3).... 5,501 5,708 6,445 6,600 7,337 1,581 1,956
---------- ---------- ---------- ----------- ---------- ---------- ---------
Total primary production.... 15,174 15,445 17,412 18,269 18,828 4,171 4,691
Secondary production:
Manufacturing................. 17,758 17,188 17,095 18,241 18,045 4,397 4,364
Construction.................. 7,245 7,289 6,521 6,244 5,867 1,392 1,536
Electricity and water......... 2,237 2,423 2,485 2,600 2,699 662 701
---------- ---------- ---------- ----------- ---------- ---------- ---------
Total secondary production.. 27,240 26,900 26,100 27,085 26,612 6,451 6,602
Services:
Commerce...................... 17,352 16,797 16,482 17,322 17,313 4,137 4,132
Other services................ 57,344 57,344 57,596 58,591 58,761 14,334 14,538
---------- ---------- ---------- ----------- ---------- ---------- ---------
Total services.............. 74,696 74,140 74,077 75,913 76,074 18,471 18,670
---------- ---------- ---------- ----------- ---------- ---------- ---------
Total GDP................. S/.117,110 S/.116,485 S/.117,590 S/.121,267 S/.121,513 S/.29,093 S/.29,963
========== ========== ========== =========== ========== ========== =========
(1) Preliminary data.
(2) Includes forestry.
(3) Includes non-metallic mining.
Source: Central Bank.
Gross Domestic Product by Sector
(as a percentage of GDP, at constant 1994 prices)
For the first 3
months of:
--------------------
1997 1998 1999(1) 2000(1) 2001(1) 2001(1) 2002(1)
---------- ---------- ---------- --------- --------- --------- --------
Primary production:
Agriculture and livestock(2).. 7.8% 7.9% 8.8% 9.0% 9.0% 8.4% 8.7%
Fishing....................... 0.5 0.4 0.5 0.6 0.5 0.5 0.4
Mining and hydrocarbons(3).... 4.7 4.9 5.5 5.4 6.0 5.4 6.5
---------- ---------- ---------- --------- --------- --------- --------
Total primary production.... 13.0 13.3 14.8 15.1 15.5 14.3 15.7
Secondary production:
Manufacturing................. 15.2 14.8 14.5 15.0 14.9 15.1 14.6
Construction.................. 6.2 6.3 5.5 5.1 4.8 4.8 5.1
Electricity and water......... 1.9 2.1 2.1 2.1 2.2 2.3 2.3
---------- ---------- ---------- --------- --------- --------- --------
Total secondary production.. 23.3 23.1 22.2 22.3 21.9 22.2 22.0
Services:
Commerce...................... 14.8 14.4 14.0 14.3 14.2 14.2 13.8
Other services................ 49.0 49.2 49.0 48.3 48.4 49.3 48.5
---------- ---------- ---------- --------- --------- --------- --------
Total services.............. 63.8 63.6 63.0 62.6 62.6 63.5 62.3
---------- ---------- ---------- --------- --------- --------- --------
Total GDP................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========== ========== ========== ========= ========= ========= ========
(1) Preliminary data.
(2) Includes forestry.
(3) Includes non-metallic mining.
Source: Central Bank.
Gross Domestic Product by Sector
(percentage change from previous year, at constant 1994 prices)
For the first 3
months of:
--------- --------- ------- -------- ------- -------------------
1997 1998(1) 1999(1) 2000(1) 2001(1) 2001(2) 2002(3)
--------- --------- ------- -------- ------- --------- -------
Primary production:
Agriculture and livestock(2).. 5.4% 1.5% 11.7% 6.2% (0.6)% (1.7)% 7.4%
Fishing...................... (1.8) (13.4) 29.2 9.1 (13.3) (6.6) (22.0)
Mining and hydrocarbons(3)... 9.0 3.8 12.9 2.4 11.2 (3.5) 23.7
-------- -------- ------- ------- ------- -------- -------
Total primary production... 6.4 1.8 12.7 4.9 1.9 (3.2) 9.4
Secondary production:
Manufacturing............... 5.3 (3.2) (0.5) 6.7 (1.1) (3.2) (0.8)
Construction................ 14.9 0.6 (10.5) (4.3) (6.0) (15.7) 10.3
Electricity and water....... 12.7 8.3 2.5 4.7 3.8 2.3 6.1
-------- -------- ------- ------- ------- -------- -------
Total secondary production. 8.3 (1.2) (3.0) 3.8 (0.2) (2.2) (0.2)
Services:
Wholesale and retail trade.. 7.8 (3.2) (1.9) 5.1 0.0 (0.2) (0.1)
Other services.............. 6.5 0.1 (0.7) 0.9 N/A N/A N/A
-------- -------- ------- ------- ------- -------- -------
Total services............ 6.3 (0.7) (0.1) 2.5 0.7(4) (1.1) (4) 1.4(4)
Total GDP.............. 6.7 (0.5) 0.9 3.1 0.2 (2.4) 3.0
======== ======== ======= ======= ======= ======== =======
(1) Preliminary data.
(2) Preliminary data - First quarter 2001.
(3) Preliminary data - First quarter 2002.
(4) Excludes trading.
N/A = Not Available.
Source: INEI and Central Bank.
Primary Production
Primary production in Peru encompasses agriculture, livestock and
forestry, fishing, and mining and the extraction of hydrocarbons. Of these, the
most important activities in terms of their contribution to GDP are agriculture
and livestock, which, together with forestry, accounted for 9.0% of GDP in 2000
and 9.0% in 2001. In total, the primary sector contributed 15.1% to GDP in 2000
and 15.5% in 2001. The sector experienced its highest growth rate of the
1997-2001 period in 1999, when it grew 12.7% primarily due to the recovery of
the fishing and agricultural sectors following El Nino.
The following table sets forth the production of selected primary goods
for the years indicated.
Selected Primary Goods Production
(in millions of nuevos soles, at constant 1994 prices)
For the first 3
months of:
----------------------
1997 1998 1999 2000 2001 2001 2002
----------- ---------- ---------- ---------- ---------- ---------- ----------
Agriculture:
Cotton.................. S/. 233.5 S/. 152.5 S/. 216.1 S/. 246.2 S/. 214.6 S/. 59.9 S/. 73.5
Rice.................... 525.3 557.3 703.5 680.9 730.0 125.6 162.1
Coffee.................. 361.7 384.2 464.2 507.1 512.4 28.2 35.9
Sugar cane.............. 470.8 387.6 426.5 484.7 501.7 109.1 129.4
Corn.................... 503.0 577.0 651.0 742.0 766.0 162.1 166.2
Potato.................. 967.5 1,044.7 1,237.1 1,320.9 1,081.3 202.4 293.6
Wheat................... 132.0 158.0 171.0 187.0 175.5 0.4 1.0
Vegetables.............. 745.7 726.2 821.9 896.8 913.0 237.8 175.9
Fruits.................. 1,031.9 963.0 1,076.2 1,126.5 1,112.8 297.3 312.8
Tubers.................. 371.0 413.0 420.0 429.0 424.0 96.0 97.2
Other agricultural...... 1,932.0 1,915.3 2,034.7 2,121.4 2,116.2 479.3 506.6
----------- ---------- ---------- ---------- ---------- ---------- ----------
Total crops........... S/.7,274.4 S/.7,278.8 S/.8,222.2 S/.8,742.5 S/.8,547.5 S/.1,798.1 S/.1,954.2
=========== ========== ========== ========== ========== ========== ==========
Livestock:
Poultry................. S/.2,203.0 S/.2,433.4 S/.2,747.7 S/.3,026.4 S/.3,087.6 S/. 740.1 S/. 820.8
Eggs.................... 313.7 324.4 338.7 340.8 341.9 82.7 83.8
Milk.................... 480.6 506.0 513.7 541.0 565.3 144.7 150.5
Lamb.................... 262.3 275.5 363.4 378.3 387.1 85.2 90.0
Pork.................... 399.6 418.3 428.6 436.8 438.0 101.6 101.2
Beef.................... 1,025.3 1,074.4 1,158.1 1,181.6 1,195.1 283.2 288.8
Other................... 371.4 391.7 412.2 430.2 430.7 134.2 129.6
----------- ---------- ---------- ---------- ---------- ---------- ----------
Total livestock....... S/.5,055.9 S./5,423.7 S/.5,962.4 S/.6,335.1 S/.6,445.7 S/.1,571.7 S/.1,664.9
=========== ========== ========== ========== ========== ========== ==========
Fishing................... S/. 573.7 S/. 497.0 S/. 641.9 S/. 700.1 S/. 607.0 S/. 158.3 S/. 126.4
Source: INEI.
The following table sets forth the annual percentage change in
production of selected primary goods for the years indicated, based on constant
1994 prices.
Selected Primary Goods Production
(percentage change from previous year, at constant 1994 prices)
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Agriculture:
Cotton................... (45.7)% (34.7)% 41.7% 13.9% (13.0)%
Rice..................... 21.3 6.1 26.2 (3.2) 7.2
Coffee................... 6.0 6.2 20.8 9.2 1.0
Sugar cane............... 13.3 (17.7) 10.0 13.6 3.5
Corn..................... 2.2 14.7 12.8 14.0 3.2
Potato................... 3.9 8.0 18.4 6.8 (18.2)
Wheat.................... (8.3) 19.7 8.2 9.4 (6.1)
Vegetables............... 5.4 (2.6) 13.2 9.1 1.8
Fruits................... 2.4 (6.7) 11.8 4.7 (1.3)
Tubers................... 13.5 11.3 1.7 2.1 (1.2)
Other agricultural....... 4.7 (0.9) 6.2 4.3 (0.3)
Livestock:
Poultry.................. 8.1 10.5 12.9 10.1 2.0
Eggs..................... 14.9 3.4 4.4 0.6 0.3
Milk..................... 4.8 5.3 1.5 5.3 4.5
Lamb..................... 5.9 5.0 31.9 4.1 2.3
Pork..................... 4.3 4.7 2.5 1.9 0.3
Beef..................... 7.4 4.8 7.8 2.0 1.1
Other.................... 5.3 5.5 5.2 4.4 0.1
Fishing.................... (1.8) (13.4) 29.2 9.1 (13.3)
Source: INEI.
Agriculture and Livestock
The Peruvian agriculture and livestock sector employs approximately
8.8% of the population and is dominated by small-scale producers. The sector
represented 9.1% of total exports in 2001. Approximately 3.0% of Peru's land
area is devoted to arable production and permanent crops. Subsistence farming
predominates and productivity is low due to drainage and salinity problems,
although productivity increased during the 1990s.
The agriculture and livestock sector grew every year in the period from
1997 to 2000, despite the adverse effects of El Nino in 1998, increasing its
annual contribution to GDP from 7.8% in 1997 to 9.0% in 2001. In 1998, floods
and landslides caused by El Nino resulted in the loss of arable land and led to
irrigation deficiencies and plagues. The damage adversely affected growth of
agricultural output, which caused an increase in local prices of primary goods.
Despite the damage, the agriculture and livestock sector as a whole grew 1.5% in
1998, partly due to improved livestock-breeding conditions that resulted from
increased rainfall. The recovery from the effects of El Nino began in the fourth
quarter of 1998.
Normal weather conditions and several assistance and development
programs undertaken by the Ministerio de Agricultura, or Ministry of
Agriculture, led to 11.7% growth in 1999 and 6.2% growth in 2000. In 2001, this
sector declined by 0.6%, due to a 2.3% decline in agricultural production
because of a reduction in the area of land farmed, offset in part by a
simultaneous 1.7% growth in the amount of livestock raised as a result of the
increased production of milk, chicken and cattle.
Peru's main agricultural products are vegetables, potatoes and fruits,
which together accounted for approximately 36.3% of Peru's agricultural
production in 2001. Peru's traditional agricultural products include cotton,
sugar, coffee and rice. Agricultural production has increasingly focused on
non-traditional export products destined primarily for the winter markets of
Europe and the United States. The northern coast of Peru is the main area for
cultivation of non-traditional export crops such as asparagus, mangoes, passion
fruit and oranges. Animal husbandry--sheep, poultry and cattle--is predominant
in southern regions of the country.
Peru's main agricultural export products are coffee, sugar, asparagus
and paprika, which together accounted for approximately one-third of
agricultural exports in 2001. Other important export crops include cochineal,
cocoa, carmine and marigold flour. In recent years, there has been a boost in
fruit production for the export market, particularly of mangoes and grapes.
Cotton, rice and sugar are produced for both the domestic and the export
markets.
The Government, during the 1990s, gave priority to farming as part of
its program to channel resources to poorer regions and increase the
self-sufficiency of subsistence farmers. The highest priority crops included
rice, corn and wheat. By reviving traditional irrigation and terracing methods,
the Government extended cultivation through the use of marginal land, while also
promoting modern farming techniques.
In 1996, the Government also adopted measures to promote the
development of agriculture. These measures consisted of the following three new
laws:
o The Ley de Saneamiento Economico-Financiero de las Empresas Agrarias
Azucareras, or Law for the Financial Rehabilitation of Sugar
Companies, which established the Programa Extraordinario de
Regularizacion Tributaria, or Extraordinary Program for Tax Reform,
which we refer to in this prospectus as "PERTA." The PERTA program was
designed to facilitate the payment by sugar companies of overdue tax
liabilities through the introduction of various alternative payment
methods and a partial tax amnesty.
o The Ley de Reestructuracion de las Empresas Agrarias, or Law for the
Restructuring of Agricultural Companies, which expanded the PERTA
program to include independent farmers and irrigation companies.
o The Ley de Promocion del Sector Agrario, or Agricultural Sector
Promotion Law, which established a special tax regime for the
agricultural sector.
The Toledo administration expects to foster the development of
agriculture by implementing the following policies:
o improving supervisory standards and technical guidelines, such as seed
quality and growing conditions, to promote the production of important
crops;
o providing technical assistance to small-scale farmers in areas such as
land management, irrigation and sowing techniques; and
o organizing small-scale farmers into farming cooperatives in order to
improve their production and distribution capacity and enhance their
ability to generate jobs.
The Toledo administration supports an agricultural development program
that reduces the tariff on agricultural machinery and equipment from 12% to 7%
and the tariff on imports of agricultural inputs from 12% to 4%, in order to
increase agricultural production.
Fishing
Fishing is a small part of the Peruvian economy, contributing between
0.4% to 0.6% annually to GDP during the period from 1997 and 2001. Fish
products, however, are Peru's second leading export, accounting for 15.8% of
export earnings in 2001.
In the late 1960s, Peru was the world's leading fishing nation. Its
importance as a leading exporter of fishmeal declined during the 1970s and early
1980s due to ecological factors and over-fishing. In later years, Peru recovered
its position as one of the world's leading fishmeal producers and exporters.
At present, Peru's fish-processing industry is made up primarily of the
processing of anchovies into fishmeal. The industry has suffered frequently from
the destruction of fish stocks caused by changes in oceanographic conditions.
The Government, from time to time, imposes seasonal fishing bans based on
factors such as marine wildlife conditions and fish processing capacity.
Although these bans limit fishing extraction, their adverse impact on fishing
production is outweighed by the increased stock of protected species.
The fishing sector contracted 1.8% in 1997 and 13.4% in 1998 as a
result of El Nino, which had a devastating impact on catches for industrial
consumption, particularly of anchovies, that was not compensated by a greater
extraction of other sea species. In 1999 and 2000, the fishing industry
recovered, growing 29.2% in 1999 and 9.1% in 2000. This growth was caused by the
improved oceanographic conditions. In 2001, fishing declined 13.3% due to
climactic changes that dispersed the fish stock. During the first three months
of 2002, fishing industry revenues decreased, primarily due to poor atmospheric
conditions.
Mining and Hydrocarbons
The mining and hydrocarbons sector grew 11.2% in 2001 as a result of a
12.8% growth in the production of metals, which offset a 2.0% decline in the
production of hydrocarbons. Antamina, the world's largest copper and zinc mining
project, began its production phase in July 2001, contributing to the growth in
the volume of copper, zinc and silver extracts.
Mining. Peru is a leading regional producer of gold and the largest
producer in Latin America of silver, tin, copper, lead and zinc. Although mining
constitutes a small part of the country's GDP, contributing on average 4.4% to
GDP between 1997 and 2001, it is Peru's leading export sector, accounting for
44.9% of Peru's total export earnings in 2001. Copper alone accounted for 13.9%
of total export earnings in 2001.
Between 1997 and 2001, investment in the mining sector totaled
approximately US$6.3 billion, with an average annual investment of US$1.3
billion. The most important projects in this period were:
o the Antamina copper and zinc project, in which US$525 million was
invested in 1999, US$825 million in 2000 and US$530 million in 2001;
o the expansion of the Cuajone and Toquepala copper projects, in which
US$259 million was invested in 1998, US$250 million in 1999, US$132
million in 2000 and US$161 million in 2001; and
o the expansion of the Yanacocha gold project, in which US$83 million
was invested in 1998, US$126 million in 1999, US$277 million in 2000
and US$277 million in 2001.
Hydrocarbons. The hydrocarbons sector, which encompasses petroleum and
natural gas production, currently constitutes a minor part of the Peruvian
economy.
The petroleum companies in Peru are oriented towards the exploration
and development of oil fields located mainly in the Amazon jungle. A major part
of Peruvian production consists of heavy crude oil that is, for the most part,
exported and light crude oil used in local refineries. Petroleum products for
industrial and residential use are supplemented with imports.
Between 1997 and 2001, petroleum production decreased consistently due
to the exhaustion of oil producing fields and a reduction in drilling of
exploration wells that was triggered in part by a drop in the international
prices of petroleum.
Peru is currently only a minor producer of natural gas. As of December
31, 2001, Peru had approximately 13.1 trillion cubic feet of natural gas proven
reserves, of which approximately 482 billion cubic feet had been developed. In
the period from 1997 to 2001, natural gas production increased approximately
53.3%, from 8.5 billion cubic feet in 1997 to 13.1 billion cubic feet in 2001.
This increase resulted primarily from the launch of the Aguaytia thermoelectric
plant in 1998, which extracts the natural gas it requires for power generation
directly from the Amazon basin. The increased production was partially offset in
2000 by increased rainfall, which reduced the demand for thermoelectric
generation.
Peru's natural gas reserves are concentrated in the Camisea gas field,
which is located approximately 300 miles east of Lima. In February 2000, the
Government granted a 40-year operating concession over the Camisea gas field to
the private consortium Pluspetrol-Hunt Oil-SK Corporation. Under the concession,
the Government receives in royalties 37.2% of the profits generated. In October
2000, the Government granted concessions over the distribution and
transportation of Camisea's natural gas to a private consortium led by the
Argentine company Techint.
The Government expects successful development of the Camisea field to
increase significantly production of natural gas, providing Peru with a low cost
and abundant source of energy and potentially turning the country into a net
exporter of this commodity. Operations at Camisea are estimated to begin by
April 2004, which will lead to an increase of 160% in the production of natural
gas during the two-year period from 2004 to 2005.
Secondary Production
Manufacturing
The principal components of the manufacturing sector are:
o primary manufacturing, principally:
- processing sugar;
- processing meat products;
- production of fish meal, fish oil and other fish products;
- refining non-ferrous metals;
- refining petroleum; and
o non-primary manufacturing, consisting principally of:
- production of food, drinks and tobacco;
- production of textiles, leather products and footwear;
- production of paper products;
- production of chemical, rubber and plastic products;
- non-metallic minerals;
- production of iron and steel; and
- manufacturing machinery, equipment and metal products.
The performance of the manufacturing sector during the period from 1997
to 2001 generally tracked the overall performance of the Peruvian economy. The
sector contracted 3.2% in 1998 and 0.5% in 1999, primarily as a result of the
adverse effects of El Nino and the Asian financial crisis, and 1.1% in 2001, due
to reduced production of fish meal and anchovy sources, but showed moderate to
strong growth in 1997 and 2000. This growth was fueled primarily by
primary-industry output, which increased 1.8% in 1997, 21.1% in 1999 and 8.6% in
2000.
Primary manufacturing. Between 1997 and 2001 primary manufacturing
production fluctuated greatly, growing 1.8% in 1997, 21.1% in 1999 as the sector
recovered from the effects of El Nino and 8.6% in 2000. The sector contracted
8.7% in 1998, when the sector suffered from the effects of El Nino, and 2.9% in
2001. During this period, primary manufacturing contributed on average
approximately 3.3% annually to GDP and 14.7% annually to export earnings.
The following table sets forth information regarding primary
manufacturing production for the years indicated.
Primary Manufacturing Production
(percentage change from previous year, at constant 1994 prices)
For the first 3
months of:
----------------------
1997 1998 1999 2000 2001 2001 2002
--------- --------- -------- ---------- -------- ---------- ----------
Sugar ....................... 14.5% (29.3)% 34.5% 18.9% 6.1% (4.6)% 19.9%
Meat products ............... 7.2 10.2 11.2 7.4 1.7 0.9 8.3
Fishmeal and fish oil........ (17.6) (49.6) 129.8 21.6 (28.6) (37.6) (46.3)
Canned and frozen fish
products..................... 21.8 (43.8) 4.7 26.2 8.7 9.8 (37.4)
Refining of non-ferrous
metals....................... 4.4 9.4 5.7 3.4 3.5 (1.0) 8.8
Petroleum refining........... 4.5 2.4 (6.8) (1.2) 3.5 0.7 (0.9)
Overall change............ 1.8 (8.7) 21.1 8.6 (2.9) (5.6) (3.6)
Source: INEI and Central Bank
Non-primary manufacturing. Despite growth of 6.3% in 1997 and 6.1% in
2000, non-primary manufacturing contracted by 1.8% in 1998 and 5.8% in 1999, as
Peru experienced a decline in domestic demand due to the effects of the Asian
financial crisis. In 2001, non-primary manufacturing contracted by 0.6%, due to
suspension of investment programs by some businesses. During this period,
non-primary manufacturing contributed on average approximately 11.6% annually to
GDP and 52.2% annually to export earnings.
The following table sets forth information regarding non-primary
manufacturing production for the years indicated.
Non-Primary Manufacturing Production
(percentage change from previous year, at constant 1994 prices)
For the first 3
months of:
---------------------
1997 1998 1999 2000 2001 2001 2002
--------- ------- -------- -------- -------- -------- ----------
Food, drinks and tobacco.................. 5.5% 6.5% 6.4% 1.3% 0.7% 0.0% 4.3%
Textiles, leather products and footwear... 7.3 (8.7) (6.4) 10.1 (3.4) (4.7) (4.4)
Paper products............................ (0.7) 2.6 4.2 20.1 0.9 0.3 4.4
Chemical, rubber and plastic products..... 11.2 (2.8) (1.0) 7.5 3.8 (0.3) 4.0
Non-metallic minerals..................... 10.2 4.0 (12.4) (1.4) (1.5) 1.2 (1.1)
Iron and steel production................. 18.2 1.6 (8.7) 7.0 4.5 15.2 (11.9)
Manufacturing of machinery, equipment and
metal products......................... 9.2 0.5 (17.3) 9.1 (5.5) (5.7) (7.8)
Other..................................... 23.7 8.0 (10.3) (6.3) 3.3 2.0 (13.1)
Overall change......................... 6.3 (1.8) (5.8) 6.1 (0.6) (2.3) 0.0
Source: INEI and Central Bank.
Construction
The construction sector expanded 14.9% in 1997 and 0.6% in 1998, but
contracted 10.5% in 1999, 4.3% in 2000 and 6.0% in 2001. In the period from 1997
to 2001, the sector contributed between 4.8% and 6.3% annually to GDP. The sharp
rise in construction activity during 1997 was due primarily to high private
investment and increased public spending on preventive projects in preparation
for El Nino. The decline in construction since 1998 is due primarily to a
reduction in public and private investment, which was caused by a limited supply
of credit, a drop in informal housing construction due to lower nominal incomes
and the completion and delay of highway construction projects by the public
sector. In 2000, the construction sector was adversely affected by a 38% decline
in road rehabilitation and expansion projects as a result of limited public
financing. In 2001, the construction sector contracted due to a decrease in road
rehabilitation and expansion projects from 2000 because of reduced levels of
public and private investment. A total of 240 kilometers of national highway
were constructed and rehabilitated in 2001. During the first three months of
2002 the construction sector began to recover after three consecutive years in
recession, growing 10.3% primarily due to public works projects, primarily road
construction, and a slight increase in private sector building activity.
Electricity and Water
In the period from 1997 to 2001, the electricity and water sector
contributed on average approximately 2.1% annually to GDP.
Electricity. The electricity sector in Peru was traditionally under the
purview of the public sector until the Republic embarked on a deregulation and
privatization of the industry in 1992-1993. Under this initiative, the sector
was divided into three segments: production, distribution and transmission. The
Government initially focused most of its deregulation and privatization efforts
in the energy production and distribution segments, but gave open access to the
country's transmission grid. The Government also began granting concessions of
its transmission lines with the concession of the transmission line
Mantaro-Socabaya in 1998 and of its Southern Power Grid in 1999. In 2001,
concessions for the construction, maintenance and operation of power lines were
granted to La Oroya-Paragcha-Antamina and Aguaytia-Pucallpa. The electricity
sector has grown due primarily to the expansion of the power grid, lower fuel
prices and the introduction of more efficient centers to the system.
As of December 31, 2001, Peru's power plants had an installed capacity
of 5,913 MW, of which 50.1% came from hydroelectric plants and 49.9% from
thermoelectric plants. Despite the significant installed capacity of
thermoelectric plants, Peru's hydroelectric plants actually produce
approximately 89.6% of the country's electricity. This dependence on
hydroelectric generation has rendered the country vulnerable to electricity
shortages in times of drought. In 2001, 19,131 GW/hr were generated, serving
16,417 GW/hr to end users.
The following table sets forth information with respect to the
development of this sector for the years shown.
Principal Economic Indicators of the Electricity Sector
-------- ------- ------- ------- --------
1997 1998 1999 2000 2001
-------- ------- ------- ------- --------
Production of electricity sector:
Thermal (in GW/hr)................. 3,049 3,437 3,297 2,546 1,997
Hydroelectric (in GW/hr)........... 12,210 13,338 14,074 15,692 17,134
-------- ------- ------- ------- --------
Total generation (in GW/hr)..... 15,259 16,774 17,371 18,238 19,131
======== ======= ======= ======= ========
Losses, transmission and
distribution (in GW/hr).......... 2,693 2,349 2,542 2,469 1,267
Energy production
(in millions of US$)............. US$ 787 US$ 676 US$ 746 US$ 833 US$ 864
Energy sale income
(in millions of US$)............. US$ 1,017 US$ 990 US$ 1,004 US$ 1,112 US$ 1,153
Consumption by economic
sector (in GW/hr):
Residential........................ 3,383 3,637 3,767 3,929 4,045
Industrial......................... 6,221 7,672 8,132 8,628 9,343
Government......................... 527 534 535 541 542
Commercial......................... 2,272 2,141 2,215 2,427 2,487
-------- ------- ------- ------- --------
Total consumption............... 12,402 13,984 14,648 15,525 16,417
======== ======= ======= ======= ========
Source: OSINERG.
Water. Peru's central Government is responsible for water services in
Lima while the country's various municipalities are responsible for water
services in the urban and sub-urban areas in their respective jurisdictions. The
central and local governments designate special service companies, which may be
private, public or a mixture of both, to supply water services. In rural areas,
water services are supplied by communal administrative commissions. The water
sector is regulated by the Superintendencia Nacional de Servicios de
Saneamiento, or National Superintendence for Sanitary Services.
Services
Wholesale and Retail Trade
Wholesale and retail trade contracted 3.2% in 1998 and 1.9% in 1999 due
to a drop in domestic demand during these years. The sector grew at an average
annual rate of 7.8% in 1997 and 5.1% in 2000, but remained stable in 2001. In
the period from 1997 to 2001, this sector contributed on average 14.3% annually
to GDP, making it the second most important sector of the Peruvian economy.
Transportation and Telecommunications
The transportation and telecommunications sector has, with the
exception of a 1.0% decline in 1998, registered positive growth each year since
1997 due to increased domestic demand for telephone services. From 1997 to 2000,
a large portion of the Republic's telecom investment has gone into the mobile
telephony market. As a result, the Republic had 1.8 million mobile subscribers
by 2001, exceeding for the first time the number of fixed lines.
Transportation. Peru's transportation infrastructure has historically
been state-controlled. During the 1990s, as part of its privatization
initiative, the Government sought greater private sector involvement in this
field. The Government granted private concessions over transportation facilities
such as Lima's Jorge Chavez International Airport and the national railway
network.
Telecommunications. The following table provides information on the
evolution of the telecommunications sector.
Summary of Telecommunications Sector
1997 1998 1999 2000 2001 March 2002
--------- --------- --------- --------- --------- ---------
Lines:
Fixed wire................. 1,537,341 1,553,874 1,609,884 1,617,582 1,570,956 1,594,266
Cellular................... 435,706 736,294 1,045,710 1,339,667 1,798,928 1,950,555
Public phones.............. 40,129 49,399 63,276 83,855 94,596 101,852
--------- --------- --------- --------- --------- ---------
Total lines.............. 2,013,176 2,339,567 2,718,870 3,041,104 3,464,480 3,646,673
========= ========= ========= ========= ========= =========
Source: Organismo Supervisor de Inversion Privada.
Hotels and Restaurants
See "Balance of Payments and Foreign Trade--Services Trade" for
additional information on the tourism sector.
Public Administration
Based on a survey of households conducted by the Ministry of Labor, the
Government estimates that the public sector employed approximately 768,000
workers or 10% of the labor force in 2001.
Other Services
The private sector in Peru offers a variety of services that in the
aggregate constitute an important part of the Peruvian economy. These services
include financial services, health services and education services. In the
aggregate, these services grew at an average annual rate of 2.5% in 1997, 1998
and 2000, but contracted 0.7% in 1999. For a description of the evolution of the
financial services sector between 1997 and 2001 see "The Monetary
System--Financial Sector."
Privatization and Role of the State in the Economy
Privatization
In 1991, the Republic initiated an ambitious privatization program
beginning with the enactment of various laws for the promotion of private
investment. In 1991, in order to stimulate private investment, Congress enacted
Legislative Decree No. 662, which authorized the Government to enter into legal
stability agreements with foreign and domestic investors. These agreements
guarantee that current statutes on income taxes, remittances, export promotion,
administrative procedures and labor, as applied to a particular investment, will
remain unchanged for a period of ten years. In order to qualify for these
agreements, an investor must invest at least US$2.0 million within two years of
the agreement, or at least US$500,000 if the investment creates 20 jobs or
produces US$2.0 million in exports during the three years following the
agreement. As of December 31, 2001, investors had signed 21 legal stability
agreements with the Government worth approximately US$1.0 billion in investment.
In 2001, 14 privatization and concession-granting processes were completed, for
a value of US$255 million, that generated investment projects of US$97 million.
In 2002, to date, agreements of approximately US$5 million have been signed.
Currently, a new privatization program is being planned in light of the
suspension of the previous program due to internal political factors.
In 1991, Congress also enacted the Ley de Promocion de la Inversion
Extranjera, or Foreign Investment Promotion Act, and the Ley Marco para el
Crecimiento de la Inversion Privada, or Private Investment Growth Framework Act.
These laws provide for:
o equal treatment of both national and foreign investors;
o automatic authorization of foreign investments, which must be
subsequently registered with the Comision Nacional de Inversiones
y Tecnologias Extranjeras, or National Commission on Foreign
Investment and Technology, which we refer to in this prospectus
as "CONITE";
o the protection of the property rights of foreign investors;
o the free repatriation of property, dividends and profits; and
o the elimination of restrictions on the participation of
foreigners in banks and insurance companies.
The principle of non-discrimination against foreign investors was
incorporated into the 1993 Constitution. Additionally, the 1993 Constitution
allows foreign investors freely to hold and dispose of foreign currency. They
are, however, precluded from owning national radio and television stations,
mines, lands, forests, water, fuel or energy sources within 31 miles of an
international border, although foreign investors, under current laws, may obtain
a resolution from the executive branch authorizing such investments.
The Republic also established the Comision de Promocion de la Inversion
Privada, or Commission for the Promotion of Private Investment, which we refer
to in this prospectus as "COPRI." COPRI's main function was to design and
implement a comprehensive program to foster private investment through the
privatization and concession of large-scale infrastructure and public utility
projects. COPRI's board of directors oversaw all privatizations and concessions,
while two Special Privatization Committees established the procedures for
privatizations and execute the privatization transactions in specific
industries. The members of the Special Privatization Committees have
historically been current and former senior executives from the private sector.
In 2002 COPRI merged with CONITE and one other entity to become part of
Agencia de Promocion de la Inversion, the Investment Promotion Agency, or
"PROINVERSION." The responsibilities and authority of COPRI and CONITE have been
transferred to PROINVERSION.
Since 1992, the Government has privatized the vast majority of its
assets, including those in the finance, fishing and telecommunications sectors.
Significant progress has also been made in other sectors. The Government has
privatized a majority of its assets in the mining, manufacturing, hydrocarbons,
electricity and agriculture sectors. The more than 258 privatizations that have
been completed in Peru since 1992 have generated revenues of approximately
US$9.8 billion. To date, fourteen concessions have been awarded to private
companies. Significant privatizations and concessions include:
o the Antamina copper and zinc mining project;
o the Camisea natural gas project;
o the concession to operate Lima's Jorge Chavez International
Airport;
o the concession to operate the railway systems in the South,
Southeast and central regions of the country;
o the sale of controlling equity interests in the
telecommunications companies ENTEL and CPT;
o the concession to operate the transmission line Mantaro-Socobaya
and the Southern Power Grid;
o the concession to operate the Rio Chillon water treatment plant;
and
o the privatization of the Relapasa petroleum refinery.
The telecommunications sub-sector in Peru underwent an extensive
liberalization during the 1990s, and a large number of foreign companies have
entered the market. Although private competition was originally limited to
wireless services, the telecommunications industry grew to include more than 120
companies as of the end of 1997. The total number of telephone lines in Peru
increased from 2.0 million in 1997 to 3.5 million in 2001. As of 1998, the most
recent year a survey was conducted, there were 208,200 open internet accounts.
The liberalization of the telecommunications market began in 1994 when
the Government sold to Telefonica de Espana majority interests in the
state-owned telecommunication companies Empresa Nacional de Telecomunicaciones,
which we refer to in this prospectus as "ENTEL," and Compania Peruana de
Telefonos, which we refer to in this prospectus as "CPT." The Republic followed
this initial step with the opening of the wireless market to private
competition. Telefonica de Espana maintained a monopoly over fixed-line services
until 1998 when it voluntarily decided to end its exclusivity service concession
a year ahead of schedule. Nine private companies have since been granted
concession rights to operate in the fixed-line market. To date, 259 concessions
have been granted to a total of 224 businesses to provide public
telecommunications services.
Substantially all of the stock of privatized companies is held by
foreign companies such as Telefonica de Espana (telecommunications), Repsol
(energy), Endesa (electricity), Banco Bilbao Vizcaya Argentaria (financial
services) and Telecom Italia (telecommunications).
The pace of privatizations began to slow after 1996, when privatization
proceeds reached record levels. This decline in the level of privatizations
resulted in part from a shrinking supply of state-owned enterprises, Fujimori's
retreat from unpopular privatization initiatives to gain support for his
presidential bid and the political turmoil that accompanied Fujimori's
re-election. Privatizations since 1996 have consisted primarily of the sale of
remnant government shares in privatized companies.
Upon taking office in July 2001, the Toledo administration sought to
revitalize the Republic's privatization agenda by charging two Special
Privatization Committees to develop privatization programs for projects
including highway networks, ports, airports and tourism, penal facilities,
mining and agricultural development projects.
The privatization program has generally been viewed unfavorably by
Peruvians, fearful they will lose their jobs with privatizations and opposed to
the sale of well-known state assets to non-Peruvians. Moreover, reports of
bribery and misappropriation of funds during the Fujimori administration have
tainted the process.
In June 2002, protests in Arequipa and Tacna against the sale of power
generation companies Egasa and Egesur led the Government to suspend the sale of
the two companies and the privatization process. Together, these two companies
own 7% of the power generation market. The Government's original plan was to
privatize these companies by the end of September in a single bidding process,
but protests prompted the administration to suspend the sale of the companies to
Tractebel, a Belgian leader in the sector that had won the privatization
auction. Tractebel has since withdrawn its offer.
Rather than generating the initial estimate of US$700 million,
privatization activities carried out before June 10, 2002 amounted to US$362
million (excluding Egasa and Egesur), with US$121 million transferred to the
public account during this period.
In the letter of intent negotiated with the IMF, privatizations and
concessions were considered "[a]n essential element to generate confidence among
investors and to help finance fiscal deficits in 2002 and 2003." The
Government's aim, as agreed with the IMF as part of a two-year program, was to
generate income of at least $700 million this year and again next year through
the sale of concessions and of state assets. The Republic has, at present,
suspended its privatization program due to political and public opposition. The
IMF has accordingly agreed to adjust both the 2002 and 2003 targets for the
Republic's consolidated public sector deficit to 2.3% of GDP for 2002 and 1.9%
of GDP for 2003.
Role of the State in the Economy
As a result of the privatization program undertaken by the Government
during the 1990s, the public sector currently plays a more limited role in the
economy than it did in previous decades. The Toledo administration supports the
privatization process and further deregulation, based on the view that
sustainable economic growth is driven primarily by private investment. In 2001
the Government completed 14 privatization and concession-granting processes for
a value of US$255 million and generated US$97 million in investment projects.
Additionally, the Government currently has minority interests in some of the
privatized companies, including Transmantaro (power generation), Etevensa (power
generation) and Redesur (power transmission).
Employment and Labor
Employment
A significant portion of the Peruvian population lacks regular
full-time employment. Despite periods of economic growth in recent years,
unemployment and underemployment remain one of Peru's most entrenched problems.
The Toledo administration has placed job creation through the private sector as
one of the most important items on its agenda.
Unemployment grew during the period from 1997 to 1999 and in 2001 due
primarily to an increase in the participation rate--the percentage of the
population 14 years old or older that forms part of the labor force--during this
period, and decreased in 2000, as the participation rate leveled off slightly.
Underemployment remained at high levels during the period from 1997 to 2001,
increasing 4.5% in 2001 as a result of a 3.4% increase in the participation rate
combined with stagnant economic growth. The principal sectors in terms of
numbers of jobs are agriculture, services, production of consumer goods, and
wholesale and retail trade. The continuously high levels of unemployment and
underemployment have in recent months fueled social tensions and protests
against privatizations and large industrial projects. In addition, this unrest
has led to political tensions resulting in the resignations of a number of the
Counsel of Ministers and threatens the continuity of the coalition supporting
the Toledo administration in anticipation of the regional elections to be held
later in November.
The following table sets forth employment statistics for the years
indicated.
Employment and Labor
(in percentages)
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Participation rate(1)............. 64.5% 65.4% 66.9% 64.3% 67.7%
Underemployment rate(2)........... 45.0 43.9 43.2 43.1 47.6
Unemployment rate(3).............. 7.7 7.8 8.0 7.4 7.9%
(1) Refers to the percentage of the working-age population (14 years old or
older) that is in the labor force.
(2) Refers to the percentage of the working-age population (14 years old or
older) working part-time who would prefer to work more hours, plus the
percentage of the working-age population that usually works full-time but
who, in the week the employment survey was conducted, worked less than 35
hours per week as a result of economic constraints.
(3) Refers to the percentage of the working-age population (14 years old or
older) that, in the week the employment survey was conducted, was seeking
remunerated employment.
Source: Convenio MTPS - INEI Encuesta Nacional de Hogares III Trimestre,
1997-2001.
The following table sets forth information on employment by sector, as
a percentage of total employment, for the years indicated.
Employment
(percentage by sector)
1997 1998 1999 2000 2001
----- ----- ----- ----- -----
Agriculture, livestock, fishing and
forestry.......................... 7.6% 5.3% 5.8% 6.8% 8.8%
Mining.............................. 0.7 0.9 0.4 0.7 0.6
Manufacturing....................... 14.2 13.4 12.4 13.6 12.6
Construction........................ 5.4 5.6 5.2 4.2 4.5
Electricity, gas and water.......... 0.4 0.4 0.6 0.4 0.3
Transportation and telecommunications 7.7 8.4 8.6 9.0 8.4
Wholesale and retail trade.......... 29.2 29.4 28.8 28.9 27.8
Services............................ 32.7 35.1 35.3 34.1 34.6
Other............................... 1.9 2.8 2.6 2.3 2.4%
----- ----- ----- ----- -----
Total............................. 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
Source: Convenio MTPS - INEI Encuesta Nacional de Hogares III Trimestre,
1996-2000.
The Peruvian economy has a significant "informal sector" that provides
employment to the majority of the labor force, including a significant number of
women. The term "informal sector" refers to economic activities that take place
outside of the formal norms for economic transactions established by the state
or developed through formal business practices. It generally involves the
production and exchange of legal goods and services without the appropriate
business permits, without reporting of tax liability, without complying with
labor regulations and without legal guarantees for suppliers and end users. Due
to the nature of this sector, it is difficult to obtain reliable statistics
measuring the sector's contribution to the Peruvian economy. For purposes of
measuring the activity in the informal sector, the Government defines it, in the
area of wholesale and retail trade, to be all businesses that have one to four
workers, and in the manufacturing field, to be all businesses that have one to
nine workers, in both cases regardless of whether such businesses are within the
formal economy. The Government, however, excludes from its definition of the
informal sector all public and independent workers.
The percentage of the population working in the formal sector fell
during the period from 1997 to 2001, from 32.1% to 30.5%, represented mostly in
medium and large businesses and the public sector. The percentage of the
population working in the informal sector correspondingly grew from 67.9% to
69.5%.
Wages and Labor Productivity
The Ministerio de Trabajo y Promocion Social, which we refer to in this
prospectus as the "Ministry of Labor," sets a single minimum wage for all
sectors of the economy based on macroeconomic indicators such as GDP growth and
the inflation rate. The minimum wage was last adjusted in 2000 and currently
stands at S/. 410 per month, equivalent to US$115 per month. The Republic does
not currently compile statistics on labor productivity.
Poverty and Income Distribution
In the early 1990s, the poverty level in Peru declined as a result of
economic expansion and significant reduction in inflation. Poverty increased in
the late 1990s as a result of the downturn in the Peruvian economy. The
political tensions and instability in the last years of the Fujimori regime, and
the negative impact they had on private investment and bank credit, further
increased the incidence of poverty.
The Republic classifies households with earnings of less than US$60 per
capita per month as falling below the poverty line. Using this standard, the
percentage of the population living below the poverty line increased from 49% in
1997 to 54.1% in 2000. An increasing number of Peruvians earn less than US$30
per capita per month. The poorest 40% of the population earned 14.1% of the
national income in 2001 as compared to 13.9% in 1998, while the share of the
national income earned by the wealthiest 10% decreased slightly from 34.6% in
1998 to 33.9% in 2001. 1998 and 2001 are the most recent years for which income
distribution data is available.
The following table sets forth information regarding income
distribution for the years indicated.
Evolution of Income Distribution
(percentage of total national income)
Income group 1998 2001
------- ---------
Lowest 40%......................... 13.9% 14.1%
Next 20%........................... 13.9 14.2
Next 20%........................... 21.4 21.7
Highest 20%........................ 50.9 49.9
Highest 10%........................ 34.6 33.9
Source: INEI. "Encuesta Nacional de Hogares 1998, 2001"
The Toledo administration has declared raising the standard of living
of the Peruvian population and remedying poverty to be among its most important
goals. President Toledo's strategy to reduce poverty is based on:
o achieving the fiscal balance and macroeconomic stability necessary to
foster private investment, both foreign and domestic, which the
administration believes will lead to economic growth and job creation;
and
o directing a greater share of public funds towards social programs,
particularly education and health.
These policies are reflected in the 2002 budget, which reduces overall
expenditures by 1.6% but directs approximately 46% of expenditures to social
programs on education, health services and programs to alleviate poverty. The
2002 budget also increases allocations to Peru's poorest regions by 20% as
compared to the 2001 budget.
Poverty in Peru has been attributed to unemployment and underemployment
and the increasing disparity in income between skilled, educated workers and
unskilled and relatively less educated workers. The educational system has
suffered from a lack of resources and inadequate teacher training. The 2002
budget projects a 15% increase in education spending as compared to the 2001
budget. The Toledo administration's plan to improve education includes the
following elements:
o improving teacher training;
o increasing gradually salaries of teachers in rural areas by a total of
30% by the year 2006;
o building more schools;
o expanding bilingual education programs; and
o providing Internet access in public schools.
One of the most significant aspects of the Toledo administration's
anti-poverty plan is the establishment of a social program known as "A
Trabajar." A Trabajar is a two-year initiative that places unemployed workers in
public sector jobs in the development and maintenance of infrastructure for up
to six months. The program also invests in job training and technical assistance
to small businesses and in improving the capacity of local governments and
public sector agencies to formulate, coordinate and monitor effectively social
initiatives.
The Government expects the A Trabajar program to cost approximately
US$597 million and expects it to generate approximately 439,500 jobs in two
years. In October 2001, the Toledo administration secured US$1.0 billion from a
group of 18 countries and eight international organizations to help finance the
program and its other poverty initiatives. Of this amount, the Government
expects approximately US$615.3 million to be disbursed in the form of donations,
US$226.4 million in the form of debt exchanges and US$158.5 million in the form
of credit concessions.
As of July 2002, the A Trabajar program has generated an estimated
57,000 jobs in 1,300 rural districts at a cost of S/. 221 million and an
estimated 20,000 jobs in urban areas at a cost of S/. 44 million.
The Toledo administration's plan to reduce poverty also includes the
following measures:
o a 9% nominal increase in public sector wages, implemented in 2001;
o the creation of a Peruvian agency for international cooperation to
elicit and administer international financing for the Government's
poverty initiatives; and
o greater investment in improving roads, sanitation facilities and
sub-standard housing.
Environment
The most serious environmental problems currently confronting Peru are
the scarcity and quality of the water supply, soil erosion, air pollution,
deforestation and inadequate waste management in urban centers. The Republic
expects to address these environmental problems through greater supervision and
regulation, as well as through community and private-sector awareness and
involvement.
To coordinate more efficiently the Government's environmental policies,
the Consejo Nacional del Ambiente, or National Council for the Environment,
which we refer to in this prospectus as "CONAM," has launched an environmental
initiative designed to improve transparency within CONAM and improve
collaboration between the central Government, municipalities and environmental
interest groups. CONAM has organized and trained Comisiones Ambientales
Regionales, or Regional Environmental Commissions, to direct environmental
initiatives at the regional level. CONAM has also developed a program known as
the Sistema Nacional de Informacion Ambiental, or National System of
Environmental Information, which seeks to create a national database of
environmental statistics. CONAM's budget in 2001 was S/. 4 million. CONAM's
initial budget for 2002 was S/. 5 million, less than 0.1% of the Republic's
budget, but to date has been adjusted to S/. 8 million to reflect all financing
sources, including a transfer to Fondo Nacional del Ambiente, or National Fund
for the Environment, for S/. 800 thousand.
The Government requests environmental impact studies before authorizing
any public or private construction project. Each regulatory agency within each
sector of the economy issues regulations to protect the environment and imposes
its own sanctions for the violation of such rules. The Ministry of Energy and
Mines has been most effective in designing an effective environmental program
and is viewed as a model for other governmental agencies. The Ministry's
Programa para Ahorro de Energia, or Energy Conservation Program, actively
promotes energy conservation and fuel-efficient energy alternatives. The
Ministry of Energy and Mines also developed and implemented an environmental
curriculum for public schools that emphasizes conservation.
BALANCE OF PAYMENTS AND FOREIGN TRADE
Balance of Payments
The balance of payments accounts are used to record the value of the
transactions carried out between a country's residents and the rest of the
world. The balance of payments is composed of two accounts:
o the current account, which comprises:
- net exports of goods and services, that is the difference in
value of exports minus imports;
- net financial and investment income; and
- net transfers; and
o the capital account, which is the difference between financial capital
inflows and financial capital outflows.
Current Account
One of the most important aspects of the current account is the trade
balance. The four primary factors that drive the trade balance are the
following:
o The relative rate of economic growth of a country as compared to that
of its trading partners. Generally, if a country's economy grows
faster than that of its trading partners, its relative level of
consumption of goods and services will tend to rise and its level of
imports will tend to increase more rapidly than its level of exports.
o The relative level of domestic prices against foreign prices, as
reflected by the real exchange rate. Generally, if a country's
domestic prices rise relative to those of its trading partners, there
is a tendency for the country's level of exports to decline and for
its level of imports to increase.
o Changes in production costs, technology and worker skills. More
efficient production will tend to lower production costs, which in
turn will tend to lower prices. As prices fall, there will be a
tendency for the country's level of exports to increase.
o Changes in consumer tastes, which may affect the demand for a
country's goods and services abroad and the demand for foreign
products in the domestic market.
Between 1997 and 2001, the Republic's current account registered annual
deficits that were completely offset by a surplus in the capital account in 1997
and only partially offset by capital account surpluses from 1998 through 2001.
During this period, the current account deficit decreased from 5.8% of GDP in
1997 to 2.0% of GDP in 2001.
In 1998, the El Nino weather phenomenon led to a substantial decrease
in the volume of fishing and agricultural exports, while sharp decreases in the
international prices of the Republic's primary exports led to a significant
decline in the value of total exports. As a result, Peru's trade deficit
increased 43.2%, which contributed to an increase in the current account deficit
to 5.9% of GDP, as compared to 1997.
In 1999, the current account deficit decreased to 2.9% of GDP, as
compared to 1998. This was partly as a result of a 74.4% drop in the trade
balance that was caused primarily by weaker domestic consumer demand and a
decrease in private investment, which led to a decline in the level of imports.
In 2000, the current account deficit remained at 2.9% of GDP, reflecting the
continued recovery of fishing and agricultural exports from the effects of El
Nino.
In 2001, the current account registered a deficit of 2.0% of GDP, as
compared to a deficit of 2.9% for 2000. This lower deficit is mainly
attributable to:
o a decline in imports, due to weaker domestic demand, and an increase
in the volume of the Republic's primary exports, which reduced the
Republic's trade deficit;
o reinsurance income from abroad in response to the earthquakes that
occurred in the south of the country in June and July 2001, which
reduced the country's trade services deficit; and
o reduced remittances and dividends by utilities out of Peru as a result
of economic instability and lower international interest rates.
During the first three months of 2002, the current account deficit
decreased to 2.6% of GDP, as compared to the 3.8% of GDP recorded for the first
three months of 2001, primarily due to weaker domestic consumer demand and a
decrease in private investment, which led to a decline in the level of imports.
Capital Account
The capital account reflects foreign direct investment and monetary
flows into and out of a nation's financial markets. Between 1997 and 2001, Peru
attracted considerable foreign investment, despite significant reductions in
investment inflows from 1996 to 1997 and from 1999 to 2000. For a description of
foreign direct investment trends, see "--Foreign Direct Investment."
In 1997, substantial foreign capital inflows contributed to increasing
surpluses in the capital account, which offset the current account deficits
registered during the year. In 1997, these inflows resulted in part from the
significant increase in the availability of short-term foreign credit for the
Peruvian banking sector on the heels of the Brady restructuring.
During the period from 1998 to 2000, however, the capital account
surplus contracted, leading to annual deficits in the Republic's balance of
payments. This negative trend in the capital account was a result of significant
withdrawals of short-term capital from the country in response to the adverse
effects of the Asian and Russian financial crises and El Nino's devastating
effect on Peru's primary export market. In 2000, the capital account surplus
showed an increase from the prior year's level, despite a 63.5% drop in foreign
direct investment as a result of the Republic's political turmoil, which
fostered uncertainty among investors. These factors, however, were countered by
a 78.8% decrease in short-term capital outflows. The sharp decrease in
short-term capital outflows followed the significant prepayments in foreign debt
that banking institutions undertook in 1999 in response to a tightening of
domestic credit.
In 2001, the capital account registered a surplus of 2.0% of GDP, as
compared to a surplus of 1.7% of GDP for 2000. Despite the political uncertainty
surrounding the April 2001 elections, the capital account surplus in 2001 was
due primarily to increased capital flow toward Antamina, the world's largest
copper and zinc project, and the telecommunications sector. However, portfolio
investment declined significantly, from US$123 million in 2000 to US$43 million
in 2001, due to an unfavorable international economic environment.
During the first three months of 2002, the capital account surplus grew
to US$406 million from US$249 million recorded for the first three months of
2001. This growth was primarily a result of a significant increase in long-term
capital inflows due to the issuance of the Global Bonds by the Republic, offset
in part by the prepayment of bond issues by a mining company and the acquisition
of foreign bonds by the non-banking financial sector.
The following table sets forth information, based on period-end
exchange rates, regarding the Republic's balance of payments for the years
indicated.
Balance of Payments
(in millions of U.S. dollars, at current prices)
For the first 3
months of:
---------------------
1997 1998 1999 2000 2001 2001 2002
---------- ---------- --------- --------- ----------- --------- ----------
Current account:
Trade balance:
Exports (FOB)(1).................. US$ 6,832 US$ 5,757 US$ 6,119 US$ 7,034 US$ 7,108 US$ 1,663 US$ 1,575
Imports (FOB)..................... (8,553) (8,222) (6,749) (7,351) (7,198) (1,848) (1,616)
---------- ---------- --------- --------- ----------- --------- ----------
Trade balance................... (1,721) (2,466) (630) (317) (90) (186) (41)
Services, net....................... (787) (657) (666) (793) (800) (245) (215)
Of which:
Net income from tourism(2)...... 383 392 446 381 224 19 27
Net income from (165)
transportation(3)............. (608) (651) (556) (617) (657) (143)
Financial and investment income,
net(4)........................... (1,825) (1,211) (1,146) (1,452) (1,203) (316) (309)
Current transfers, net.............. 920 977 964 993 999 259 223
Of which:
Workers' remittances............ 636 647 670 718 717 182 145
---------- ---------- --------- --------- ----------- --------- ----------
Current account balance....... (3,412) (3,357) (1,478) (1,568) (1,094) (488) (343)
Capital account:
Foreign direct investment........... 2,055 1,582 1,812 662 1,063 276 224
Portfolio investment................ 156 (346) (107) 123 43 (6) 18
Other medium- and long-term
capital(5)...................... 1,127 1,046 542 460 439 40 151
Of which:
Disbursements to the public 226
sector........................ 1,774 790 1,237 1,485 1,344 1,554
Other capital, including short-term
capital......................... 2,640 (429) (1,676) (355) (486) (61) 13
---------- ---------- --------- --------- ----------- --------- ----------
Capital account balance....... 5,978 1,854 571 890 1,059 249 406
Errors and omissions(6)............. (122) 253 102 547 452 177 38
---------- ---------- --------- --------- ----------- --------- ----------
Balance of payments......... US$ 2,444 US$ (1,250) US$ (805) US$ (131) US$ 417 US$ (63) US$ 101
========== ========== ========= ========= =========== ========= ==========
Financing:
Change in gross Central Bank
reserves(7).......................US$ (1,660) US$ 1,151 US$ 922 US$ 331 US$ (310) US$ 105 US$ (34)
Use of IMF resources................ (73) (145) (147) (141) (138) (68) (67)
Exceptional financing, net.......... (711) 244 30 (58) 31 26 0
---------- ---------- --------- --------- ----------- --------- ----------
Total financing................... US$ (2,444) US$ 1,250 US$ 805 US$ 131 US$ (417) US$ 63 US$ (101)
========== ========== ========= ========= =========== ========= ==========
Memorandum item:
Current account balance/deficit
(as % of GDP)................... (5.8)% (5.9)% (2.9)% (2.9)% (2.0)% (3.8)% (2.6)%
(1) Based on customs declarations, records of temporary admissions, free-trade
zone imports, grants and other adjustments.
(2) Based on a survey of tourists. Income from tourism represents the total
expenditure by a tourist multiplied by the total number of tourists.
(3) Includes freight services, passenger transportation and port expenses of
ships and airplanes.
(4) Includes interest payments.
(5) Includes debt amortization payments.
(6) Represents errors and omissions from double-entry accounting resulting from
incomplete or overlapping coverage, different prices and incomplete times
of recording and conversion practices.
(7) Refers to changes in reserves used to finance balance of payments.
N/A = Not Available.
Source: Central Bank
Foreign Trade
In 1991, the Republic began to liberalize its trade regime through a
substantial reduction in tariffs and the promotion of regional free trade
agreements. Between 1995 and 1997, the Republic imposed two principal tariffs on
imports, a 15% tariff applicable to raw materials used in a variety of
industries and a 25% tariff imposed on capital goods and a variety of selected
items. The tariff reform approved in 1997 reduced the 15% rate to 12% and the
25% rate to 20% but simultaneously increased the tariff on some agricultural
goods to 17% and 25%. In April 2001, the transition government of Valentin
Paniagua reduced the tariff on some raw materials from 12% to 4%.
The current import tariff structure is as follows:
o 4% tariff, which applied to 15.6% of Peru's imports in 2001,
principally to raw materials used in a variety of industries,
including the chemical, food, metal, mining, paper, textile and
steel industries;
o 12% tariff (which replaced the 15% tariff), some which applied to
73.6% of Peru's imports in 2001, including some capital goods,
intermediate goods and various consumer goods and raw materials;
o 17% tariff, which applied to 1.8% of Peru's imports in 2001,
including pork products, corn, beer and alcoholic
beverages;
o 20% tariff (which replaced the 25% tariff), which applied to 3.5%
of Peru's imports in 2001, principally sugar and a variety of
selected consumer items, including textiles, footwear, clothing,
heaters, refrigerators and air conditioning equipment; and
o 25% tariff, which applied to 5.5% of Peru's imports in 2001,
including milk products, meat, potatoes, onions, coffee and a
number of other agricultural products.
In 2001, the effective import tariff, which varies as a function of the
level of import goods subject to each prescribed tariff, was 11.8%. The
Government expects the effective import tariff to be approximately 13.6% in
2002.
Between 1997 and 2001, the trade deficit decreased from US$1.7 billion
to US$90 million due to a reduction in imports, particularly consumer and
capital goods, as a result of a decrease in private investment and an increase
in gold exports. Total exports increased from US$6.8 billion in 1997 to US$7.1
billion in 2001, with an average annual growth rate of 1.0%. Total imports
decreased at an average annual rate of 4.1%, from US$8.6 billion in 1997 to
US$7.2 billion in 2001. In 2001, the combined value of the Republic's imports
and exports of goods and services equaled 33.1% of GDP.
The Republic maintains close commercial ties with the United States,
its principal trading partner. In 2001, approximately 24.9% of the Republic's
total exports were bound for the United States, while 30.1% of total imports
originated from ports in the United States.
Peru classifies its non-free trade zone exports as traditional and
non-traditional exports. Traditional exports consist of goods that historically
have constituted a greater share of Peru's exports and include mostly raw
materials. Non-traditional export goods include goods that historically have not
been exported in significant quantities and traditional export goods that have
been transformed through manufacturing or other processing into non-traditional
export goods.
In 2001, Peru's most important exports consisted of:
o traditional mining exports, such as gold, silver, copper, zinc
and lead, valued at US$3.2 billion, representing 44.9% of total
exports;
o traditional fishing exports, such as fishmeal and fish oil,
valued at US$926 million, representing 13.0% of total exports;
o non-traditional textile exports, such as textile fibers and
cloth, valued at US$664 million, representing 9.3% of total
exports; and
o non-traditional agriculture and livestock exports valued at
US$437 million, representing 6.1% of total exports.
The following tables set forth further information regarding exports
for the years indicated.
Exports
(in millions of U.S. dollars, at current prices)
For the first 3 months of:
--------------------------
1997 1998 1999 2000 2001 2001 2002
----------- --------- ---------- ---------- ---------- -------- --------
Traditional:
Fishing...................... US$ 1,126 US$ 410 US$ 601 US$ 955 US$ 926 US$ 194 US$ 106
Agricultural................. 472 323 282 249 207 22 14
Mining....................... 2,731 2,747 3,008 3,216 3,188 732 837
Oil and derivatives.......... 376 233 251 402 421 101 88
----------- --------- ---------- ---------- ---------- -------- --------
Total traditional.......... 4,705 3,712 4,142 4,821 4,743 1,049 1,045
Non-traditional:
Agriculture and livestock.... 340 302 406 394 437 102 126
Textiles..................... 573 534 575 701 664 178 154
Fishing...................... 278 225 190 177 197 51 45
Fabricated metal products and
machinery.................. 57 105 76 96 158 28 22
Chemical..................... 206 196 195 212 246 61 57
Basic metal industries....... 234 222 198 215 189 55 37
Non-metallic minerals........ 51 52 51 47 58 13 14
Other(1)..................... 308 331 185 202 232 48 55
----------- --------- ---------- ---------- ---------- -------- --------
Total non-traditional...... 2,046 1,967 1,876 2,044 2,181 536 510
Other:
Fishing permits.............. 7 0 31 83 102 58 3
Other(2)..................... 73 78 69 86 82 20 17
Total other................ 81 78 100 169 184 77 20
----------- --------- ---------- ---------- ---------- -------- --------
Total exports............ US$ 6,832 US$ 5,757 US$ 6,119 US$ 7,034 US$ 7,108 US$1,663 US$1,575
=========== ========= ========== ========== ========== ======== ========
(1) Includes gold and silver jewelry, wood and paper, leather and handcrafts.
(2) Includes the sale of fuel and food to foreign vessels and the reparation of
capital goods.
Source: Central Bank.
Exports
(as a percentage of total exports, at current prices)
For the first 3 months
of:
----------------------
1997 1998 1999 2000 2001 2001 2002
------ ------- ------- -------- ------- ------- -------
Traditional:
Fishing...................... 16.5% 7.1% 9.8% 13.6% 13.0% 11.7% 6.7%
Agricultural................. 6.9 5.6 4.6 3.5 2.9 1.3 0.9
Mining....................... 40.0 47.7 49.2 45.7 44.9 44.0 53.2
Oil and derivatives.......... 5.5 4.0 4.1 5.7 5.9 6.1 5.6
------ ------- ------- -------- ------- ------- -------
Total traditional.......... 68.9 64.5 67.7 68.5 66.7 63.1 66.3
Non-traditional:
Agriculture and livestock.... 5.0 5.2 6.6 5.6 6.2 6.1 8.0
Textiles..................... 8.4 9.3 9.4 10.0 9.3 10.7 9.8
Fishing...................... 4.1 3.9 3.1 2.5 2.8 3.1 2.8
Fabricated metal products and
machinery.................. 0.8 1.8 1.2 1.4 2.2 1.7 1.4
Chemical..................... 3.0 3.4 3.2 3.0 3.5 3.7 3.6
Basic metal industries....... 3.4 3.9 3.2 3.1 2.7 3.3 2.3
Non-metallic minerals........ 0.8 0.9 0.8 0.7 0.8 0.8 0.9
Other(1)..................... 4.5 5.8 3.0 2.9 3.3 2.9 3.5
------ ------- ------- -------- ------- ------- -------
Total non-traditional...... 30.0 34.2 30.7 29.1 30.7 32.3 32.4
Other:
Fishing permits.............. 0.1 0.0 0.5 1.2 1.4 3.5 0.2
Other(2)..................... 1.1 1.4 1.1 1.2 1.2 1.2 1.1
------ ------- ------- -------- ------- ------- -------
Total other................ 1.2 1.4 1.6 2.4 2.6 4.7 1.3
Total exports............ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
====== ======= ======= ======== ======= ======= =======
(1) Includes gold and silver jewelry, wood and paper, leather and handcrafts.
(2) Includes the sale of fuel and food to foreign vessels and the reparation of
capital goods.
Source: Central Bank.
Geographic Distribution of Exports
(as a percentage of total exports, at current prices)
For the first 3
months of:
-----------------
1997 1998 1999 2000 2001 2001 2002
------ ------ ------ ------ ------ ------ ------
United States............ 23.6% 32.7% 29.2% 27.5% 24.9% 23.9% 26.7%
Canada................... 1.8 2.2 2.0 1.8 2.0 1.1 2.9
Mexico................... 1.7 2.4 2.8 2.2 1.8 1.9 1.4
------ ------ ------ ------ ------ ------ ------
Total North America.... 27.0 37.3 34.0 31.4 28.7 26.8 30.9
Brazil................... 3.8 3.1 2.9 3.2 3.2 3.8 3.3
Colombia................. 2.3 2.5 1.7 2.1 2.2 2.2 2.4
Chile.................... 2.0 2.4 2.9 3.8 4.0 3.7 3.6
Venezuela................ 2.1 1.9 1.5 1.6 2.1 2.1 1.8
Other.................... 6.1 5.7 4.8 5.8 6.5 7.9 6.2
------ ------ ------ ------ ------ ------ ------
Total Latin America and
the Caribbean........ 16.2 15.7 13.8 16.5 18.0 19.7 17.4
United Kingdom........... 4.5 4.9 9.4 8.4 13.4 13.0 12.8
Switzerland.............. 6.1 8.5 9.2 7.9 4.4 4.3 6.9
Germany.................. 5.7 4.1 4.1 3.1 3.0 1.8 2.7
Spain.................... 2.3 2.7 3.0 2.7 3.0 3.0 3.3
Other.................... 13.4 11.7 10.1 8.6 8.5 8.4 8.7
------ ------ ------ ------ ------ ------ ------
Total Europe........... 32.0 31.9 35.8 30.7 32.3 30.5 34.3
Japan.................... 7.1 3.8 4.3 5.5 6.5 8.4 4.8
China.................... 7.3 4.1 3.6 6.4 6.1 5.0 6.1
Other.................... 8.9 6.3 7.5 8.2 7.3 8.8 6.0
------ ------ ------ ------ ------ ------ ------
Total Asia............. 23.3 14.2 15.4 20.2 19.8 22.1 16.9
Africa and others........ 1.5 0.8 1.0 1.3 1.1 0.8 0.5
------ ------ ------ ------ ------ ------ ------
Total exports........ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
====== ====== ====== ====== ====== ====== ======
Source: Central Bank.
In 2001, Peru's most important imports consisted of:
o intermediate goods, such as fuels and raw materials for agricultural
and industrial production, valued at US$3.6 billion, representing
50.1% of total imports;
o capital goods, such as transportation and building equipment, valued
at US$1.9 billion, representing approximately 26.6% of total imports;
and
o consumer goods valued at US$1.6 billion, representing 21.8% of total
imports.
The following tables set forth further information regarding imports
for the years indicated.
Imports
(in millions of U.S. dollars, at current prices)
For the first 3 months
of:
--------------------
1997 1998 1999 2000 2001 2001 2002
--------- --------- --------- ---------- ---------- --------- ---------
Consumer goods:
Durable goods.................. US$ 803 US$ 738 US$ 506 US$ 587 631 US$ 146 US$ 142
Non-durable goods.............. 1,107 1,146 927 859 936 215 222
--------- --------- --------- ---------- ---------- --------- ---------
Total consumer goods......... 1,910 1,884 1,432 1,446 1,567 361 363
Intermediate goods:
Petroleum products, lubricants. 780 580 641 1,084 907 218 162
Raw materials for agriculture.. 202 204 186 214 232 59 57
Raw materials for manufacturing 2,454 2,602 2,179 2,357 2,467 610 583
--------- --------- --------- ---------- ---------- --------- ---------
Total intermediate goods..... 3,437 3,386 3,006 3,654 3,607 887 802
Capital goods:
Construction materials......... 244 215 199 211 169 47 66
For agriculture.............. 28 45 62 30 20 3 4
For manufacturing.............. 2,037 1,768 1,395 1,427 1,351 414 280
Transportation equipment....... 507 574 477 440 371 92 85
--------- --------- --------- ---------- ---------- --------- ---------
Total capital goods.......... 2,816 2,602 2,133 2,109 1,911 556 435
Other............................ 390 350 178 142 113 45 15
--------- --------- --------- ---------- ---------- --------- ---------
Total imports.............. US$ 8,553 US$ 8,222 US$ 6,749 US$ 7,351 US$ 7,198 US$ 1,848 US$ 1,616
========= ========= ========= ========== ========== ========= =========
Memorandum items:
Temporal admission imports(1) US$ 278 US$ 326 US$ 246 US$ 305 US$ 306 US$ 72 US$ 72
Imports into free trade
zones(2)................... 69 40 35 39 41 10 11
(1) Represents imports not subject to tariffs but which must be processed and
exported within a definite period of time.
(2) Imports through the Special Zone of Tacna (Zotac), which is primarily
dedicated to the assembly of motor vehicles. Peru has five free trade zones
but only the Tacna zone is actively producing.
Source: Central Bank.
Imports
(as a percentage of total imports, at current prices)
For the first 3
months of:
-------------------
1997 1998 1999 2000 2001 2001 2002
------ ------- ------- -------- ------- ------- -------
Consumer goods:
Durable goods...................... 9.4% 9.0% 7.5% 8.0% 8.8% 7.9% 8.8%
Non-durable goods.................. 12.9 13.9 13.7 11.7 13.0 11.6 13.7
------ ------- ------- -------- ------- ------- -------
Total consumer goods............. 22.3 22.9 21.2 19.7 21.8 19.5 22.5
Intermediate goods:
Petroleum products, lubricants..... 9.1 7.1 9.5 14.7 12.6 11.8 10.0
Raw materials for agriculture...... 2.4 2.5 2.8 2.9 3.2 3.2 3.5
Raw materials for manufacturing.. 28.7 31.6 32.3 32.1 34.3 33.0 36.1
------ ------- ------- -------- ------- ------- -------
Total intermediate goods......... 40.2 41.2 44.5 49.7 50.1 48.0 49.7
Capital goods:
Construction materials............. 2.9 2.6 2.9 2.9 2.3 2.5 4.1
For agriculture.................. 0.3 0.5 0.9 0.4 0.3 0.2 0.3
For manufacturing.................. 23.8 21.5 20.7 19.4 18.8 22.4 17.3
Transportation equipment........... 5.9 7.0 7.1 6.0 5.2 5.0 5.2
------ ------- ------- -------- ------- ------- -------
Total capital goods.............. 32.9 31.7 31.6 28.7 26.6 30.1 26.9
Other................................ 4.6 4.3 2.6 1.9 1.6 2.4 1.0
------ ------- ------- -------- ------- ------- -------
Total imports.................. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
====== ======= ======= ======== ======= ======= =======
Memorandum items:
Temporal admission imports(1).... 3.3 4.0 3.6 4.1 4.3 3.9 4.5
Imports into free trade zones(2). 0.8 0.5 0.5 0.5 0.6 0.5 0.7
(1) Represents imports not subject to tariffs but which must be processed and
exported within a definite period of time.
(2) Imports through the Special Zone of Tacna (Zotac), which is primarily
dedicated to the assembly of motor vehicles. Peru has five free trade zones
but only the Tacna zone is actively producing.
Source: Central Bank.
Geographic Distribution of Imports
(percentage of total imports, at current prices)
For the first 3
months of:
-------------------
1997 1998 1999 2000 2001 2001 2002
------ ------- ------- -------- ------- ------- -------
United States............. 31.9% 32.4% 31.6% 29.7% 30.1% 31.2% 28.5%
Canada.................... 2.8 2.3 2.0 2.5 1.4 1.5 1.1
Mexico.................... 3.2 2.9 2.7 2.9 2.6 2.5 2.8
------ ------- ------- -------- ------- ------- -------
Total North America..... 37.9 37.7 36.4 35.1 34.1 35.2 32.4
Brazil..........................4.1...... 4.2 3.9 4.4 3.9 4.0 4.7
Colombia........................4.2...... 3.2 4.7 4.7 4.0 4.0 4.4
Chile...........................5.6...... 5.6 6.7 7.1 8.0 7.3 8.1
Venezuela.......................4.4...... 3.3 4.4 4.8 4.0 3.1 3.6
Other...........................9.1...... 9.3 8.1 8.9 10.7 10.8 12.7
------ ------- ------- -------- ------- ------- -------
Total Latin America and
the Caribbean......... 27.4 25.6 27.9 29.9 30.5 29.1 33.5
United Kingdom............ 1.2 1.6 1.2 1.4 1.1 1.1 1.2
Switzerland............... 1.1 1.4 1.6 1.4 1.4 1.8 1.5
Germany................... 3.6 4.3 3.8 3.1 3.4 2.9 3.8
Spain..................... 8.5 7.4 7.5 9.2 8.8 7.2 6.5
Other..................... 8.5 9.3 8.7 7.6 7.5 7.9 7.5
------ ------- ------- -------- ------- ------- -------
Total Europe............ 23.0 24.0 22.7 22.7 22.1 20.9 20.5
Japan..................... 3.8 4.3 4.6 4.2 3.4 4.8 2.9
China..................... 1.4 1.3 1.7 1.8 1.9 1.7 2.6
Other..................... 5.3 5.8 5.3 5.2 6.3 6.0 7.1
------ ------- ------- -------- ------- ------- -------
Total Asia.............. 10.5 11.4 11.6 11.2 11.6 12.4 12.5
Africa and others......... 1.3 1.3 1.4 1.1 1.6 2.4 1.0
------ ------- ------- -------- ------- ------- -------
Total imports......... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
====== ======= ======= ======== ======= ======= =======
Source: Central Bank.
Services Trade
The Republic's services trade consists primarily of tourism,
telecommunications, freight services and financial services. Of these, the most
important is tourism. Tourism is the most important individual item driving
Peru's foreign currency earnings. The commerce, restaurants and hotel sectors,
as well as the construction and real estate services sectors, depend
significantly on tourism. From 1997 to 2001, growth in gross income from tourism
remained flat, with US$816 million, or 1.4% of GDP, recorded in 1997 and US$817
million, or 1.5% of GDP, recorded in 2001. In 1998, gross income from tourism
increased 3.6%, as compared to the level registered for 1997, despite the
adverse effects of El Nino on the Republic's infrastructure and economy. In
2000, gross income from tourism increased by 2.4%, as compared to the level
registered in 1999, despite the Republic's political crisis. In 2001, net income
from tourism decreased by 40.9%, as compared to 2000, as a result of
recessionary conditions abroad and the effects of September 11, 2001.
In 2001, the Republic attracted visitors principally from the United
States (23.0%), Chile (15.4%), Argentina (4.5%) and France and England (9.0%).
Tourism Statistics
For the
three months
ended
March, 21
1997 1998 1999 2000 2001 2002
------- ------- ------- ------ ------- ------
Foreign non-resident arrivals(1)........ 746,599 819,530 943,917 1,026,867 1,009,512 258,117
Average length of stay (number of
nights)(2)........................... 8.1 9.3 10.3 10.1 N/A N/A
Hotel activity:
Number of rooms available*........... 93,606 98,375 104,474 114,581 118,823 118,823
Occupancy rate by total number of
rooms available (in %)(3).......... 32.3% 29.9% 28.7% 27.2% 25.4% 23.7%
Aggregate value of hotels and
restaurants
(as % of GDP)..................... 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Income from tourism (in millions of
US$)(4)............................ US$816 US$845 US$890 US$911 US$817 US$188
Expenses from tourism (in millions of
US$)(5)............................ (434) (452) (443) (530) (592) (160)
------- ------- ------- ------ ------- ------
Balance (income less expenses, in
millions of US$)................. US$382 US$393 US$447 US$381 US$225 US$28
======= ======= ======= ====== ======= ======
(1) Preliminary estimates.
(2) Represents an average calculated on the basis of a survey of arriving
foreign non-residents.
(3) Preliminary figures.
(4) Represents amounts spent by foreigners in Peru.
(5) Represents amounts spent by Peruvians abroad.
(*) Preliminary estimates for 2001 and March 2002.
N/A = Not Available.
Source: Direccion General de Migraciones y Naturalizacion, or Office of
Migration and Naturalization, Central Bank, MITINCI and INEI.
Foreign Direct Investment
Peru has an open investment regime and a legal framework that generally
promotes and protects foreign investment. The basis of this open investment
regime was established in 1991 through the Foreign Investment Promotion Act, the
Private Investment Growth Framework Act and Legislative Decree No. 662.
Legislative Decree No. 622 allows both foreign and domestic investors to enter
into legal stability agreements with the Government. For a description of these
measures, see "The Economy--Privatization and Role of the State in the Economy."
Peru attracted more than US$11.6 billion in foreign direct investment
between 1990 and 2001. As of March 2002, approximately US$11.9 billion in
foreign funds were directly invested in the Peruvian economy. This high level of
foreign investment is a result of various factors, including:
o the relative social and political stability achieved between 1994 and
1998 that resulted from the Fujimori administration's successful
campaign against subversive movements and the peace settlement reached
with Ecuador in 1998;
o the continued erosion of protectionist and interventionist policies
through a reduction in tariffs, simplification of the tax system and
the elimination of subsidies; and
o the influx of foreign capital in connection with the Government's
privatization program.
Foreign direct investment (excluding privatizations) increased 84% in
2001 to US$796 million, as compared to the level registered for 2000. This
increase was a result of greater investor confidence in light of the increased
political stability during 2001. Foreign investments related to privatizations
increased 16.6% in 2001 to US$267 million, as compared to the level registered
for 2000, as a result of the Government's sale of remnant shares in companies
already privatized. During 2001, the Republic consummated 14 privatizations and
concession grants for US$255 million and that generated US$97 million in
additional investment.
For the first three months of 2002, foreign direct investment
(excluding privatizations) totaled US$224 million, a US$30 million increase over
the level registered for the same period of 2001, due to an increase in the
level of investment in the hydrocarbons sector. For 2002, the Republic expects
foreign direct investment to total US$1.01 billion and concession receipts to
total approximately US$265 million.
The main recipients of foreign direct investment in recent years have
been the telecommunications, mining, energy, industry and finance sectors.
The following table sets forth information on the stock of foreign
direct investment registered with PROINVERSION or its predecessor by sector for
the years indicated. The stock of foreign direct investment refers to the level
of foreign funds directly invested in the Peruvian economy as of the dates
indicated and does not reflect investment flows.
Registered Stock of Foreign Direct Investment by Sector(1)
(in millions of U.S. dollars and as a percentage of the total
accumulated stock of foreign direct investment, at current prices)
As of
As of December 31, March 31,
--------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002(2)
------------ ------------- -------------- -------------- ------------ --------------
US$ % US$ % US$ % US$ % US$ % US$ %
----- ----- ------- ----- ------- ------ ------- ----- ------ ---- ------ -----
Agriculture......... 8 0 26 0 42 0 44 0 44 0 44 0
Commerce............ 445 6 545 7 557 6 814 8 817 8 830 8
Telecommunications.. 2,025 28 2,099 26 2,354 25 2,638 26 2,638 25 2,784 26
Construction........ 32 0 43 1 52 1 56 1 67 1 70 1
Energy.............. 1,283 18 1,383 17 1,533 16 1,553 15 1,568 15 1,509 14
Finance............. 786 11 931 12 1,421 15 1,473 14 1,663 16 1,647 16
Industry............ 1,250 17 1,369 17 1,495 16 1,541 15 1,542 15 1,566 15
Mining.............. 1,231 17 1,372 17 1,653 17 1,688 17 1,691 16 1,692 16
Fishing............. 1 0 1 0 1 0 1 0 1 0 1 0
Petroleum........... 98 1 98 1 98 1 98 1 98 1 98 1
Services............ 72 1 88 1 104 1 118 1 130 1 138 1
Forestry............ 1 0 1 0 1 0 1 0 1 0 1 0
Transportation...... 17 0 82 1 82 1 93 1 106 1 119 1
Tourism............. 36 1 42 1 58 1 58 1 58 1 58 1
Housing............. 10 0 11 0 13 0 14 0 15 0 15 0
----- ----- ------- ----- ------- ------ ------- ----- ------ ---- ------ -----
Total............. 7,295 100 8,081 100 9,464 100 10,190 100 10,438 100 10,571 100
===== ===== ======= ===== ======= ====== ======= ===== ====== ==== ====== =====
(1) Principal foreign direct investment with privatization, as registered with
CONITE. Foreign direct investment figures for balance-of-payments purposes
reflect inflows and outflows of capital for a particular period and are
compiled by the Central Bank. CONITE and the Central Bank employ different
methodologies when calculating foreign direct investment; CONITE considers
only shareholder capital, while the Central Bank includes additional
elements.
(2) Preliminary data.
Source: CONITE, PROINVERSION.
Foreign direct investment in Peru has come primarily from Spain, the
United States and the United Kingdom, which, combined, accounted for
approximately 66.3%, on average, of total foreign direct investment that entered
Peru each year from 1997 to 2001.
The following tables set forth information on the stock of foreign
direct investment by country of origin, as a percentage of total foreign direct
investment, as registered with PROINVERSION or its predecessor, for the periods
indicated.
Registered Stock of Foreign Direct Investment by Country of Origin
(in millions of U.S. dollars, at current prices)
As of December 31, As of March 31,
----------------------------------------------------------------------- ------------
1997 1998 1999 2000 2001 2002
------------ ------------ ------------ ----------- ----------- -----------
Argentina..................US$ 105.2 US$ 142.0 US$ 62.6 US$ 65.1 US$ 65.1 US$ 65.1
Austria.................... 3.4 3.4 3.4 3.4 3.4 3.4
Bahrain.................... 25.0 25.0 25.0 25.0 25.0 25.0
Bolivia.................... 4.7 4.7 4.7 4.7 4.7 4.7
Brazil..................... 38.7 39.8 54.6 54.9 55.2 55.2
Canada..................... 119.9 150.6 157.9 159.3 159.3 159.3
Chile...................... 291.3 324.1 423.3 440.5 552.3 555.7
China...................... 122.2 122.2 122.2 122.2 122.2 122.2
Colombia................... 29.4 62.8 71.5 71.7 79.0 79.0
Denmark.................... 0.7 0.7 0.7 0.7 0.7 0.7
Ecuador.................... 22.1 22.3 31.9 35.5 35.5 35.5
France..................... 60.6 64.6 147.2 198.7 235.2 235.2
Germany.................... 40.1 44.6 57.3 67.1 84.1 94.1
Italy...................... 33.0 33.0 33.0 37.7 45.5 50.3
Japan...................... 42.7 45.0 71.8 99.1 99.1 99.1
Korea...................... 7.5 9.5 19.5 20.7 20.7 20.7
Liberia.................... 0.8 0.8 0.8 0.8 0.8 0.8
Liechtenstein.............. 17.6 12.8 15.8 13.9 13.9 13.9
Luxembourg................. 16.1 22.2 22.2 22.2 26.1 26.1
Mexico..................... 10.6 30.3 32.7 34.1 36.1 36.1
Netherlands................ 494.5 510.1 601.4 818.4 922.0 868.8
New Zealand................ 3.5 3.5 6.9 6.9 6.9 6.9
Panama..................... 500.0 520.9 539.5 541.3 544.1 544.2
Rumania.................... 3.5 3.5 3.5 3.5 3.5 3.5
Spain...................... 2,361.7 2,396.2 2,420.4 2,433.5 2,433.5 2,424.5
Sweden..................... 43.5 46.4 46.6 59.6 56.9 56.9
Switzerland................ 181.0 185.0 200.3 206.3 208.3 213.6
United Kingdom............. 1,003.3 1,293.9 2,043.7 2,249.6 2,309.8 2,465.3
United States.............. 1,492.6 1,668.8 1,927.3 2,066.6 1,960.2 1,962.9
Uruguay.................... 81.9 110.9 119.2 127.5 127.5 142.5
Venezuela.................. 10.2 10.7 10.5 10.2 10.2 10.2
Other...................... 127.8 179.7 187.1 189.1 190.0 190.0
------------ ------------ ------------ ----------- ----------- -----------
Total.................. US$ 7,280.3 US$ 8,080.9 US$ 9,455.2 US$10,164.5 US$10,553.4 US$10,571.2
============ ============ ============ =========== =========== ===========
Source: CONITE, PROINVERSION.
Registered Stock of Foreign Direct Investment by Country of Origin
(as a percentage of total direct investment, at current prices)
As of December 31, As of March 31,
----------------------------------------------------------------------- ------------
1997 1998 1999 2000 2001 2002
------------ ------------ ------------ ----------- ----------- -----------
Argentina................. 1.5% 1.8% 0.7% 0.6% 0.6% 0.6%
Austria................... 0.1 0.0 0.0 0.0 0.0 0.0
Bahrain................... 0.3 0.3 0.3 0.3 0.2 0.2
Bolivia................... 0.1 0.1 0.1 0.1 0.0 0.0
Brazil.................... 0.5 0.5 0.6 0.5 0.5 0.5
Canada.................... 1.7 1.9 1.7 1.6 1.5 1.5
Chile..................... 4.0 4.0 4.5 4.4 5.3 5.3
China..................... 1.7 1.5 1.3 1.2 1.2 1.2
Colombia.................. 0.4 0.8 0.8 0.7 0.8 0.8
Denmark................... 0.0 0.0 0.0 0.0 0.0 0.0
Ecuador................... 0.3 0.3 0.3 0.4 0.3 0.3
France.................... 0.8 0.8 1.6 2.0 2.2 2.2
Germany................... 0.6 0.6 0.6 0.7 0.8 0.9
Italy..................... 0.5 0.4 0.4 0.4 0.4 0.5
Japan..................... 0.6 0.6 0.8 1.0 0.9 0.9
Korea..................... 0.1 0.1 0.2 0.2 0.2 0.2
Liberia................... 0.0 0.0 0.0 0.0 0.0 0.0
Liechtenstein............. 0.2 0.2 0.2 0.1 0.1 0.1
Luxembourg................ 0.2 0.3 0.2 0.2 0.3 0.3
Mexico.................... 0.2 0.4 0.4 0.3 0.3 0.3
Netherlands............... 6.7 6.2 6.3 7.7 8.2 8.2
New Zealand............... 0.1 0.0 0.1 0.1 0.1 0.1
Panama.................... 6.9 6.5 5.7 5.3 5.2 5.2
Rumania................... 0.1 0.0 0.0 0.0 0.0 0.0
Spain..................... 32.4 29.5 25.5 23.9 23.0 22.9
Sweden.................... 0.6 0.6 0.5 0.6 0.5 0.5
Switzerland............... 2.5 2.3 2.2 2.1 2.0 2.0
United Kingdom............ 13.8 16.1 21.7 22.2 23.3 23.3
United States............. 20.5 20.6 20.4 20.4 18.6 18.6
Uruguay................... 1.1 1.4 1.3 1.3 1.4 1.4
Venezuela................. 0.1 0.1 0.1 0.1 0.1 0.1
Other..................... 1.8 2.2 2.0 1.9 1.8 1.8
------------ ------------ ------------ ----------- ----------- -----------
Total................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
- --------------------------------
Source: CONITE, PROINVERSION.
Portfolio Investment
The Republic experienced portfolio capital inflows of US$156 million in
1997. The Republic, however, experienced portfolio capital outflows of US$346
million in 1998 and US$107 million in 1999 as a result of the adverse effects
that the Asian and Russian financial crises and the devaluation of the Brazilian
real in 1999 had on investment in emerging markets. In 2000, capital inflows
increased to US$123 million despite the Republic's political instability,
principally as a result of Telefonica del Peru's repurchase of its own ADRs. To
discourage speculative capital from entering the country, the Central Bank has
established a marginal minimum reserve requirement of 20% on new foreign
currency deposits, those deposited within the current year, in Peruvian banks.
In 2001, capital inflows decreased to US$43 million, primarily due to purchases
by non-Peruvians of stock of Compania de Minas Buenaventura S.A.A. and Empresa
Minera Iscaycruz S.A., which were partially offset by sales of stock of Union de
Cervecerias Peruanas Backus y Johnston S.A.A. and Cementos Lima S.A.
THE MONETARY SYSTEM
Central Bank
Established in 1922, the Central Bank serves as the monetary authority
of the Republic. The Bank exists and operates pursuant to Chapter V of the 1993
Constitution and the Ley Organica del Banco Central de Reservas del Peru enacted
that same year, which we refer to in this prospectus as the "Central Bank's
Charter." The 1993 Constitution and the Central Bank's Charter vest with the
Central Bank authority to control the monetary base, manage the Republic's
international reserves and gather and publish data on the Republic's finances.
The Central Bank is also the sole issuer of Peruvian currency.
The Central Bank is headed by a board of directors, which we refer to
in this prospectus as the "Central Bank's Board," composed of seven members who
each serve five-year terms that are coterminous with the Peruvian President's
term. Congress appoints three of the Central Bank's directors, and the President
appoints four, including the president of the Central Bank's Board. Appointment
of the president of the Central Bank's Board is subject to ratification by
Congress. The Central Bank's Charter requires the members of the Central Bank's
Board to have extensive experience and knowledge in economics and finance. The
responsibilities of the Central Bank's Board include formulating a monetary
program setting forth liquidity and monetary base growth rates consistent with
its inflation objectives and the Republic's growth assumptions.
The day-to-day operations of the Central Bank are under the supervision
of its General Manager and a Money and Foreign Exchange Committee. This
committee meets daily to decide on monetary operations, such as the amount of
dollars to be purchased in the foreign exchange market, whether to auction
Central Bank certificates of deposit, and the interest rate that the Central
Bank will charge on short term credits, generally known as the discount rate.
Reform of the Central Bank and of the Republic's monetary policy has
been a centerpiece of the Republic's economic program that began in the early
1990s. These reforms were premised on the following two key elements that were
promulgated under the 1993 Constitution and the Central Bank's Charter:
o the Central Bank's principal purpose is to maintain price
stability by preserving the value of the currency; and
o the Central Bank possesses full autonomy.
These reforms were implemented to address the high rates of inflation
that Peru, along with other countries in the region, experienced during the
1980s and early 1990s. The premise underlying these reforms was that the Central
Bank could contribute most effectively to economic prosperity by focusing its
activities on achieving stable prices. Prior to the 1991-1993 reforms, the
Central Bank operated under a much broader mandate that made it directly
responsible for fueling growth and for establishing credit and exchange rate
conditions. Pursuit of these broader and occasionally incompatible objectives
resulted in erratic policy choices that exacerbated adverse economic conditions
and contributed to the hyperinflation experienced in the late 1980s and early
1990s.
The Central Bank was granted autonomy based on the premise that, to
operate effectively, the Central Bank has to be immune from political pressures.
In the past, the Central Bank had often been required to pursue ill-advised
policies, such as printing currency in order to finance public spending, as a
result of government intervention. Since the reforms were implemented, technical
rather than political management of the Republic's monetary policy has built
confidence in the Government's ability to formulate and implement a sound and
stable monetary policy.
The 1993 Constitution and the Central Bank's Charter guaranteed the
autonomy of the Central Bank by prohibiting it from:
o providing financing to the public sector, except indirectly
through limited purchases of treasury bonds;
o issuing guarantee certificates, surety bonds or any other kind of
guarantees, using any other form of indirect financing, or
providing insurance of any kind;
o imposing sectoral or regional ratios on the composition of the
loan portfolios of financial institutions; and
o establishing multiple currency exchange regimes.
The reform of the Central Bank's role has been instrumental in the
drastic drop in inflation experienced during the 1990s. Between 1994 and 2000,
the Central Bank met or slightly exceeded its annual inflation targets. During
2001, the Central Bank maintained a restrictive monetary policy that produced a
marked deceleration in the CPI, which averaged 2.0%. This record has served to
foster confidence in the stability of the Peruvian currency.
Monetary Policy
The Central Bank's overarching goal is to maintain a stable monetary
environment, with low levels of inflation. Accordingly, the Central Bank
establishes a target inflation rate for each fiscal year and has, since 1994,
announced this target rate in order to shape market expectations.
The Central Bank has chosen as its main variable for maintaining price
stability the growth rate of the monetary base. Accordingly, subject to
occasional intervention by the Central Bank in the foreign exchange market to
prevent drastic exchange rate fluctuations, both exchange rates and interest
rates are allowed to float freely according to market conditions. The Central
Bank establishes an annual target growth rate for the monetary base based on
Peru's projected GDP and inflation rate. In order to control the growth rate of
the monetary base, the Central Bank monitors and regulates the daily level of
liquidity of the banking system, which it tracks by monitoring the average level
of bank deposits held at the Central Bank. These deposits are used for the
Republic's clearing system, and are also used by banks for the payment of taxes,
and by Banco de la Nacion to make payments on behalf of the Republic.
Accordingly, they provide a fairly accurate picture of the daily level of
liquidity of the banking system.
The Central Bank establishes a target range for bank deposits held at
the Central Bank, which it adjusts and publishes on a monthly basis. The Central
Bank employs several tools to ensure that the actual level of bank deposits
falls within its specified target. These tools fall into three major categories:
o open market operations, which include:
- auctions to financial institutions of Central Bank
certificates of deposit;
- temporary purchases of Central Bank certificates of deposits
and of treasury bonds;
- auctions to financial institutions of monies owned by Banco
de la Nacion; and
- purchases and sales of foreign currencies in the interbank
market;
o discount-window transactions, which include:
- monetary regulation loans, generally known as rediscounts,
which consist of short-term loans made directly by the
Central Bank to financial institutions to cover their
short-term liquidity needs;
- overnight foreign currency swaps that allow the Central Bank
to provide financial institutions with short-term liquidity;
and
- remunerated overnight deposits in the Central Bank, in both
domestic and foreign currency, which allow the Central Bank
to remove excess liquidity from the banking system; and
o minimum reserve requirements.
Currently, the minimum reserve requirement for local currency deposits
is 6%. New foreign currency deposits, those deposited within the current
calendar year, are subject to a 20% marginal rate, while foreign currency
deposits placed in prior years are subject to the reserve rate applicable in the
year they were deposited. Currently, 33%, on average, of total foreign currency
deposits must be kept as reserves. The Central bank generally adjusts the
marginal rate applicable to foreign currency deposits, but may from time to time
adjust the average rate as a tool of monetary policy. Financial institutions may
satisfy the minimum reserve requirements with funds they hold in cash or cash
equivalents or that they have deposited in their accounts at the Central Bank,
so long as they maintain at least 1% of local and foreign currency deposited in
the Central Bank.
The Central Bank increasingly relies on open market operations to
regulate the liquidity of the banking system and promotes the perception of the
Central Bank as a lender of last resort by imposing above-market rates and
commissions on discount-window transactions.
The significant volatility of short-term capital flows has been a
destabilizing factor in Peru's monetary system. Between 1997 and 2001,
short-term capital fluctuated between a high of US$2.6 billion, or 4.5% of GDP,
of inflows in 1997 to US$1.7 billion, or 3.2% of GDP, of outflows in 1999. In
contrast, medium- and long-term capital remained relatively stable between 1997
and 1998, with levels at US$1.1 billion and US$1.0 billion respectively, and
from 1999 to 2001, fluctuating between a high of US$542 million, or 1.1% of GDP,
of inflows in 1999 to a low of US$439 million, or 0.8% of GDP, of inflows in
2001. To confront the volatility of short-term capital flows, the Central Bank
generally prescribes high foreign currency reserve requirements that discourage
significant capital outflows and promote holdings of local currency.
Despite the positive impact it may have on reducing cross-border
transaction costs and in preserving purchasing power, the high level of
dollarization of the Peruvian economy has also hampered monetary policy by
undermining the Central Bank's ability to control the money supply.
Dollarization generally refers to the degree to which the U.S. dollar has
displaced Peru's domestic currency in the economy. Dollarization began during
the 1980s as inflation rates started to rise. As inflation reached triple-digit
rates between 1983 and 1985, foreign currency-denominated assets were
increasingly used to store value. By 1990, when the annual inflation rate had
reached 7,650%, 47% of total deposits in the domestic financial system, and 76%
of total deposits held by Peruvians domestically and abroad, were denominated in
dollars. During the 1990s, the Peruvian economy remained highly dollarized. As
of March 31, 2002, dollar-denominated deposits equaled 66% of total domestic
deposits and dollar-denominated assets rose to 54% of total assets held by
Peruvians.
Mitigating the impact that dollarization has had on monetary policy is
the fact that domestic currency has retained its role as the principal means of
payment, while foreign currency has been used primarily as a savings mechanism.
The continued demand for local currency in the vast majority of transactions
that take place in the Peruvian economy has preserved local currency as the main
channel through which the Central Bank can affect aggregate demand and thus
control inflation. The Central Bank expects that as it continues to meet its
inflation targets, confidence in the value of the local currency will grow,
gradually restoring the nuevo sol as the principal means of savings.
Supervision of the Financial System
Established in 1931, the Superintendencia de Banca y Seguros, or
Banking and Insurance Superintendency, which we refer to in this prospectus as
the "SBS," is responsible for regulating and supervising the financial,
insurance and private social security systems in Peru. Since 1979, the SBS has
had institutional autonomy from the Ministerio de Economia y Finanzas, which we
refer to in this prospectus as the "Ministry of Economy." In 1981, the first Ley
Organica de la Superintendencia de Banca y Seguros, or Banking and Insurance
Superintendency Charter, was adopted, which outlined in greater detail the
powers and functions of the SBS. The role of the SBS was expanded in 2000 when
it was given jurisdiction over the private social security system.
The overarching goal of the SBS is to protect the interests of
customers, depositors and beneficiaries of the financial, insurance and private
social security systems, by ensuring the solvency and integrity of the companies
that operate in this sector. In recent years, the SBS has pursued this goal from
a free-market perspective, stepping away from the interventionist model that
characterized the financial industry until the early 1990s. Accordingly, it has
sought to create incentives for financial institutions to manage adequately
their levels of risk, while imposing minimum standards to ensure that the
integrity and solvency of the industry are not jeopardized.
Under current banking law, and the regulatory norms and guidelines
adopted by the SBS, financial institutions are subject to the following three
basic types of regulations:
o Market-entry requirements designed to ensure that the regulated
entities have minimal capital levels to conduct their business
and are otherwise reliable financial agents. In particular, the
SBS requires that financial institutions have a capital base of
no less than US$7.0 million and be managed by competent teams
composed of persons of high integrity, aptitude and expertise in
their particular fields.
o Prudential standards designed to ensure that the quality of the
financial system's loan portfolio meets minimum levels. These
prudential standards include the following requirements:
- Strict limits on credit concentration. Financial
institutions may not lend an amount equal to or greater than
10% of their capital to any single person or entity. This
limit may be raised to 30% depending on the kind of
guarantee or security offered. Additionally, financial
institutions may not lend more than 5% to any single person
or entity residing abroad. This limit may be raised to 10%
depending on the kind of guarantee or security offered. The
1996 Banking Law also prescribes special limits for
particular kinds of credits, such as loans to affiliates and
other financial institutions, foreign and domestic.
- Capital adequacy ratios. The risk-weighted assets of
financial institutions may not exceed eleven times their net
worth--a stricter standard than the Basel Accord guidelines.
- Loan-loss reserve requirements that are strictly enforced.
These requirements range from a minimum 1% reserve for loans
with normal risk levels, to a maximum 100% reserve for loans
that are being recovered in court, which must be treated as
a loss.
o Disclosure requirements designed to provide regulators, economic
agents in other sectors of the economy and the public, with
sufficient information to evaluate the activities of financial
institutions. The principal requirements are as follows:
- Banks must register their shares on the Bolsa de Valores de
Lima, which we refer to in this prospectus as the "Lima
Stock Exchange," and thereby become subject to the
disclosure guidelines established by the Comision Nacional
Supervisora de Empresas y Valores, or National Supervisory
Commission of Companies and Securities, which we refer to in
this prospectus as "CONASEV."
- Banks are required to publish their quarterly financial
statements in major newspapers.
- CONASEV must publish each month an assessment of the loan
portfolio quality of banks.
- The credit risk of banks must be assessed every semester by
two credit rating agencies, and these ratings must be
published in major newspapers.
With respect to loan-loss reserve requirements, current regulations
base the risk classification of outstanding credits primarily on the number of
days a particular credit is past due. However, for commercial loans, a bank may
also take into consideration the debtor's level of solvency, economic trends in
the debtor's line of business and the quality of the debtor's management and
control systems. Additionally, guarantees or collateral may affect the specific
level of reserves that must be maintained with respect to a particular credit.
Set forth below is the risk-classification scheme mandated by the SBS:
Risk Category Criteria
- ---------------------- ------------------------------------------------------
Normal:
Commercial loans......... 0 days past due, high solvency,
growing economic sector, adequate management and
control systems.
Consumer loans.......... Up to 8 days past due.
Mortgage loans.......... Up to 30 days past due.
Potential problems:
Commercial loans........ Based on cash flow analysis the
company is able to fulfill all of its financial
obligations, exhibits moderate solvency and adequate
management and control systems, but is part of a
temporarily destabilized economic sector.
Consumer loans.......... 9 to 30 days past due.
Mortgage loans.......... 31 to 90 days past due.
Deficient:
Commercial loans........ 60 to 120 days past due, moderate to
low solvency, unclear tendency in economic sector,
inadequate management and control systems.
Consumer loans.......... 31 to 60 days past due.
Mortgage loans.......... 91 to 120 days past due.
Doubtful:
Commercial loans........ 121 to 365 days past due, low
solvency, falling revenues in economic sector,
inadequate management and control systems.
Consumer loans.......... 61 to 120 days past due.
Mortgage loans.......... 121 to 365 days past due.
Loss:
Commercial loans........ More than 365 days past due, debtor
insolvent, structural problems in economic sector,
inadequate management and control systems.
Consumer loans.......... More than 120 days past due.
Mortgage loans.......... More than 365 days past due.
- --------------------------
Source: SBS.
The following table sets forth the required loan-loss reserves
currently in effect:
Required Loan-Loss Reserves by Risk Category
(as a percentage of total portfolio)
Loan-loss reserve
-------------------------------------------------------------------------------
With liquid guarantees With guarantees Without guarantees
---------------------- ---------------------- ----------------------
Normal:
Fixed.................... 0.75% 0.75% 0.75%
Variable(1) ............. 0.25 0.25 0.25
Potential problems:
Fixed.................... 0.75 1.25 3.75
Variable(1).............. 1.75 1.25 1.25
Deficient................... 12.5 12.5 25.0
Doubtful.................... 30.0 30.0 60.0
Loss........................ 60.0 60.0 100.0
- ------------------
(1) If profits are above a maximum level, the variable rate is added to the
fixed rate.
Source: SBS.
The following tables set forth information regarding loans of the
financial system by risk category and type of institution and loans issued by
commercial banks by risk category and type of loan.
Risk Classification of Aggregate Assets of the Financial System
by Type of Institution
(as a percentage of total loans, as of March 31, 2002)
Savings and loans
associations Small-business Financial
Commercial Financial ----------------------- development leasing
Risk category banks institutions Municipal Rural banks companies Total
- -------------------- ---------- ----------- --------- ----------- ------------- ------------ -----------
Normal.............. 69.0% 80.8% 82.7% 59.4% 76.9% 57.9% 68.9%
Potential problems.. 11.7 7.9 6.6 6.5 11.1 24.0 12.1
Deficient........... 8.0 4.0 4.3 17.6 3.6 8.3 7.9
Doubtful............ 5.9 1.4 1.8 5.3 2.7 8.4 5.8
Loss................ 5.4 5.9 4.6 11.2 5.8 1.5 5.3
---------- ----------- --------- ----------- ------------- ------------ -----------
Total............ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========== =========== ========= =========== ============= ============ ===========
- -------------
Source: SBS.
Risk Classification of Aggregate Assets of Commercial Banks
by Type of Loan
(as a percentage of total loans, as of March 31, 2002)
Risk category Commercial loans Consumer loans Mortgage loans Small-business loans
- -------------------- ---------------- -------------- -------------- --------------------
Normal............... 66.4% 82.2% 82.9% 76.9%
Potential problems... 12.9 5.4 6.0 5.4
Deficient............ 8.9 3.7 2.3 5.3
Doubtful............. 6.5 2.3 2.9 3.7
Loss................. 5.3 6.3 5.9 8.8
-------------------- ---------------- -------------- -------------- --------------------
Total.............. 100.0% 100.0% 100.0% 100.0%
================ ============== ============== ====================
- --------------------------
Source: SBS.
The following table sets forth the status of loans in the financial
system.
Status of Loans in the Financial System
(as a percentage of total loans, as of March 31, 2002)
Current loans Refinanced and Loans 1 - 4 Loans > 4 Loans
----------------------- restructured months past months past subject to
Type of institution Short-term Long-term loans due due due judicial process
- -------------------------------- ------------ ---------- -------------- -------------- ----------- ----------------
Commercial banks................. 52.7% 30.4% 7.8% 1.6% 2.0% 5.4%
Financial institutions........... 44.8 38.0 10.9 1.7 1.8 2.8
Savings and loans associations:
Municipal...................... 57.3 34.6 2.0 2.0 0.6 3.4
Rural.......................... 48.7 20.8 17.1 4.7 2.0 6.6
Small-business development banks. 51.5 36.9 2.3 3.8 3.1 2.4
Financial leasing companies...... 1.5 80.2 9.4 2.3 3.3 3.4
------------ ---------- -------------- -------------- ----------- ----------------
Total.......................... 49.1% 34.1% 7.9% 1.7% 2.1% 5.1%
============ ========== ============== ============== =========== ================
- --------------------------
Source: SBS.
The SBS performs its supervisory role in the following two principal
manners:
o Direct supervision of regulated entities through on-site and
off-site inspections. The SBS systematically reviews and analyzes
the information that financial companies are required to
disseminate through the media and CONASEV. Based on these
inspections, the SBS conducts on-site inspections that focus on
areas that merit further scrutiny.
o Assessments made by third parties. The SBS regularly reviews the
analyses of regulated entities conducted by auditors, foreign and
domestic credit-rating agencies, and other supervisory agencies,
both foreign and domestic. These reviews allow the SBS to gain a
broader perspective of the activities and performance of the
Peruvian financial sector and to identify areas of concern.
In 1991, the Republic introduced the Fondo de Seguros de Depositos,
which we refer to in this prospectus as the "Deposit Insurance Fund," which
insures deposits in the banking system up to S/. 66,572, or US$18,000, per
person per bank. The introduction of the Deposit Insurance Fund ameliorated some
of the burdens created by the several closures of deficient banks that resulted
from the banking reforms undertaken by the Republic in the early 1990s. There
have been no significant bank failures or bailouts since December 2000.
Financial Sector
Prior to 1990, the Republic's regulation of the financial system was
characterized by interventionist measures that limited and directed the
activities of banks, restricted foreign competition and prevented profit
remittances and credit payments abroad. This regulatory environment undermined
competition in the financial industry and limited the supply of medium- and
long-term credit.
As part of its economic program, the Fujimori administration undertook
an overhaul of the Republic's financial system. Its first measures included the
liberalization of interest rates and the elimination of exchange rate controls.
In 1996, Congress passed the Ley de Bancos, which we refer to in this prospectus
as the "1996 Banking Law," which introduced the Deposit Insurance Fund, adopted
a policy of nondiscrimination among foreign and national banks, and state and
private banks, and opened the financial market to foreign banks and insurance
companies. The 1996 Banking Law also liberalized market-entry barriers for
domestic banks and tightened prudential standards and disclosure requirements.
These and other reforms adopted by the Fujimori administration fueled
significant growth of the financial sector. In 1990, there were 38 financial
institutions operating in Peru, with only one foreign bank. As of March 31,
2002, the Peruvian financial system was composed of 68 financial institutions,
including:
o 15 commercial banks;
o 14 municipal and 12 rural savings and loan associations;
o 13 small-business development banks;
o five consumer credit organizations;
o seven leasing companies; and
o two state-owned banks (not counting the Central Bank), Banco de
la Nacion and the Corporacion Financiera de Desarrollo, which we
refer to in this prospectus as "COFIDE."
Of the 15 commercial banks in operation, 13 were partly foreign-owned
and in 10 of these, foreigners had a majority equity stake. Other participants
in the financial sector included, as of March 31, 2002, 16 insurance companies
and four private pension funds.
Established in 1966, Banco de la Nacion is a state-owned bank that
offers a variety of services to the public sector, including regional and local
governments. These services include:
o collecting taxes on behalf of various governmental agencies;
o making payments and transfers on behalf of the Government;
o serving as paying and centralized collection agent for the
Republic's internal indebtedness and its medium- and long-term
external indebtedness; and
o providing banking and foreign exchange services in connection
with the Government's foreign trade transactions.
Established in 1971, COFIDE is a state-owned development bank that
since 1991 has specialized in providing credit to the financial sector. Through
such credits, COFIDE is expected to promote private sector credit for the
various sectors of the economy. Additionally, COFIDE administers various special
development funds created by the Government, such as the mortgage fund
Mivivienda.
The following table identifies the percentage of loans and deposits
corresponding to each category of financial institution as of the dates
indicated.
Percentage of Loans and Deposits
As of March 31, 2002
---------------------------
Type of institution Loans Deposits
- ----------------------------------- ------------ ------------
S/. US$ S/. US
------ ----- ------ -----
Rural savings and loans............. 0.9% 0.4% 0.5% 0.3%
Municipal savings and loans......... 6.0 0.6 2.4 1.5
Leasing companies................... 1.2 7.1 0.0 0.0
Consumer credit organizations....... 6.5 0.5 4.5 0.0
Commercial banks.................... 69.5 76.7 80.5 94.6
Small business development banks.... 1.0 0.2 0.0 0.0
State-owned banks................... 15.0 14.4 12.1 3.6
------------ ------------
Total............................. 100.0% 100.0% 100.0% 100.0%
============ ============
- --------------------------------
Source: SBS.
The following table shows the Number of fnancial institutions and the
percentage interest in total assets of the financial system held by each
category of financial institution as of the dates indicated.
Number of Financial Institutions
and Share of Total Assets of the Financial System
Number of Institutions Share of Total Assets
- --------------------------------------------------------------------------------------------------------------------------
As of December 31, As of
----------------------------------------------- March 31, As of March 31,
1997 1998 2002 2000 2001 2002 2002
---- ---- ---- ---- ---- ---- ----
Type of institution
Rural savings and loans............ 16 15 13 12 12 12 0.5%
Municipal savings and loans........ 13 13 13 13 14 14 1.7
Leasing companies.................. 9 9 9 7 7 7 3.2
Consumer credit organizations...... 7 7 5 5 5 5 1.4
Commercial banks................... 25 26 20 18 15 15 79.4
Small business development banks... 1 7 7 10 13 13 0.3
State-owned banks.................. 3 3 3 3 2 2 13.6
-------------------------------------------------------------------------------------
Total........................... 74 80 70 68 68 68 100.0%
======================================================================================
- --------------------------------
Source: SBS.
The Peruvian financial system grew only 0.8%, measured in current U.S.
dollars, between 1997 and 1998, and contracted 13.4%, measured in current U.S.
dollars, between 1998 and 2000, as reflected by the total level of assets.
Contraction continued in 2001 with a 7.7% decrease, measured in current U.S.
dollars, compared to 2000. The growth experienced between 1997 and 1998 was
possible because of the growth of the economy as a whole and the liberalization
of the financial system. The contraction since 1998 was caused primarily by
external financial shocks, such as the Asian and Russian financial crises, and
the resulting economic crisis that led to a reduction in the extension of
credit. The contraction in 2001 was caused primarily by the Argentina financial
crisis and the events of September 11, 2002, which led to a reduction in the
extension of credit. Overall, from 1997 to 2001, total assets of the financial
system contracted 19.4%, measured in current U.S. dollars. For the first three
months of 2002, total assets of the financial system have increased slightly by
1.9%, measured in current U.S. dollars, since the end of 2001.
The following table sets forth the total gross assets of the Peruvian
financial system for the periods indicated:
Total Gross Assets of the Peruvian Financial System
(in millions of U.S. dollars and as a percentage change from previous year)
Financial system Commercial banks
----------------------------- -----------------------------
US$ Growth rate (%) US$ Growth rate (%)
------------ ----------------- ------------ -----------------
As of December 31,
1997................................. 23,405 29.8 21,976 28.6
1998................................. 23,582 0.8 21,761 (1.0)
1999................................. 22,427 (4.9) 20,834 (4.3)
2000................................. 20,424 (8.9) 19,110 (8.3)
2001................................. 18,858 (7.7) 17,814 (6.8)
2002:
January........................... 18,934 2.0 17,866 2.1
February.......................... 19,080 2.5 18,028 2.7
March............................. 19,214 0.1 18,166 0.2
- --------------------------------
Source: SBS.
Private commercial banks are the primary source of private sector
financing and in 2001 accounted for 78.7% of all U.S. dollar-denominated loans
and 19.2% of loans denominated in nuevos soles. In the period from 1997 to 2001,
the private sector received on average 88.8% of the total credits issued by the
financial system, while the public sector received only 11.2%. As of March 31,
2002, major private sector borrowers included companies engaged in manufacturing
(24.3% of total loans) and wholesale and retail trade (17.0% of total loans).
The following tables set forth information regarding the allocation of
loans to each sector of the economy.
Loans of the Financial System by Sector(1)
(in millions of U.S. dollars, at current prices)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- ---------
Private sector:
Agriculture and
livestock............... US$ 450 US$ 457 US$ 392 US$ 392 US$ 381 US$ 389
Fishing................... 313 425 382 439 316 326
Mining.................... 442 494 574 591 764 616
Manufacturing............. 3,287 3,888 3,404 3,251 2,682 2,854
Electricity, gas and 113 313
water................... 356 402 370 407
Construction.............. 486 682 611 560 339 340
Wholesale and retail
trade................... 2,481 2,207 2,088 1,593 1,988 1,997
Hotels and restaurants.... 209 331 232 205 192 188
Transportation,
warehousing and
telecommunications...... 848 818 589 613 583 619
Financial intermediation.. 574 828 430 380 379 391
Real estate............... 809 1,046 742 861 773 766
Public administration
and defense............. 91 111 80 93 94 95
Education................. 65 84 63 57 49 59
Health and social
services................ 527 735 587 753 54 52
Other..................... 3,758 3,069 2,536 2,569 2,617 2,638
--------- --------- --------- --------- --------- ---------
Total loans........... US$14,453 US$15,488 US$13,066 US$12,759 US$11,582 US$11,736
========= ========= ========= ========= ========= =========
- ---------------------
(1) Excludes rural savings and loans, municipal savings and loans and small
business loans institutions. Source: SBS.
Loans of the Financial System by Sector(1)
(as a percentage of total loans)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- ---------
Private sector:
Agriculture and
livestock................ 3.1% 3.0% 3.0% 3.1% 3.3% 3.3%
Fishing.................... 2.2 2.7 2.9 3.4 2.7 2.8
Mining..................... 3.1 3.2 4.4 4.6 6.6 5.3
Manufacturing.............. 22.7 25.1 26.1 25.5 23.2 24.3
Electricity, gas and
water.................... 0.8 2.0 2.7 3.2 3.2 3.5
Construction............... 3.4 4.4 4.7 4.4 2.9 2.9
Wholesale and retail
trade.................... 17.2 14.2 16.0 12.5 17.2 17.0
Hotels and restaurants..... 1.4 2.1 1.8 1.6 1.7 1.6
Transportation,
warehousing and
telecommunications....... 5.9 5.3 4.5 4.8 5.0 5.3
Financial intermediation... 4.0 5.3 3.3 3.0 3.3 3.3
Real estate................ 5.6 6.8 5.7 6.7 6.7 6.5
Public administration
and defense.............. 0.6 0.7 0.6 0.7 0.8 0.8
Education.................. 0.4 0.5 0.5 0.4 0.4 0.5
Health and social
services................. 3.6 4.7 4.5 5.9 0.5 0.4
Other..................... 26.0 19.8 19.4 20.1 22.6 22.5
--------- --------- --------- --------- --------- ---------
Total loans.......... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========= ======== ========= ========= ========= =========
- --------------------------------
(1) Excludes rural savings and loans, municipal savings and loans and small
business loans institutions. Source: SBS.
The following table sets forth the bank credit to the private sector
for the years shown.
Bank Credit to the Private Sector
(as a percentage of total credit)
Private Commercial Banks Public Sector Banks
---------------------------- ------------------------------
S/. Foreign Currency S/. Foreign Currency
-------- ----------------- --------- ----------------
1997........ 21.9 75.6 0.8 1.7
1998........ 19.3 78.4 0.7 1.6
1999........ 17.4 80.6 0.3 1.7
2000........ 18.2 79.9 0.3 1.6
2001........ 19.2 78.7 0.7 1.4
2002(1)..... 19.5 78.1 0.9 1.5
- --------------------------------
(1) As of March 31.
Source: Central Bank.
Pursuant to the Central Bank Charter, interest rates float freely in
the Peruvian economy and are determined by market conditions. Only in
exceptional circumstances is the Central Bank allowed to establish minimum and
maximum interest rates. The Central Bank does not engage in open market
operations in order to affect interest rates but rather to control the growth
rate of the monetary base.
The Ley General del Sistema Financiero y del Sistema de Seguros y
Organica de la Superintendencia de Banca y Seguros, or Financial and Insurance
System Law, the 1996 Banking Law and the SBS Charter establish that financial
companies may freely establish interest rates and the commissions they charge on
loans, deposits and other services they provide.
The following table sets forth information regarding interest rates for
the years shown.
Interest Rates on Commercial Bank Loans
(in annual percentages)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- ---------
Domestic currency:
Interbank............. 12.8% 12.9% 16.9% 11.4% 3.1% 2.5%
Prime(1).............. 18.5. 21.5 22.5 15.4 5.0 3.9
Average loan rate..... 30.4. 37.1 32.0 26.5 23.0 20.7
Foreign currency:
Interbank.............. 7.6. 11.2 6.6 8.4 2.1 2.1
Prime(1).............. 12.8. 12.5 12.9 8.2 3.1 2.9
Average loan rate..... 15.6. 16.8 14.8 12.6 10.2 10.1
- --------------------------------
(1) Since year 2000 it considers only loans to corporate sector.
Source: SBS.
The decrease in interest rates on domestic currency loans since
December 31, 2000 is a result of greater liquidity in the financial system and
lower international interest rates, as well as a reduced credit risk since the
second half of 2001.
The following table sets forth information on interest rates applicable
to deposits for the years indicated.
Interest Rates on Deposits Paid by Commercial Banks
(in annual percentages)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- ---------
Domestic currency:
Savings deposits........... 10.7% 10.1% 9.5% 7.7% 5.9% 1.8%
Time deposits.............. 15.0 15.1 16.2 13.3 9.9 3.9
Average deposit rate....... 10.3 10.9 11.8 9.8 7.5 3.7
Foreign currency:
Savings deposits........... 4.6 4.4 4.1 3.5 2.5 0.8
Time deposits.............. 7.2 6.6 6.4 5.7 4.0 2.1
Average deposit rate....... 5.5 5.1 5.1 4.7 3.5 1.7
- -------------------------------
Source: SBS.
Liquidity and Credit Aggregates
The most significant money supply measures in Peru are M1, M2, M3 and
M4, which are generally composed as follows:
o M1 consists of currency in circulation plus demand deposits in
domestic currency held in private sector banks;
o M2 consists of M1 plus savings deposits in domestic currency held
in private banks;
o M3 consists of M2 plus time deposits in domestic currency held in
private banks and mortgage certificates and other certificates,
in domestic currency, issued by private banks; and
o M4 or "broad money" consists of M3 plus foreign currency in
circulation.
During the period from 1997 to 2001, the Republic's monetary base grew
only 1.1%, from US$1.75 billion in 1997 to US$1.77 billion in 2001. M1 grew
during this period at an average annual rate of 8.6%, M2 at an average annual
rate of 9.8% and M3 at an average annual rate of 12.5%. The following table sets
forth the composition of the monetary base and international reserves as of the
dates indicated.
Monetary Base and Central Bank's International Reserves
(in millions of U.S. dollars, at current prices)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- ---------
Currency in circulation
and cash in vaults
at banks................. US$ 1,711 US$ 1,561 US$ 1,659 US$ 1,583 US$ 1,748 US$ 1,654
Commercial bank deposits
at the Central Bank....... 39 34 15 15 22 16
--------- --------- --------- --------- --------- ---------
Monetary base............... US$ 1,750 US$ 1,595 US$ 1,674 US$ 1,598 US$ 1,770 US$ 1,670
========= ========= ========= ========= ========= =========
Gross international
reserves.................. US$11,119 US$ 9,982 US$ 9,003 US$ 8,563 US$ 8,838 US$ 8,940
Net international
reserves.................. 10,169 9,183 8,404 8,180 8,613 8,786
- --------------------------------
Source: Central Bank.
As of December 31, 2001, the ratio of gross international reserves at
the Central Bank to the monetary base was approximately 5 to 1.
Between 1997 and 2001, the average amount held by financial
institutions in current accounts at the Central Bank was US$42.8 million. During
this period, the Central Bank successfully employed its monetary tools to ensure
that current account deposits remained within the targets it prescribed on a
monthly basis. The Central Bank was thus able to regulate the liquidity of the
banking system in order to ensure a growth of the monetary base commensurate
with the Republic's inflation and GDP growth targets.
As of December 31, 2001, outstanding credits of the financial system
totaled US$15.6 billion and deposits in the financial system totaled US$11.9
billion. The private sector is the principal recipient of commercial loans.
Private-sector credits from commercial banks showed only a moderate increase
between 1997 and 1998, as a result of a worldwide economic slowdown. After
reaching a peak of US$14.8 billion in 1998, private-sector credits declined at
an average annual rate of 3.3% to US$13.4 billion in 2001. Aggregate deposits in
commercial banks grew at an average annual rate of 3.2%, from US$12.0 billion in
1997 to US$12.4 billion in 2001. Foreign-currency denominated deposits in the
banking system grew at an average annual rate of 1.6% between 1997 and 2001,
reaching US$9.5 billion in 2001.
From December 31, 2001 to March 31, 2002, the Republic's monetary base
decreased 5.4%, to US$1.67 billion as of March 31, 2002. The decrease was
largely attributable to a seasonal increase in over the counter purchases of
U.S. dollars during the forth quarter of 2001. At the same time, gross
international reserves increased 1.2%, to US$8.94 billion, and net international
reserves increased 2.0%, to US$8.79 billion largely due to increased public
sector deposits due to the February 2002 issuance of the Global Bonds and a
reduction of deposits by financial intermediaries, primarily banks, in the
Central Bank.
The following table sets forth liquidity and credit aggregates as of
the dates indicated.
Liquidity and Credit
(in millions of U.S. dollars, at current prices)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- ---------
Monetary aggregates
Currency in circulation... US$ 1,407 US$ 1,254 US$ 1,319 US$ 1,285 US$ 1,438 US$ 1,368
M1........................ 2,423 2,103 2,128 2,080 2,275 2,193
M2........................ 4,763 4,014 4,020 4,096 4,769 4,792
M3........................ 13,630 12,999 13,225 13,438 14,220 14,003
Credit by sector(1)
Public sector............. US$ 1,384 US$ 1,727 US$ 1,787 US$ 1,728 US$ 2,226 US$ 2,099
Private sector............ 14,206 14,840 14,207 13,691 13,403 13,377
Total credit aggregates. US$15,589 US$16,567 US$15,994 US$15,419 US$15,630 US$15,476
Deposits
Local currency(2)......... US$ 2,340 US$ 1,911 US$ 1,892 US$ 2,016 US$ 2,494 US$ 2,599
Foreign currency(3)....... 8,867 8,985 9,205 9,342 9,451 9,211
Total deposits.......... US$11,207 US$10,897 US$11,097 US$11,358 US$11,945 US$11,810
- --------------------------------
(1) Includes securities offerings and cash advances from checking accounts.
(2) Includes savings deposits, time deposits and other certificates in domestic
currency.
(3) Includes demand deposits, savings deposits, time deposits and other
certificates in foreign currency.
Source: Central Bank.
The following table sets forth growth in selected monetary indicators
as of the dates indicated.
Selected Monetary Indicators
(percentage change from previous
year, based on variable rates in nuevos soles)(1)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002(2)
--------- --------- --------- --------- --------- ---------
M1................. 19.8% 13.3% 2.6% 5.6% 1.5% 9.8%
M2................. 19.1 15.3 1.7 5.9 6.8 17.2
M3................. 25.2 14.7 14.0 5.3 3.2 4.1
- --------------------------------
(1) Average indicators of the period.
(2) As compared to March 31, 2001.
Source: Central Bank.
Inflation
The economic and monetary program that the Government implemented
during the early 1990s achieved a drastic reduction in inflation. The Republic
experienced hyperinflation during the late eighties and in 1990. By 1997,
inflation, as measured by the CPI, had declined to an average rate of 8.5% and
continued to decrease from 1997 to 2001. Prices during 2002 have shown
significant stability, with an average inflation rate of -0.7% for the three
months ending March 31, 2002, as compared to 0.3% for the three months ending
March 31, 2001.
During 1999 and 2000, fuel prices were by far the main contributors to
the overall increase in prices, rising 25.9% in 1999 and 30.3% in 2000. In 1999,
other significant contributors to inflation included transport services rising
13.3% and public services rising 12.7%. In 2000, significant contributors to
inflation included education services rising 5.6% and transport services rising
5.0%.
In 2001, fuel prices showed a sharp reversal, falling 13.1%. The main
reasons for inflation during this period included education services rising
4.0%, health services rising 3.0%, public services rising 2.7% and food prices
rising 1.2%.
The following table sets forth changes in the CPI for the periods
indicated.
Consumer Price Index(1)
(% change)
----------------------------------
End of period Average
---------------- -------------
1997............................ 6.5 8.5
1998............................ 6.0 7.3
1999............................ 3.7 3.5
2000............................ 3.7 3.8
2001............................ -0.13 2.0
2002:
January....................... -0.52 1.6
February...................... -0.04 1.2
March......................... 0.54 0.8
- --------------------------------
(1) For a description of how the CPI is and its rates of change are calculated,
see "Certain Defined Terms and Conventions--Certain Defined Terms."
Source: Central Bank.
Foreign Exchange and International Reserves
Foreign Exchange
Prior to 1991, the Republic exercised control over the foreign exchange
markets by imposing multiple exchange rates and placing restrictions on the
holding and use of foreign currencies. In 1991, the Fujimori administration
eliminated all foreign exchange controls and the exchange rates were unified.
Currently, foreign exchange rates are determined by market conditions, with
occasional intervention by the Central Bank to prevent drastic fluctuations.
The following table sets forth the nuevo sol/U.S. dollar exchange rates
for the dates and periods indicated.
Exchange Rates(1)
(S/. per US$)
-------------------------------------
End of period Average
---------------- ------------
1997............................ 2.725 2.660
1998............................ 3.150 2.925
1999............................ 3.510 3.380
2000............................ 3.525 3.490
2001............................ 3.444 3.507
2002............................ 3.446(2) 3.456(3)
- --------------------------------
(1) Formal rates offered by banks.
(2) As of March 31.
(3) Average from January 1 to March 31, 2002.
Source: Central Bank.
International Reserves
Pursuant to Article 72 of the Central Bank's Charter, the international
reserves administered by the Central Bank consist primarily of:
o holdings of gold and silver;
o foreign currencies generally accepted as a means of payment in
the international markets; and
o in the Central Bank's Board's discretion:
- foreign currency deposits of less than 90 days;
- certificates of deposits of less than 90 days issued by
banks; and
- investment-grade securities having a high level of liquidity
issued by international organizations or public foreign
entities.
The Central Bank maintained a policy during the 1990s of accumulating
international reserves. International reserves help the Republic to maintain
economic and financial stability by ensuring the availability of foreign
currency in extraordinary situations. These situations can include sudden,
significant withdrawals of foreign currency deposits from the banking system, or
sharp downturns in exports and economic activity.
In order to determine and guide the optimal investment distribution of
its reserves, the Central Bank prepares a model benchmark portfolio that takes
into consideration variables such as return, risk, liquidity, maturity and
diversification. This model portfolio is designed in light of actual market
conditions to ensure that it sets forth feasible goals and eschews speculative
assumptions. The Central Bank adjusts the value of its investment portfolio
daily on the basis of market prices, although the Central Bank generally
maintains its investment assets until their maturity.
The Central Bank considers and actively manages the following four
types of risks in investing its international reserves:
o Liquidity risk. The Central Bank manages liquidity risk by
distributing its investments among three types of assets,
following the guidelines of its benchmark portfolio:
- highly liquid, short-term assets to cover unexpected
contingencies;
- liquid assets not exceeding one year in maturity, which
include bank time-deposits not exceeding three months and
having staggered maturity dates, and fixed income-securities
that are highly liquid in the international markets; and
- assets with maturities exceeding one year, generally
consisting of bonds that offer a relatively higher return
because of the longer term. To ensure an adequate level of
liquidity, these bonds must have been issued in certain
minimum quantities as prescribed by the Central Bank.
o Credit risk. To minimize risks that may arise due to insolvency
on the part of the creditor, the Central Bank diversifies its
investments as follows:
- deposits in foreign banks that are rated investment grade by
Standard & Poor's, a division of the McGraw-Hill Companies,
Moody's Investor Service, Fitch IBCA, Duff & Phelps or
similar credit-rating agencies;
- investment-grade fixed-income securities or securities
guaranteed by international organizations, foreign
governments or their agencies; and
- investments in debt or equity issued by private entities are
prohibited.
o Foreign exchange risk. Fluctuations in the foreign exchange
markets can pose a significant risk to the level of reserves at
the Central Bank, due to the significant U.S. dollar-denominated
liabilities of the Peruvian banking system. Moreover, the great
majority of the Republic's foreign trade and capital flows are
also denominated in U.S. dollars, which can also exert
significant pressure on the Central Bank's international
reserves. To safeguard its international reserves from
fluctuations in the foreign exchange markets, the Central Bank
invests primarily in U.S. dollar-denominated assets. Some
investments are also made in German deutsche marks that match
amounts owed in such currency to the IMF.
o Market risk. To mitigate market risk, the Central Bank tries to
match the average maturity of its assets to that of its
liabilities. The average maturity of the Central Bank's portfolio
does not exceed one year, which significantly protects it from
market fluctuations. Additionally, the Central Bank imposes
limits on the maximum term of its portfolio securities.
Between 1997 and 2000, the Central Bank's net international reserves
decreased at an average annual rate of 7.0%, with the steepest declines
occurring during 1998 and 1999. This decrease was the result of reductions in
public sector deposits and deposits of financial institutions in the Central
Bank, and a decrease in foreign exchange reserves at the Central Bank, as a
result of repurchases of treasury bonds. In 2001, however, net international
reserves increased 5.3% from 2000, due to increased deposits of financial
institutions at the Central Bank, reflecting excess liquidity at the Central
Bank and for bank operations.
As of March 31, 2002, the Central Bank's cash reserves totaled US$4.1
billion, representing a 20.2% decrease over the level as of December 31, 2001
and a 19.2% decrease over the level as of December 31, 2000. As of March 31,
2002, the Central Bank's gold reserves totaled US$337 million, representing a
30.6% increase over the level as of December 31, 2001 and a 22.5% increase over
the level as of December 31, 2000.
Between 1997 and 1998, the net international reserves of the Peruvian
banking system as a whole decreased by 10.6%, but increased by 7.6% in 1999,
showed only a moderate decrease of 1.8% in 2000, and increased again by 9.5% in
2001. During the period from 1997 to 2001, the ratio of total gross reserves of
the Peruvian banking system to total monthly imports fluctuated between 15.4%
and 18.0%.
The following table shows the composition of the international reserves
of the Republic's banking system as of the dates indicated.
Net International Reserves of the Banking System
(in millions of U.S. dollars at period end, at current prices)
As of
As of December 31, March 31,
---------------------------------------------------------------- ---------
1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- ---------
Central Bank
Assets................... US$11,119 US$ 9,982 US$ 9,003 US$ 8,563 US$ 8,838 US$ 8,940
Liabilities.............. 950 799 599 383 225 154
--------- --------- --------- --------- --------- ---------
Total (assets
less liabilities).... 10,169 9,183 8,404 8,180 8,613 8,786
Banco de la Nacion and
Banca de Fomento
Assets................... 287 246 152 77 103 33
Liabilities.............. 68 29 28 28 27 27
--------- --------- --------- --------- --------- ---------
Total (assets
less liabilities).... 219 217 124 49 76 6
Private banks
Assets................... 578 613 981 824 750 763
Liabilities.............. 2,984 2,879 1,835 1,519 1,188 1,154
--------- --------- --------- --------- --------- ---------
Total (assets
less liabilities).... (2,406) (2,266) (854) (695) (437) (392)
Net international
reserves........... US$ 7,982 US$ 7,134 US$ 7,674 US$ 7,534 US$ 8,252 US$ 8,400
========= ========= ========= ========= ========= =========
Memorandum items:
Gross reserves of
the Central Bank....... US$11,119 US$ 9,982 US$ 9,003 US$ 8,563 US$ 8,838 US$ 8,940
Gross reserves of
the banking system..... US$11,984 US$10,841 US$10,136 US$ 9,464 US$ 9,691 US$ 9,735
Gross reserves of the
Central Bank (in months
of total imports)...... 15.6 14.6 16.0 14.0 14.7 16.6
Gross reserves of the banking
system (in months of total
imports)............... 16.8 15.9 18.0 15.4 16.2 18.1
- --------------------------------
Source: Central Bank.
Securities Markets
The securities markets in Peru are regulated by CONASEV. CONASEV's
purpose is to protect investors and promote the efficient operations of the
market. In particular, CONASEV functions include:
o supervision of the activities and management of the various
market participants, including the Lima Stock Exchange, brokerage
firms, issuing companies, mutual funds and other investment
funds, and credit-rating agencies; and
o promotion of market transparency, through disclosure and
dissemination requirements.
Peru's capital markets underwent significant changes during the 1990s
as a result of various reform initiatives undertaken by the Government. These
reforms began in 1991 with passage of the Ley de Mercado de Valores, which we
refer to in this prospectus as the "Securities Market Law of 1991." This law
implemented a comprehensive set of measures that liberalized and modernized the
operations of Peru's capital markets. These measures included:
o requirements for securities exchanges and broker dealers, such as
the introduction of special funds that these entities must
provide in order to guarantee the proper execution of trades;
o market transparency and disclosure requirements, particularly
through the creation of the Registro Publico de Valores e
Intermediarios, or Public Registry of Securities and Broker
Dealers, a public record of all the participants in the Peruvian
capital markets, including issuers, broker-dealers and
credit-rating agencies;
o the establishment of a regulatory framework for new institutions
that were authorized to operate in the Peruvian capital markets
and which would play an increasingly important role (these new
institutions included mutual funds and credit-rating agencies);
and
o requirements for the operation of primary and secondary markets,
including guidelines for the settlement of securities
transactions, dealer commissions, dispute resolution and asset
securitization.
In 1996, a new Ley de Mercado de Valores, or Securities Market Law of
1996, was introduced. This law preserved the basic market structure adopted
under the Securities Market Law of 1991, but introduced certain changes in order
to streamline further the operations of the Peruvian capital markets, making
them more compatible with international standards. These changes included:
o vesting with the Lima Stock Exchange self-regulatory authority;
o creating CAVALI ICLV S.A., a private securities clearing and
depository agency independent of the Lima Stock Exchange;
o liberalizing the brokerage business through the introduction of
less stringent minimum capital requirements and broadening of the
range of transactions in which brokerage firms may participate;
and
o restricting insider trading.
In order to stimulate the growth of Peru's capital markets, the
Government also encouraged greater participation in the markets through economic
incentives. In 1993, the Republic adopted tax exemptions for both capital
earnings generated through stock exchange trading and interest income obtained
from any kind of bond. These tax exemptions, which are scheduled to expire in
December 2006, have played a pivotal role in funneling funds towards the capital
markets.
Another significant factor in the development of Peru's capital markets
was the introduction in 1993 of private pension funds and mutual funds, both of
which have become important institutional investors. Administradoras Privadas de
Fondos de Pensiones, or Private Pension Fund Agencies, which we refer to in this
prospectus as "AFPs," were created pursuant to Decree Law No. 25897, or Private
Pension System Law of 1992. These private pension funds were introduced not only
to improve Peru's social security system, but also to channel funds towards the
capital markets. For a description of the Republic's private pension system see
"Public Sector Finances--Social Security." During the period from 1997 to 2001,
membership in these funds increased at an average annual rate of 12.4%.
Currently, there are four funds in operation with approximately 2.8 million
members and approximately US$3.9 billion in assets under management. These funds
invest in fixed-income securities, representing approximately 52.8% of their
portfolios, floating-rate securities, representing approximately 25% of their
portfolios, and bank time deposits, representing approximately 22.2% of their
portfolios.
Mutual funds entered the market as a result of the Securities Market
Law of 1991, which established a regulatory framework for their operations.
Currently, there are eight mutual fund companies in operation that administer 25
mutual funds. As of December 31, 2001, these mutual fund companies managed
approximately US$1.1 billion in assets for approximately 41,000 investors. These
mutual funds invest primarily in fixed-income securities, representing
approximately 49.1% of their portfolios, and bank time deposits, representing
approximately 33.8% of their portfolios.
Peru's capital markets experienced significant growth during the 1990s
as a result of the reforms implemented by the Government during this period.
Despite this growth, the Peruvian capital markets remain relatively small and
illiquid. Accordingly, most businesses, particularly small and medium-size
businesses, raise capital through the local banking system; large businesses
also benefit from limited access to foreign credit.
Founded in 1971, the Lima Stock Exchange is the only securities
exchange operating in Peru. The Lima Stock Exchange was privatized as part of
the capital-market reforms implemented by the Government in 1991 and currently
operates as a self-regulatory entity under the supervision of CONASEV. The
public trading of company shares (cash operations) accounted for approximately
31% of the total volume transacted on the exchange in 2001, while cash
transactions with debt instruments accounted for 58%. As of March 30, 2002,
there were 210 companies listed on the Lima Stock Exchange, four of which were
foreign companies (not including companies listing only bonds or trading
securities under the modality of market maker). During the period from 1996 to
2001, market capitalization of domestic companies decreased at an average annual
rate of 4.7% to US$10.9 billion as of December 31, 2001. During the same period,
annual trading volume decreased at an average annual rate of 18.7% to US$3.0
billion in 2001. Daily trading volume in 2001 averaged US$12.0 million.
Peru's Capital Markets
Transaction Volume and Market Capitalization(1)
(in millions of U.S. dollars, at current prices)
For the first 3 months of:
--------------------------
1997 1998 1999 2000 2001 2001 2002
Equities:
Stocks.............. US$ 4,289.3 US$ 3,077.2 US$ 2,742.5 US$ 2,436.6 US$ 848.6 US$ 247.6 US$ 226.9
Others................ 8.9 13.7 5.2 83.7 87.7 38.3 15.5
----------- ----------- ----------- ----------- ----------- --------- ----------
Total.............. 4,298.2 3,090.9 2,747.7 2,520.3 936.3 285.9 242.4
Fixed Income Securities:
Auctions.............. 0.0 0.0 141.6 144.1 0.2 0.0 0.0
Continued trading..... 0.0 0.0 0.0 339.3 1,282.8 159.7 437.0
Bonds-money market.... 2,634.9 2,089.9 853.8 247.8 450.4 51.0 253.0
Mortgage bills........ 124.1 90.1 43.2 0.0 0.0 0.0 0.0
Certificates of
deposit............... 2,162.8 885.2 330.7 0.0 0.2 0.0 0.7
Others................ 948.9 491.8 26.5 0.9 0.9 0.0 1.5
----------- ----------- ----------- ----------- ----------- ---------- ----------
Total.............. 5,870.7 3,557.0 1,395.7 732.1 1,734.5 210.7 692.2
Report Transactions:
Equities.............. 1,770.8 981.4 430.7 271.0 219.9 56.4 54.7
Debt instruments...... 191.6 104.6 124.3 70.3 108.8 13.0 2.0
----------- ----------- ----------- ----------- ----------- ---------- ----------
Total.............. 1,962.4 1,086.0 555.0 341.3 328.7 69.4 56.7
Non-massive issued
instruments.............. 0.0 0.0 0.0 0.0 11.3 0.0 0.7
----------- ----------- ----------- ----------- ----------- ----------- ----------
Total Transaction
Volume................... US$12,131.3 US$ 7,734.0 US$ 4,698.4 US$ 3,593.7 US$ 3,010.8 US$ 566.0 US$ 992.0
============ ============ =========== =========== =========== =========== ==========
Market capitalization.... US$17,383.0 US$ 11,035.3 US$13,407.4 US$10,511.1 US$10,861.0 US$10,687.8 US$11,909.7
- --------------------------------
(1) Lima Stock Exchange
Source: CONASEV, Lima Stock Exchange
PUBLIC SECTOR FINANCES
Consolidated Public Sector
The consolidated Peruvian public sector is divided into the financial
public sector and the non-financial public sector. The non-financial public
sector consists of the central Government, its various decentralized
administrative and regulatory agencies, such as the SBS, Seguridad Social de
Salud, or Social Security for Health, which we refer to in this prospectus as
"ESSALUD," and the Superintendencia Nacional de Administracion Tributaria, or
National Superintendency for Tax Administration, which we refer to in this
prospectus as "SUNAT," the local municipal and district governments and
non-financial state-owned enterprises such as Petroleos del Peru S.A., which we
refer to in this prospectus as "Petroperu," and Empresa de Electricidad del Peru
S.A., which we refer to in this prospectus as "Electroperu." The financial
public sector consists of the Central Bank, Banco de la Nacion and COFIDE.
The non-financial public sector registered a surplus of US$93 million,
or 0.2% of GDP, in 1997 and an overall deficit every year from 1998 to 2001,
ranging from a low of US$475 million, or 0.9% of GDP, in 1998 to a high of
US$1.7 billion, or 3.2% of GDP, in 2000. The overall surplus achieved in 1997 by
the non-financial public sector resulted primarily from a US$259 million rise in
the consolidated surplus of state-owned enterprises as a result of an increase
in the net profits of Petroperu, Empresa Minera del Centro and Electroperu,
which was caused by diverse factors, including an 18% increase in the price of
fuel and a 28% rise in the price of zinc. In 1999, the consolidated deficit for
the non-financial public sector increased 243%, primarily as a result of a shift
in the central Government's fiscal accounts, from a US$422 million surplus in
1998 to a US$552 million deficit in 1999. This drastic shift was caused by a
decline in tax revenues that was not accompanied by a proportionate reduction in
Government expenditures. For a description of the central Government fiscal
accounts see "--Central Government."
The 2000 deficit for the non-financial public sector exceeded the 2.0%
target established in the Ley de Prudencia y Transparencia Fiscal, which we
refer to in this prospectus as the "Fiscal Prudence Act." This law was approved
in December 1999 and seeks to foster fiscal stability by establishing specific
guidelines on public sector deficits, growth in government spending and growth
in public sector debt. The law targets a 1.5% of GDP deficit for 2001 and a 1.0%
of GDP deficit for 2002. It also limits the increase of non-financial expenses
of the central Government for 2002 to 2.0% in real terms.
The Government has proposed new legislation which would substitute a
new Ley de Responsibilidad y Transparencia Fiscal, the Fiscal Responsibility
Act, for the current Fiscal Prudence Act. The proposed legislation, which has
been submitted to Congress for review and approval, is meant to address aspects
of the current law which have led to compliance failures, as well as to adapt
the law for the new Regional Governments.
In 2001, the deficit in the non-financial public sector fell from the
3.2% of GDP registered during the previous year to 2.5% of GDP, due to a
reduction in the central Government's fiscal accounts and a reduction in the
non-financial expenses of the central Government resulting from the improved
performance of state-owned enterprises and ESSALUD. On December 5, 2001,
Congress temporarily suspended enforcement of the deficit limit targeted by the
Fiscal Prudence Act.
For the first three months of 2002, the non-financial public sector
registered a deficit of US$198 million, or 1.5% of GDP, a 318% decrease from the
US$91 million surplus for the same period in 2001. This shift resulted primarily
from a steep fall in central Government income and, to a lesser extent,
increases in non-financial spending. The Government's decision to abandon
planned privatizations following protests in the cities of Arequipa and Tacna
against the sale of power generators Egasa S.A. and Egesur, S.A. is expected to
impact negatively private investment, holding back the expected economic
recovery and dry up financing of the fiscal deficit. The Government projects a
consolidated public sector deficit of 2.3% of GDP in 2002. Thus far, the
Republic has not met the Fiscal Prudence Act's budget guidelines for 2002.
The draft budget in 2003 projects a consolidated public sector deficit
of U.S.$1.1 billion or 1.9% of projected GDP.
The following tables set forth the consolidated public sector accounts
for the periods indicated.
Consolidated Accounts of the Non-Financial Public Sector
(in millions of U.S. dollars, at current prices)
For the first 3 months of:
-------------------------------
1997 1998 1999 2000(1) 2001(1) 2001(1) 2002(1)
--------- --------- --------- --------- --------- --------- ---------
Primary balance:
Central government.......... US$ 545 US$ 422 US$ (552) US$ (300) US$ (365) US$ 204 US$ 12
Decentralized agencies...... 255 225 69 31 41 81 27
Local governments........... (1) 40 (40) 12 44 32 28
State-owned enterprises..... 401 (54) 15 (262) 107 69 0
--------- --------- --------- --------- --------- --------- ---------
Primary consolidated
fiscal balance......... 1,200 633 (507) (518) (173) 387 67
Interest payments:
External debt............... 1,010 1,005 1,023 1,026 1,046 257 230
--------- --------- --------- --------- --------- --------- ---------
Domestic debt............... 97 103 99 188 160 39 35
--------- --------- --------- --------- --------- --------- ---------
Total interest payments... 1,108 1,108 1,122 1,214 1,207 296 265
Overall consolidated
fiscal balance........ US$ 93 US$ (475) US$(1,629) US$(1,732) US$(1,380) US$ 91 US$ (198)
========= ========= ========= ========= ========= ========= =========
Financing:
External.................... US$ (229) US$ 224 US$ (20) US$ 655 US$ 498 US$ 49 US$ 494
Domestic.................... (423) (12) 1,261 668 554 (187) (335)
Privatization............... 559 263 388 409 328 47 39
--------- --------- --------- --------- --------- --------- ---------
Total financing........... US$ (93) US$ 475 US$ 1,629 US$ 1,732 US$ 1,380 US$ (91) US$ 198
========= ========= ========= ========= ========= ========= =========
- --------------------------
(1) Preliminary data.
Source: Central Bank.
Consolidated Accounts of the Non-Financial Public Sector
(as a percentage of GDP, at current prices)
For the first 3 months of:
-------------------------------
1997 1998 1999 2000(1) 2001(1) 2001(1) 2002(1)
--------- --------- --------- --------- --------- --------- ---------
Primary balance:
Central government....... 0.9% 0.7% (1.1)% (0.6)% (0.7)% 1.6% 0.1%
Decentralized agencies... 0.4 0.4 0.1 0.1 0.1 0.6 0.2
Local governments........ 0.0 0.1 (0.1) 0.0 0.1 0.2 0.2
State-owned enterprises.. 0.7 (0.1) 0.0 (0.5) 0.2 0.5 0.0
--------- --------- --------- --------- --------- --------- ---------
Primary consolidated
fiscal balance...... 2.0 1.1 (1.0) (1.0) (0.3) 3.0 0.5
Interest payments:
External debt............ 1.7 1.8 2.0 1.9 1.9 2.0 1.7
Domestic debt............ 0.2 0.2 0.2 0.4 0.3 0.3 0.3
--------- --------- --------- --------- --------- --------- ---------
Total interest payments 1.9 2.0 2.2 2.3 2.2 2.3 2.0
--------- --------- --------- --------- --------- --------- ---------
Overall consolidated
fiscal balance..... 0.2% (0.9)% (3.2)% (3.2)% (2.5)% 0.7% (1.5%)
========= ========= ========= ========= ========= ========= =========
Financing:
External................. (0.4)% 0.4% (0.1)% 1.2% 0.9% 0.4% 3.7%
Domestic................. (0.7) 0.0 2.5 1.2 1.0 (1.5) (2.5)
Privatization............ 0.9 0.5 0.8 0.8 0.6 0.4 0.3
--------- --------- --------- --------- --------- --------- ---------
Total financing........ (0.2)% 0.9% 3.2% 3.2% 2.5% (0.7)% 1.5%
========= ========= ========= ========= ========= ========= =========
- ---------------------------
(1) Preliminary data.
Source: Central Bank.
The Toledo administration is currently considering a restructuring of
the consolidated public sector to increase efficiency in the provision of public
services. This restructuring could include a decentralization of the
consolidated public sector through the creation of autonomous regional
governments that will assume a number of central Government functions. As part
of this decentralization, the Toledo administration is considering conducting a
review and restructuring of the consolidated public sector to avoid duplicative
tasks and reduce administrative costs. These changes are pending developments
within the newly staffed Ministry of Economy.
Central Government
Peru's central Government encompasses the Republic's executive branch,
including various of its ministries and other centralized agencies such as the
Instituto Nacional de Bienestar Familia, or National Institute of Family
Welfare, and the Instituto Nacional de Becas y Credito Educativo, or National
Institute of Scholarships and Student Loans. The central Government also
includes regional governments, whose representatives are appointed by the
President, and public universities.
The Government derives its revenues primarily from:
o tax collections;
o import tariffs;
o external loans; and
o dividends from state-owned companies.
Between 1997 and 2001, total Government revenues fluctuated between a
low of US$7.6 billion, or 14.8% of GDP, in 1999 and a high of US$9.5 billion, or
16.0% of GDP, in 1997. During this same period, tax revenues ranged from a low
of US$6.5 billion, or 12.5% of GDP, in 1999 to a high of US$8.3 billion, or
14.1% of GDP, in 1997. Total Government revenues in 2001 decreased 3.8% to
US$7.7 billion, while tax revenues increased 3.0% to US$6.7 billion, in both
cases as compared to the level registered in 2000. During the first three months
of 2002, the Government registered total revenues of US$1.8 billion, a 6.3%
decrease over the first three months of 2001, and tax revenues of US$1.5
billion, a 5.8% decrease over the first three months of 2001.
In recent years, Government expenditures have consisted primarily of:
o wages of public sector employees;
o transfers to public sector entities;
o interest payments on debt;
o public investments in infrastructure; and
o pension expenditures.
Between 1997 and 2001, total Government expenditures, excluding
interest payments on the Government's debt fluctuated between a low of US$8.1
billion, or 14.9% of GDP, in 2001 and a high of US$8.9 billion, or 15.1% of GDP,
in 1997. Total Government expenditures, excluding interest payments on the
Government's debt, in 2001 decreased 2.9% to US$8.1 billion, as compared to the
level registered in 2000. During the first three months of 2002, the Government
registered total Government expenditures, excluding interest payments on the
Government's debt, of US$1.8 billion, a 4.2% increase over the first three
months of 2001.
In the first three months of 2002, the government registered an overall
fiscal deficit of US$217 million, a 211% increase over the US$87 million fiscal
deficit registered for the first three months of 2002. The increase in the
fiscal deficit over 2001 is largely attributable to a tax amnesty declared by
Congress which decreased tax revenue by approximately 1% of GPD during the first
quarter of 2002. The Government financed its deficit during the first three
months of 2002 through multilateral disbursements, privatization proceeds and
issuances of bonds in the national currency.
Between 1997 and 2001, the central Government registered overall fiscal
deficits that ranged from a low of US$456 million, or 0.9% of GDP, in 1997 to a
high of US$1.6 billion, or 3.2% of GDP, in 1999. In 1997 and 1998, the central
Government registered primary surpluses of 0.9% to 0.7% of GDP, respectively.
This trend changed drastically in 1999, when the central Government registered a
primary deficit of US$552 million, or 1.1% of GDP, primarily as a result of a
17.4% drop in tax revenues that was not accompanied by a proportionate reduction
in government expenditures. In 2000, an increase in non-tax revenues due to an
increase in current transfers from state-owned enterprises led to a reduction in
the central Government's primary deficit to US$300 million, or 0.6% of GDP. The
stabilizing effect of this increase in non-tax revenues was undermined by
Fujimori's expansionary fiscal policies leading to the June 2000 elections and
by low tax collections. The Government financed its 2000 deficit through a
combination of foreign credits, domestic credits and privatization proceeds. In
2001, the deficit was financed through amortizations, privatization proceeds and
issuances of bonds in the national currency.
The following tables set forth information regarding government
accounts for the periods indicated.
Central Government Accounts
(in millions of U.S. dollars, at current prices)
For the first 3 months of:
-------------------------------
1997 1998 1999 2000(1) 2001(1) 2001(1) 2002(1)
--------- --------- --------- --------- --------- --------- ---------
Fiscal revenue:
Current revenue:
Tax revenue:
Income tax............. US$ 2,143 US$ 2,000 US$ 1,499 US$ 1,471 US$ 1,604 US$ 390 US$ 380
Capital gains tax...... 0 0 0 0 0 0 0
Taxes on goods and
services:
General Sales Tax.... 3,883 3,768 3,260 3,439 3,364 837 824
Selective consumption
tax.................. 1,263 1,170 1,019 981 1,007 242 266
Import tariffs......... 927 987 842 835 780 202 168
Other taxes............ 82 (108) (166) (257) (93) (34) (96)
--------- --------- --------- --------- --------- --------- ---------
Total tax revenue. 8,299 7,817 6,453 6,468 6,662 1,637 1,542
Non-tax revenue(2)....... 1,081 1,085 1,023 1,391 958 256 233
--------- --------- --------- --------- --------- --------- ---------
Total current
revenue......... 9,380 8,902 7,476 7,859 7,620 1,892 1,774
Capital revenue........... 72 182 159 152 83 15 13
--------- --------- --------- --------- --------- --------- ---------
Total fiscal
revenue....... US$ 9,452 US$ 9,083 US$ 7,635 US$ 8,011 US$ 7,703 US$ 1,907 US$ 1,787
========= ========= ========= ========= ========= ========= =========
Expenditures:
Current expenditures:
Wages and salaries....... US$ 2,401 US$ 2,382 US$ 2,298 US$ 2,345 US$ 2,389 US$ 525 US$ 577
Goods and services....... 1,997 2,055 1,836 2,026 2,013 443 409
Current transfers........ 2,334 2,306 2,309 2,439 2,393 525 596
--------- --------- --------- --------- --------- --------- ---------
Total current expenditures 6,731 6,743 6,443 6,811 6,796 1,492 1,582
Capital expenditures:
Fixed investment......... 1,669 1,694 1,671 1,361 1,110 167 182
Other.................... 506 225 73 139 162 43 11
Of which:
Capital transfers.... 0 0 0 73 81 42 4
--------- --------- --------- --------- --------- --------- ---------
Total capital
expenditures......... 2,175 1,919 1,744 1,500 1,273 211 193
--------- --------- --------- --------- --------- --------- ---------
Total expenditures... US$ 8,907 US$ 8,662 US$ 8,186 US$ 8,311 US$ 8,068 US$ 1,703 US$ 1,775
========= ========= ========= ========= ========= ========= =========
Fiscal balance:
Primary fiscal balance..... US$ 545 US$ 422 US$ (552) US$ (300) US$ (365) US$ 204 US$ 12
Interest................... (1,001) (995) (1,012) (1,012) (1,026) (285) (229)
--------- --------- --------- --------- --------- --------- ---------
Overall fiscal
balance........... US$ (456) US$ (573) US$(1,564) US$(1,312) US$(1,391) US$ (81) US$ (217)
========= ========= ========= ========= ========= ========= =========
Financing:
Foreign financing.......... US$ 4 US$ 191 US$ (94) US$ 603 US$ 588 US$ 66 US$ 489
Domestic financing......... (108) 118 1,270 300 476 (33) (311)
Privatization.............. 559 263 388 409 328 47 39
--------- --------- --------- --------- --------- --------- ---------
Total financing.......... US$ 456 US$ 573 US$ 1,564 US$ 1,312 US$ 1,391 US$ 81 US$ 217
========= ========= ========= ========= ========= ========= =========
- --------------------------
(1) Preliminary data.
(2) Includes transfers from state-owned enterprises and royalties from
petroleum companies.
Source: Central Bank.
Central Government Accounts
(as a percentage of GDP, at current prices)
For the first 3 months of:
-------------------------------
1997 1998 1999 2000(1) 2001(1) 2001(1) 2002(1)
--------- --------- --------- --------- --------- --------- ---------
Fiscal revenue:
Current revenue:
Tax revenue:
Income tax............. 3.6% 3.5% 2.9% 2.7% 3.0% 3.1% 2.8%
Capital gains tax...... 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Taxes on goods and
services:
General Sales Tax.... 6.6 6.6 6.3 6.4 6.2 6.6 6.2
Selective consumption 1.9 1.9
tax.................. 2.1 2.1 2.0 1.8 2.0
Import tariffs......... 1.6 1.7 1.6 1.6 1.4 1.6 1.3
Other taxes............ 0.1 (0.2) (0.3) (0.5) (0.2) (0.3) (0.7)
--------- --------- --------- --------- --------- --------- ---------
Total tax revenue. 14.1 13.8 12.5 12.1 12.3 12.9 11.5
Non-tax revenue(2)....... 1.8 1.9 2.0 2.6 1.8 2.0 1.7
--------- --------- --------- --------- --------- --------- ---------
Total current 14.1 14.9
revenue........... 15.9 15.7 14.5 14.7 13.3
Capital revenue........... 0.1 0.3 0.3 0.3 0.2 0.1 0.1
--------- --------- --------- --------- --------- --------- ---------
Total fiscal revenue.. 16.0% 16.0% 14.8% 15.0% 14.3% 15.0% 13.4%
========= ========= ========= ========= ========= ========= =========
Expenditures:
Current expenditures:
Wages and salaries....... 4.1% 4.2% 4.4% 4.4% 4.4% 4.1% 4.3%
Goods and services....... 3.4 3.6 3.6 3.8 3.7 3.5 3.1
Current transfers........ 4.0 4.1 4.5 4.6 4.4 4.1 4.5
--------- --------- --------- --------- --------- --------- ---------
Total current
expenditures........... 11.4 11.9 12.5 12.7 12.6 11.8 11.8
Capital expenditures:
Fixed investment......... 2.8 3.0 3.2 2.5 2.1 1.3 1.4
Other.................... 0.9 0.4 0.1 0.3 0.3 0.3 0.1
Of which:
Capital transfers.... 0.0 0.0 0.0 0.1 0.1 0.3 0.0
--------- --------- --------- --------- --------- --------- ---------
Total capital
expenditures........... 3.7 3.4 3.4 2.8 2.4 1.7 1.4
--------- --------- --------- --------- --------- --------- ---------
Total expenditures... 15.1% 15.2% 15.9% 15.5% 14.9% 13.4% 13.3%
========= ========= ========= ========= ========= ========= =========
Fiscal balance:
Primary fiscal balance..... 0.9% 0.7% (1.1)% (0.6)% (0.7)% 1.6% 0.1%
Interest................... (1.8) (1.9) (2.1) (2.2) (2.1) (2.2) (1.9)
--------- --------- --------- --------- --------- --------- ---------
Overall fiscal (2.8)% (0.6)%
balance........... (0.9)% (1.1)% (3.2)% (2.7)% (1.8)%
========= ========= ========= ========= ========= ========= =========
Financing:
Foreign financing.......... 0.0% 0.3% (0.2)% 1.1% 1.1% 0.5% 3.7%
Domestic financing......... (0.1) 0.3 2.6 0.9 1.1 (0.3) (2.1)
Privatization.............. 0.9 0.5 0.8 0.8 0.6 0.4 0.3
--------- --------- --------- --------- --------- --------- ---------
Total financing.......... 0.9% 1.1% 3.2% 2.7% 2.8% 0.6% 1.8%
========= ========= ========= ========= ========= ========= =========
- ---------------------------
(1) Preliminary data.
(2) Includes transfers from state-owned enterprises and royalties from
petroleum companies.
Source: Central Bank
One of the Toledo administration's highest priorities is maintaining
fiscal discipline while reorienting public spending towards important social
programs, particularly education. To achieve fiscal balance, the Toledo
administration is considering the following measures:
o a reform of the tax system that will focus on eliminating costly
and unnecessary exemptions and improving tax collection
mechanisms;
o a review and reform of regulatory and public sector functions to
eliminate duplicative tasks, promote efficiency and reduce
administrative costs;
o a reduction in total expenditures in the long term, particularly
defense expenditures;
o a reform of the Fiscal Prudence Act to provide for automatic
adjustments in government expenditures to match revenue streams,
while providing the government with fiscal flexibility in
recessionary periods; and
o an overall reduction in the role of the Government in the
economy, especially with respect to large scale public investment
projects, which are expected to be relegated to the private
sector through concessions and privatizations.
Tax Regime
All central Government taxes in Peru are collected through SUNAT and
the Superintendencia Nacional de Aduanas, or National Superintendency for
Customs, which we refer to in this prospectus as "SUNAD." In accordance with
Supreme Decree number 061-2002-PCM, SUNAT and SUNAD merged on July 11, 2002.
SUNAT and SUNAD's budgets are determined through a percentage-based funding
mechanism, which provides each agency with 2% of its total tax collections. The
following table sets forth the composition of the Republic's tax revenues for
the periods indicated.
Tax Revenue of the Republic
(as a percentage of total tax revenue)
For the first 3 months of:
-------------------------------
1997 1998 1999 2000(1) 2001(1) 2001(1) 2002(1)
--------- --------- --------- --------- --------- --------- ---------
Income tax:
Individual............... 7.1% 8.0% 8.9% 9.1% 9.0% 9.5% 10.4%
Corporate................ 16.2 15.2 12.5 11.4 11.9 12.6 13.8
--------- --------- --------- --------- --------- --------- ---------
Clearing................. 2.5 2.3 1.8 2.2 3.2 1.7 0.4
Total income tax....... 25.8 25.6 23.2 22.7 24.1 23.8 24.6
Property tax............... 0.0 0.0 0.1 0.0 0.0 0.0 0.0
Taxes on goods and services:
General Sales Tax........ 46.8 48.2 50.5 53.2 50.5 51.1 53.5
Selective Consumption Tax:
Fuel tax............... 8.7 8.7 9.6 9.4 9.9 8.6 11.4
Other.................. 6.5 6.2 6.2 5.8 5.2 6.2 5.9
--------- --------- --------- --------- --------- --------- ---------
Total Selective
Consumption Tax..... 15.2 15.0 15.8 15.2 15.1 14.8 17.3
--------- --------- --------- --------- --------- --------- ---------
Total taxes on goods
and services...... 62.0 63.2 66.3 68.3 65.6 65.9 70.7
Import tariffs............. 11.2 12.6 13.0 12.9 11.7 12.4 10.9
Other taxes................ 7.9 6.8 7.2 8.3 10.7 12.1 4.3
Tax refund................. (6.9) (8.2) (9.8) (12.3) (12.1) (14.1) (10.6)
--------- --------- --------- --------- --------- --------- ---------
Total............. 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========= ========= ========= ========= ========= ========= =========
- ---------------------
(1) Reflects adjustments to reconcile estimated income tax withheld with
actual income tax liabilities.
Source: Central Bank.
Set forth below is a brief description of the Republic's current tax
regime, followed by a brief description of the Republic's tax enforcement
record.
Income Taxes
The current tax law provides for the following income tax rates for
2002:
Personal Annual Income
(in nuevos soles) 2002
- ------------------------------------------- ------------------
0-21,700................................... 0%
21,700-83,700.............................. 15
83,700-167,400............................. 21
> 167,400.................................. 27
- --------------------------
Source: Ministry of Economy.
The current tax law provides for the following corporate tax rates for
2002:
Corporate Tax 2002
- ------------------------------------------- ------------------
Tax on reinvested net profits.............. 27.0%
Tax on retained net profits................ 27.0
Dividend tax............................... 4.1
- --------------------------
Source: Ministry of Economy.
The corporate tax was raised from 20% to 27%, effective January 1,
2001, and applies to the worldwide income of enterprises legally regarded as
domiciled in Peru. A tax of 4.1% applicable to dividends will become effective
on January 1, 2003. Some forms of income are exempt from the corporate income
tax, including:
o income of religious and nonprofit institutions;
o interest on development loans granted by international
organizations or foreign governments;
o interest and other gains on loans to the public sector;
o interest on savings held in the domestic financial system;
o royalties for technical assistance provided by international or
foreign state agencies;
o capital gains from the sale of registered securities;
o interest and adjustments to principal from mortgage instruments;
and
o interest collected or paid by savings and loans cooperatives.
These exemptions are scheduled to expire on December 31, 2006.
The Republic offers companies in various industries the following tax
incentives to encourage their growth in various regions:
o companies operating in the Amazon region that are engaged in the
fishing, tourism or forestry industries, or engaged in
large-scale agricultural production or cultivation of marine life
for consumer consumption, are subject to a 10% tax rate;
o companies in the industries listed above that operate in the
departments of Loreto, Madre de Dios and some districts of
Ucayali are subject to a 5% tax rate; and
o companies that operate in the Amazon region that are engaged
principally in agriculture and/or the transformation or
processing of products classified as native or alternative crops
are exempt from income tax.
Capital Gains Tax
The Republic treats all capital gains as ordinary income for tax
purposes. Capital gains derived from the following activities are exempt from
income taxes:
o the sale of securities registered with the Public Registry of
Securities and Broker Dealers and sold through a securities
clearing agency;
o the sale of commodities through commodity exchanges regulated by
CONASEV; and
o the redemption and exchange of debt instruments and proprietary
interests issued through a public offering by corporations,
mutual funds, investment funds and trusts organized or established
in Peru.
These exemptions are scheduled to expire on December 31, 2006.
General Sales Tax
The Republic imposes an 18% Impuesto General a las Ventas, which we
refer to in this prospectus as the "General Sales Tax," a value-added tax that
applies to the sale, lease and import of new and used goods and services by
manufacturers, wholesalers, importers and retailers. Each party in the chain of
production generally collects the tax from its customer and pays to SUNAT the
difference between the tax paid to its suppliers and the tax collected from its
customers. For imports of goods, the taxable base is the c.i.f price plus
customs duties, surcharges and the selective consumption tax paid on such goods.
Some products and services are exempt from the General Sales Tax,
including fishmeal, various agricultural products, such as potatoes, tomatoes,
beans, coffee, tea, cocoa and wheat, public and cargo transport, financial
services, live entertainment and certain essential medicines. The Republic also
applies a special exemption for purchases made as part of the development of
natural resources. Individuals and companies operating in the Amazon region are
exempted from the General Sales Tax with respect to goods and services consumed
within this region.
The General Sales Tax does not apply to the export of goods or services
or construction contracts performed abroad. Exporters are reimbursed any General
Sales Tax they pay on the purchase of goods and services they export and can
apply such reimbursements as credits to offset General Sales Tax or income tax
liabilities.
Selective Consumption Tax
The Republic applies a selective consumption tax, which is an excise
tax, on selected goods and on gambling activities. The following table presents
a sample of the tax rates applicable to certain products.
Product Rate
- -------------------------------------------------- ------------
Soda.............................................. 17%
Gambling.......................................... 10
New cars.......................................... 10
Used cars......................................... 30
Wines, vermouths, ciders, whiskey, rum, gin....... 20
Cigarettes........................................ 125
Horse races....................................... 2
Beer.............................................. S/. 1.31 per liter
- --------------------------
Source: Ministry of Economy.
The Republic also imposes a tax on certain fuel products. The tax is
levied on the volume sold or imported, expressed in units of measurement
established by the Ministry of Economy. The following table presents a sample of
the tax rates applicable to certain fuel products.
Nuevos soles per
Fuels gallon
- ----------------------------------------------- -----------------
Gasoline:
< 84 octane................................. 1.84
84 - 90 octane.............................. 2.45
90 - 95 octane.............................. 2.69
> 95 octane................................. 2.97
Kerosene....................................... 0.52
Gasoils........................................ 1.24
Liquid petroleum gas........................... 0.52
- --------------------------
Source: Ministry of Economy.
Fuel consumed in the Amazon region is exempt from the fuel tax. Imports
or sales of diesel or residual fuel to enterprises engaged in the generation,
marketing and distribution of electrical power, as authorized by governmental
decrees, are exempt from the fuel tax until December 31, 2003.
Other Taxes
The Republic levies on employers a 2% tax, called the Extraordinary
Solidarity Tax, on the total compensation they pay to their employees. This tax
was reduced from 5% in September 2001 and is effective until December 31, 2002.
Independent workers earning total gross income of more than S/. 1,808 per month
must also pay this tax on their total gross earnings. The tax does not apply to
compensation for time of service, bonuses for national holidays and Christmas,
payments to household employees and annual profit-sharing allocations.
Tax Amnesty
In March 2002, the Government offered a tax amnesty that exonerated all
taxpayers from payment of penalty fees and penalty interests on overdue tax
payments. Taxpayers could elect to pay, in a single payment or in installments,
the principal amount in taxes owed plus a minimal interest to settle their
accounts. A similar amnesty was issued in April 2001.
Tax Enforcement
The Republic measures tax evasion mainly with respect to the General
Sales Tax, and the most recent statistical analysis was conducted in 1999 with
assistance from the IMF. This analysis indicated that the potential tax base for
the General Sales Tax represented 51.6% of GDP, which suggested potential
revenues from this tax of approximately 9.1% of GDP. Actual General Sales Tax
revenues, however, equaled 5.6% of GDP in 1999, suggesting losses in respect to
this tax equal to 3.7% of GDP.
The Republic has taken a series of steps to combat tax evasion and
improve collections, which include the following:
o establishing the Registro Unico de Contribuyentes, or Taxpayer
Registry, a computerized registry of taxpayers;
o creating a dual structure for monitoring taxpayers with special
units to monitor principal contributors, who currently account
for approximately 70% of total tax revenues collected. Principal
contributors are required to pay taxes directly at SUNAT's
premises, while the other taxpayers pay their taxes in a private
banking network of over 1,300 bank offices. The banking network
and a computerized system that automatically monitors tax arrears
for principal contributors help to plan auditing operations by
providing efficient means of conducting data analysis and
monitoring collection trends;
o simplifying the tax structure and a reduction in the number of
taxes;
o using more effectively SUNAT's powers to effect attachment of
delinquent taxpayers' assets;
o publishing delinquent taxpayers' names;
o increasing the number of audits of principal contributors; and
o implementing a system of tax withholding for the General Sales
Tax, applicable to approximately 40 to 50 principal
taxpayers and all public sector taxpayers.
SUNAT is currently planning the following additional measures to combat
tax evasion and improve collections:
o improving tax refund mechanisms to avoid refunds to companies
with outstanding tax liabilities;
o conducting approximately 17,000 audits of corporations and
independent professionals, focusing on collection of the General
Sales Tax and corporate taxes; audits of very large corporations
will be conducted annually while smaller corporations will be
audited every four years;
o increasing the use of a setoff mechanism that permits SUNAT to
deduct tax liabilities directly from a delinquent taxpayer's
debtors and bank accounts; and
o improving information-sharing mechanisms between SUNAT and other
government agencies with respect to principal taxpayers.
The Toledo Administration's Tax Reform Program
The Toledo administration's tax reform program is expected to include
the following proposals:
o eliminating special sectoral and regional exemptions, including
General Sales Tax exemptions for individuals and companies
operating within the Amazon region and for a number of
agricultural products, and the selective consumption tax
exemption for fuel consumed in the Amazon region;
o decreasing the number of allowable exemptions and deductions
under the personal and corporate income tax;
o reducing the number of taxes applicable to alcoholic
beverages; and
o working with municipalities to strengthen collection of property
taxes--the primary source of municipal tax revenue.
The Budget
Pursuant to the Constitution and the Ley de Gestion Presupuestaria del
Estado of 1996, which we refer to in this prospectus as the "Budgetary
Administration Law," the Ministry of Economy, acting through the Direccion
Nacional del Presupuesto Publico, which we refer to in this prospectus as the
"Public Budget Administration," is responsible for preparing the Republic's
annual budget.
The annual budget is prepared on the basis of:
o proposals submitted by the various public entities;
o matching revenue estimates with goals and priorities established
for each entity; and
o balances for previous fiscal years and estimates for future
years.
The Public Budget Administration submits its proposed budget to the
Council of Ministers for approval. If the Council of Ministers approves the
proposed budget, it is submitted by the President to Congress by August 30 of
each year. Upon Congressional approval, the proposed budget becomes the Annual
Law of the Public Sector Budget. Under the Constitution, if by November 30
Congress has not submitted to the Executive Branch an official document
commenting on or approving the budget, the budgetary proposal submitted by the
President is automatically adopted as the Annual Law of the Public Sector
Budget.
Congress approved the 2003 budget on December 15, 2002. See "Recent
Developments."
Congress approved the 2002 budget on November 29, 2001. The following
table sets forth the principal assumptions on which the Government's 2002 budget
was based.
Principal Budgetary Assumptions for 2002
2002
--------------------
Projected real GDP growth....................... 3.5-4.0%
Projected inflation............................. 2.50%
Projected average exchange rate................. S/. 3.54 per dollar
- --------------------------
Source: Ministry of Economy.
The 2002 budget projected fiscal revenues of S/. 26.7 billion, or
US$7.6 billion, and public expenditures of S/. 35.8 billion, or US$10.4 billion,
US$6.05 billion of which was expected in privatization proceeds.
The 2002 budget projected a reduction in total public expenditures of
1.6% compared to the 2001 budget, with a projected 15% increase in education
expenses and a projected 17% reduction in military spending. Approximately 46%
of the 2002 budget was dedicated towards social investment programs in areas
such as education and health services. Overall, the 2002 budget projected a
12.4% increase in spending on social programs as compared to the 2001 budget.
The 2002 budget projected an overall fiscal deficit for the central
Government of US$1.3 billion, or 2.2% of projected GDP, and an overall
consolidated public sector deficit of approximately US$1.4 billion, or 2.3% of
projected GDP.
The 2002 budget provided for an automatic adjustment of the target
fiscal deficit if privatization receipts for 2002 exceeded expectations. If
privatization revenues in 2002 exceed the Government's projections of US$700
million, the deficit target would be automatically adjusted by the amount of
such excess. Such adjustments should not exceed 0.3% of GDP and all excess
privatization receipts would be directed towards spending on infrastructure
projects.
Because of the political events that occurred as a result of the June
privatizations of Egasa and Egesur, the privatization of these companies was
suspended. Without proceeds from such privatizations, the Republic was forced to
rely on alternative sources of financing in order to maintain its projected
fiscal deficit of 2.3% of GDP and safeguard its program of public investment
intended to sustain GDP growth.
The following table summarizes the Government's principal budgetary
targets for 2002.
Principal Economic Targets for 2002
2002
------------
Overall consolidated public sector deficit (as % of GDP)........ 1.9%
Discretionary public sector expenditures (as % of GDP).......... 2.5%
Gross public sector debt denominated in
foreign currency (in millions of US$)......................... US$ 19,789.0
Increase in net international reserves of the Central Bank
relative to December 2001 (in millions of US$)................ US$ 100.0
- --------------------------------
Source: Ministry of Economy.
Social Security
Peru has a two-tier pension system. The public pension system is a
pay-as-you-go system by which current social security contributions are used to
pay benefits currently being provided by the Government. In 1993, the Government
also created AFPs as an alternative to the public pension system.
The public pension system has two components: the general
pay-as-you-go-system, which applies to the general population and is
administered by the Oficina de Normalizacion Previsional, or Office of Pension
Regularization, and the special public-sector regimes for the military, police,
teachers, certain judges and magistrates, and other special segments of the
population. The public sector has two pension reserve funds funded by
privatization receipts: the Fondo Consolidado de Reservas Previsionales, or
Consolidated Reserve Fund, an autonomous fund with resources earmarked to meet
public pension obligations falling due over the medium- and long-term, and the
Fondo Nacional de Ahorro Publico, or National Public Savings Fund, the objective
of which is to provide supplemental pensions to all low-income pensioners in the
private pension system.
The private pension system consists of four AFPs. New entrants to the
labor market can join the private pension system but they must exercise this
option within 10 days of employment. Otherwise, they are automatically enrolled
in a public fund. Workers may leave the public pension system for an AFP at any
time, but once they leave the public pension system, they cannot return. To
compensate individuals who switch to the AFPs for pension rights they had
accumulated while participating in the public pension system, the Government has
authorized the issuance of recognition bonds. These bonds are nontransferable,
zero-coupon bonds indexed to the consumer price index and redeemable at
retirement.
To provide an incentive for individuals to join AFPs and discourage
participation in the public pension system, the Government increased the private
pension system contribution rate to 11% from 3% in the early 1990s and to 13% in
1997. Workers are eligible to receive benefits at age 65. In December 2001, a
congressional commission approved a proposal to reduce the retirement age to 60
for both the private pension system and the AFPs. Congress has approved an
increase of the minimum pension from S/. 300 to S/. 415 a month.
The Government is considering proposals to improve the efficiency of
the private pension system, while maintaining the basic elements of the current
two-tier system. These proposals include the full-funding of the private pension
funds with individual capitalization accounts and restrictions on early
withdrawal of funds. The Government also expects to reduce the operating cost of
AFPs by lowering their required contributions to the SBS and streamlining
information disclosure requirements. The Government believes these measures will
allow AFPs to reduce commissions, which will continue to be determined by market
conditions.
PUBLIC SECTOR DEBT
The Republic's total public sector debt consists of foreign
currency-denominated and nuevo sol-denominated debt. The Republic's total public
external debt consists of loans from foreign creditors to the Government, the
Central Bank and public sector entities.
External Debt
Ninety-two percent of the Republic's public sector external debt
consists of foreign currency denominated debt. As of December 31, 2001, public
external debt totaled US$19.2 billion, or 35.1% of GDP, compared to US$19.6
billion, or 35.9% of GDP, as of December 31, 2000.
The following tables set forth further information on public sector
external debt for the periods shown.
Public Sector External Debt
(in millions of U.S. dollars, except for percentages)
As of
As of December 31, March 31,
------------------------------------------------------------ ----------
1997 1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- ----------- ----------
Official reserves liabilities:
IMF credit use............. US$ 869 US$ 756 US$ 589 US$ 349 US$ 202 US$ 134
----------- ---------- ----------- ----------- ----------- ----------
Total official reserves
liabilities............ 869 756 589 349 202 134
Official non-reserves
liabilities:
Public sector.............. 18,787 19,562 19,500 19,205 18,967 19,113
----------- ---------- ----------- ----------- ----------- ----------
Total official
non-reserves liabilities 18,787 19,562 19,500 19,205 18,967 19,113
----------- ---------- ----------- ----------- ---------- ----------
Total official liabilities US$ 19,656 US$ 20,318 US$ 20,089 US$ 19,554 US$ 19,169 US$ 19,427
=========== ========== =========== =========== ========== ==========
Total public sector external
debt,
as % of GDP(1)............. 31.8% 34.4% 37.7% 35.9% 35.1% N/A
Total public sector external
debt,
as % of total exports(1)... 206.2% 235.1% 233.6% 205.4% 205.5% N/A
- -------------------------
(1) The Republic does not include IMF credit use in reporting total public
sector external debt. Debt ratios are calculated on the basis of the
Republic's total official non-reserves liabilities.
N/A = Not Available.
Source: Central Bank.
Public Sector External Debt, Net of Reserves
(in millions of U.S. dollars, at current prices)
As of
As of December 31, March 31,
------------------------------------------------------------ ----------
1997 1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- ----------- ----------
Public sector external debt.. US$18,787 US$19,562 US$19,500 US$19,205 US$18,967 US$19,113
Gross international reserves
of the Central Bank........ (11,119) (9,982) (9,003) (8,563) (8,838) (8,940)
----------- ----------- ----------- ----------- ----------- ----------
Public sector external debt,
net
of reserves.............. US$ 7,668 US$ 9,580 US$10,497 US$10,642 US$10,129 US$10,173
=========== ========== =========== =========== ========== ==========
- ------------------------
Source: Central Bank.
Since 1997, the Republic's public sector external debt as a percentage
of GDP and as a percentage of total exports of goods and services has
fluctuated, rising from 31.8% of GDP and 206.2% of total exports of goods and
services in 1997 to 37.7% of GDP and 233.6% of total exports in 1999, before
dropping to 35.1% of GDP and 205.5% of total exports in 2001. This fluctuation
was due to decreases in nominal GDP from 1997 to 1999 and increases in nominal
GDP in 2000 and 2001.
During the period from 1997 to 2001, multilateral debt represented, on
average, 28.6% of the Republic's public sector external debt. The Republic's
principal multilateral creditors are the World Bank, representing, on average,
42.6% of outstanding multilateral debt each year from 1997 to 2001, and the IDB,
representing, on average, 44.6% of outstanding multilateral debt each year from
1997 to 2001. Loans from the World Bank have funded projects relating to
irrigation, agriculture, poverty reduction, education, health reform,
transportation and reconstruction efforts following the El Nino phenomenon in
1998. Loans from the IDB have been destined primarily for projects relating to
poverty reduction, education, financial-sector reform, state modernization
programs and reconstruction efforts following the El Nino phenomenon.
The following table sets forth information on capital flows from
multilateral lenders for the period from 1997 to 2001.
Capital Flows from Multilateral Lenders
(in millions of U.S. dollars)
As of
March 31,
---------
1997 1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- ----------- ----------
World Bank:
Disbursements minus principal
amortizations............ US$ 422.1 US$ 205.2 US$ 291.7 US$ 172.9 US$ 35.4 US$ (30.5)
Disbursements minus
principal, interests
and commissions.......... 306.6 82.1 131.9 (15.7) (150.8) (74.9)
IDB:
Disbursements minus
principal amortizations.. 449.4 175.0 377.1 (6.1) 267.6 (13.7)
Disbursements minus
principal, interests and
commissions.............. 329.5 36.9 222.6 (180.9) 95.7 (69.1)
- -------------------------------
Source: Ministry of Economy (Direccion General de Credito Publico, or Office
of Public Credit).
The Republic has signed a letter of intent with the IMF establishing a
US$316 million stand-by credit facility for 2002-2004. In this letter, the
Republic agreed to economic targets and performance criteria upon which IMF
support will be conditioned, including the following key economic targets for
2002:
o GDP growth of 3.5% to 4.0%;
o a consolidated public sector deficit of 1.9% of GDP, which was
later revised to 2.2% and then 2.3%, subject to IMF final
approval;
o current account deficit of less than 3.0% of GDP;
o a 2.5% inflation rate;
o revenues of $700 million generated through the sale of
concessions and state assets; and
o maintenance of gross reserves adequate to cover 10 months of
imports of goods and services and the equivalent of 1.5 times the
balance of external debt incurred in the following twelve months.
The Republic's main goal in seeking the letter of intent is to gain the
IMF's support and oversight for its economic program, in order to promote other
sources of foreign credit.
The following tables summarize public sector external debt by creditor
for the years indicated.
Public Sector External Debt by Creditor(1)
(in millions of U.S. dollars, at current prices)
As of
As of December 31, March 31,
------------------------------------------------------------ ----------
1997 1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- ----------- ----------
Official creditors:
Multilateral debt:
IDB........................ US$ 2,010 US$ 2,252 US$ 2,632 US$ 2,562 US$ 2,774 US$ 2,756
World Bank................. 1,919 2,127 2,417 2,590 2,626 2,595
IFAD(2).................... 28 28 27 23 23 22
IMF........................ 217 226 220 209 185 167
OPEC(3).................... 2 4 7 10 12 12
Other...................... 355 324 328 435 917 980
----------- ----------- ----------- ----------- ----------- ----------
Total multilateral debt.. 4,531 4,961 5,631 5,829 6,537 6,532
Bilateral debt:
Paris Club................. 5,803 6,033 5,350 4,904 4,493 4,454
United States.............. 1,406 1,172 1,117 1,059 997 993
Latin America.............. 213 152 96 75 71 71
East Europe countries and
China.................... 139 102 64 62 48 46
Japan...................... 1,468 1,740 2,163 2,429 2,198 2,196
Other countries............ 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Total bilateral debt..... 9,029 9,199 8,790 8,529 7,807 7,760
----------- ----------- ----------- ----------- ----------- ----------
Total official debt.... 13,560 14,160 14,421 14,358 14,344 14,292
Private creditors:
Banking...................... 155 249 225 110 21 21
Suppliers.................... 943 1,023 1,127 1,010 876 865
----------- ----------- ----------- ----------- ----------- ----------
Total private sector debt.. 1,098 1,272 1,352 1,120 897 886
Bonds:
Brady Bonds.................. 4,130 4,130 3,727 3,727 3,727 2,512
Global Bonds................. 0 0 0 0 0 1,423
----------- ----------- ----------- ----------- ----------- ----------
Total bonds................ 4,130 4,130 3,727 3,727 3,727 3,935
----------- ----------- ----------- ----------- ----------- ----------
Total public sector
external debt........ US$ 18,788 US$ 19,562 US$ 19,500 US$ 19,205 US$ 18,968 US$ 19,113
=========== =========== =========== =========== =========== ===========
- -------------------------------
(1) Medium- and long-term debt, excluding IMF financing.
(2) Refers to the International Fund for Agricultural Development.
(3) Refers to the Organization of Petroleum Exporting Countries.
Source: Ministry of Economy (Direccion General de Credito Publico, or Office of
Public Credit).
Public Sector External Debt by Creditor(1)
(as a percentage of total public sector external debt)
As of
As of December 31, March 31,
------------------------------------------------------------ ----------
1997 1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- ----------- ----------
Official creditors:
Multilateral debt:
IDB........................ 10.7% 11.5% 13.5% 13.3% 14.6% 14.4%
World Bank................. 10.2 10.9 12.4 13.5 13.8 13.6
IFAD(2).................... 0.1 0.1 0.1 0.1 0.1 0.1
IMF........................ 1.2 1.2 1.1 1.1 1.0 0.9
OPEC(3).................... 0.0 0.0 0.0 0.1 0.1 0.1
Other...................... 1.9 1.7 1.7 2.3 4.8 5.1
----------- ----------- ----------- ----------- ----------- ----------
Total multilateral debt.. 24.1 25.4 28.9 30.4 34.5 34.2
Bilateral debt:
Paris Club................. 30.9 30.8 27.4 25.5 23.7 23.3
United States.............. 7.5 6.0 5.7 5.5 5.3 5.2
Latin America.............. 1.1 0.8 0.5 0.4 0.4 0.4
East Europe countries and
China.................... 0.7 0.5 0.3 0.3 0.3 0.2
Japan...................... 7.8 8.9 11.1 12.6 11.6 11.5
Other countries............ 0.0 0.0 0.0 0.0 0.0 0.0
----------- ----------- ----------- ----------- ----------- ----------
Total bilateral debt..... 48.1 47.0 45.1 44.4 41.2 40.6
----------- ----------- ----------- ----------- ----------- ----------
Total official debt.... 72.2 72.4 74.0 74.8 75.6 74.8
Private creditors:
Banking...................... 0.8 1.3 1.2 0.6 0.1 0.1
Suppliers.................... 5.0 5.2 5.8 5.3 4.6 4.5
----------- ----------- ----------- ----------- ----------- ----------
Total private sector debt. 5.8 6.5 6.9 5.8 4.7 4.6
Bonds:
Brady Bonds.................. 22.0 21.1 19.1 19.4 19.6 13.2
Global Bonds................. 0 0 0 0 0 7.4
----------- ----------- ----------- ----------- ----------- ----------
Total bonds............... 22.0 21.1 19.1 19.4 19.6 20.6
----------- ----------- ----------- ----------- ----------- ----------
Total public sector
external debt....... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
=========== =========== =========== =========== =========== ==========
- -------------------------------
(1) Medium- and long-term debt, excluding IMF financing.
(2) Refers to the International Fund for Agricultural Development.
(3) Refers to the Organization of Petroleum Exporting Countries.
Source: Ministry of Economy (Direccion General de Credito
Publico, or Office of Public Credit).
As of December 31, 2001, medium- and long-term debt constituted 99.9%
of the Republic's public sector external debt. Approximately 67.5% of the
Republic's outstanding loans are for terms greater than 12 years. The following
table sets forth information regarding the terms of the Republic's public sector
external debt for the periods shown.
Public Sector External Debt Structure, by Maturity Date
(in millions of U.S. dollars and as a percentage of total public
sector external debt)(1)
As of
As of December 31, March 31,
------------------------------------------------------------ ----------
1997 1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- ----------- ----------
Short-term debt.............. US$ 81 US$ 43 US$ 10 US$ 34 US$ 23 US$ 20
Medium- and long-term debt... 19,656 20,318 20,089 19,554 19,169 19,247
Short-term debt (as % of total
public sector external debt). 0.4% 0.2% 0.0% 0.2% 0.1% 0.1%
- -----------------------------------
(1) Includes Central Bank debt.
Source: Central Bank.
The following table sets forth public sector external debt by currency,
as of March 31, 2002.
Summary of Public Sector External Debt by Currency(1)
(in millions of U.S. dollars, except for percentages)
As of March 31, 2002
----------------------------
Currency US$ %
---------- ----------
U.S. dollar.......................... 10,599,589 55.5
Japanese yen......................... 2,970,295 15.5
Special Drawing Rights (SDR)(2)...... 188,478 1.0
Single currency pool (SCP)(3)........ 1,185,891 6.2
IDB unit of account.................. 1,178,475 6.2
English pound........................ 199,147 1.0
Canadian dollar...................... 82,370 0.4
Swedish krona........................ 59,524 0.3
Norwegian kroner..................... 44,705 0.2
Euro................................. 2,604,259 13.6
Swiss franc.......................... 571 0.0
Venezuelan Bolivar................... 80 0.0
---------- ----------
Total............................. 19,113,384 100.0
========== ==========
- -----------------------
(1) Includes multilateral, Paris Club and suppliers debt.
(2) IMF unit of account, based on a basket of national currencies.
(3) World Bank unit of account, based on a basket of national currencies.
Source: Ministry of Economy (Direccion General de Credito Publico, or Office of
Public Credit).
From 1997 to 2001, total public sector external debt service ranged, as
a percentage of total fiscal revenue, from a low of 19.5% in 1998 to a high of
26.9% in 2000. Public sector external debt service measured as a percentage of
total exports of goods and services increased from 21.9% in 1997 to 24.3% in
1999, before dropping to 21.6% in 2001. For 2002, the Republic expects public
sector external debt service to represent 22.8% of total fiscal revenue and
33.6% of total exports of goods and services. As a percentage of GDP, public
sector external debt service increased from 3.4% in 1997 to 4.0% in 2000 before
dropping to 3.7% in 2001. It is expected to decrease to 3.2% in 2002.
The following table sets forth information regarding the Republic's
public sector external debt service for the periods indicated.
Public Sector External Debt Service(1)
As of December 31, As of March 31,
------------------------------------------------------------ ---------------------
1997 1998 1999 2000 2001 2001 2002
----------- ----------- ----------- ----------- ----------- ----------- ----------
Interest payments............ US$ 1,037 US$ 1,032 US$ 1,057 US$ 1,112 US$ 1,076 US$ 268 US$ 234
Amortization................. 955 738 971 1,042 918 205 1,059(3)
----------- ----------- ----------- ----------- ----------- ----------- ----------
Total public sector
external debt service... US$ 1,992 US$ 1,770 US$ 2,028 US$ 2,154 US$ 1,994 US$ 473 US$ 1,293
=========== =========== =========== =========== =========== =========== ===========
As % of total exports(2)..... 21.9% 21.3% 24.3% 23.0% 21.6% 21.5% 63.7%
As % of total exports and
workers' remittances....... 20.4 19.7 22.5 21.4 20.0 N/A N/A
As % of GDP.................. 3.4 3.1 3.9 4.0 3.7 3.7 9.7
As % of total fiscal revenue. 21.1 19.5 26.6 26.9 25.9 N/A N/A
- -----------------
(1) Excludes Central Bank debt.
(2) Includes exports of goods and services and investment income.
(3) Includes US$902 million in Brady Bonds exchanged for Global Bonds.
N/A = Not Available.
Source: Central Bank.
In 2001, interest payments decreased to US$1.08 billion, or 2.0% of
GDP, from US$1.1 billion in 2000, or 2.1% of GDP, as a result of a decrease in
international interest rates. In 2001, the Republic paid US$427 million in
interest to Paris Club creditors, US$423 million to multilateral creditors,
US$161 million to Brady bondholders and US$65 million to other creditors.
The following table sets forth estimated public sector external debt
service through 2007.
Estimated Public Sector Debt Service by Debtor (1)(2)
2003 - 2007
(in millions of U.S. dollars)
2003 2004 2005
---------------------------- ---------------------------- ----------------------------
Principal Interest Total Principal Interest Total Principal Interest Total
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Non-financial public
sector:
Central Government..... US$ 1,007 US$ 1,039 US$ 2,046 US$ 1,119 US$ 986 US$ 2,105 US$ 1,167 US$ 921 US$ 2,088
Public enterprises..... 28 13 41 28 12 40 29 11 40
--------- --------- --------- --------- --------- --------- --------- --------- ---------
1,035 1,052 2,087 1,147 998 2,145 1,196 932 2,128
Financial public sector.. 40 14 54 34 12 46 30 11 41
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total public sector.. US$ 1,075 US$1,066 US$ 2,141 US$ 1,181 US$ 1,010 US$ 2,191 US$ 1,226 US$ 943 US$ 2,169
========= ========= ========= ========= ========= ========= ========= ========= =========
2006 2007
---------------------------- ----------------------------
Principal Interest Total Principal Interest Total
--------- --------- --------- --------- --------- ---------
Non-financial public
sector:
Central Government..... US$ 1,201 US$ 854 US$ 2,055 US$ 1,246 US$ 798 US$ 2,044
Public enterprises..... 31 10 41 32 9 41
--------- --------- --------- --------- --------- ---------
1,232 864 2,096 1,278 807 2,085
Financial public sector.. 19 10 29 19 10 28
--------- --------- --------- --------- --------- ---------
Total public sector.. US$ 1,251 US$ 874 US$ 2,125 US$ 1,297 US$ 817 US$ 2,113
========= ========= ========= ========= ========= =========
- ---------------------------
(1)Disbursements preliminary estimates, as of March 2002.
(2)Includes Loans of COFIDE without the Republic Guarantee.
Source: Central Bank and Ministry of Economy (Direccion General de Credito
Publico, or Office of Public Credit).
The Republic issued public sector external bonds in connection with the
Brady restructuring. For a description of the Brady restructuring, see "--Debt
Management and Restructuring." As of March 31, 2002, approximately US$2.5
billion principal amount remained outstanding on the Brady bonds.
Domestic Debt
The following table sets forth total public sector domestic debt,
excluding intra-governmental debt.
Total Public Sector Domestic Debt
(in millions of U.S. dollars, at current prices)
As of
As of December 31, March 31,
------------------------------------------------------------ ----------
1997 1998 1999 2000 2001 2002
----------- ----------- ----------- ----------- ----------- ----------
Long-term debt:
Banco de la Nacion...... US$ 695.8 US$ 702.9 US$ 922.0 US$ 951.2 US$ 954.4 US$ 937.7
Treasury bonds.......... 123.7 150.6 1,006.0 977.4 1,504.3 1,644.1
Pension Reform Bonds.... N/A N/A 2,393.0 2,681.0 2,765.0 2,766.0
Other(1)................ 92.0 91.4 94.0 43.4 52.6 53.2
----------- ----------- ----------- ----------- ----------- -----------
Total long-term debt.. 911.5 944.9 4,415.0 4,653.0 5,276.3 5,401.0
Short-term debt........... N/A N/A 400.0 392.0 465.0 319.0
----------- ----------- ----------- ----------- ----------- -----------
Total............... N/A N/A US $4,815.0 US$ 5,045.0 US$ 5,741.3 US$ 5,720.0
=========== =========== =========== =========== =========== ===========
Total public sector
domestic debt, as %
of GDP................. N/A N/A 9.3% 9.4% N/A N/A
- ---------------------
(1) Includes credits from Banco de la Nacion to local governments and reflects
discrepancies in the data available from different government entities.
N/A = Not Available.
Source: Ministry of Economy (Direccion General de Credito Publico, or Office
of Public Credit), Central Bank.
The following table sets forth a list of the Republic's outstanding
domestic public sector bonds.
Public Sector Domestic Bonds(1)
(in millions of U.S. dollars, at current prices)
Principal Amount
Outstanding
as of March 31, 2002
--------------------
Central Bank capitalization bonds............... US$ 105
Financial system support bonds.................. 776
Debt securities................................. 244
Pension reform bonds............................ 2,766
Sovereign bonds................................. 486
Other bonds..................................... 34
--------------------
Total......................................... US$ 4,411
====================
- ---------------------------
(1) Excludes intra-government debt issued in the form of bonds.
Source: Central Bank.
In March 2001, the Government established a public auction system for
bonds in Peruvian legal currency. This system has increased the availability of
investment instruments in the domestic capital markets and reduced the
Republic's exposure to currency exchange risk.
Debt Management and Restructuring
The regional debt crisis, which started in 1982, resulted in growing
unwillingness on the part of foreign commercial banks to lend to the Republic.
At the same time, a sharp decrease in the export prices of mining products and
the 1982-1983 El Nino phenomenon led to a deterioration in the Republic's
balance of payments and fiscal accounts, which made it difficult for the
Republic to service its debt. Faced with an unsustainable debt burden, the
Government suspended payment on its external commercial bank debt in 1984. By
the end of 1984, the Republic had failed to make scheduled payments of US$1.0
billion in principal and interest on its commercial bank debt.
In 1985, the Garcia administration declared that service of the public
sector external debt would not exceed 10% of total exports. In 1986, the IMF
declared Peru ineligible for additional funds, and in 1987 the World Bank
suspended loan disbursements. Despite a decline in new loans, the Republic's
total public sector debt increased from US$10.9 billion to US$18.9 billion in
the period from 1985 to 1990, as unpaid interest continued to accrue.
In 1991, the Fujimori administration began a series of negotiations
that led to a normalization of relations with multilateral creditors. In
September 1991, the Republic paid all amounts in arrears owed to the IDB, and in
March 1993, it paid a total of US$1.8 billion in arrears owed to the IMF and the
World Bank. Since 1993, the IMF has approved the following credit facilities:
o in 1993, the IMF approved a US$1.5 billion Extended Fund Facility
for the period from 1993 to 1995;
o in 1996, the IMF approved a US$358 million Extended Fund Facility
for the period from 1996 to 1998;
o in 1999, the IMF approved a US$512 million Extended Fund Facility
for the period from 1999 to 2000; and
o in 2002, the IMF approved a US$316 million stand-by credit
facility for the period from 2002 to 2004.
These credit facilities were and are primarily intended to help the
Republic overcome its fiscal deficits.
The Fujimori administration also negotiated substantial reductions in
the Republic's short-term external debt with its principal bilateral creditors.
During the 1990s, the Republic conducted the following three rounds of
negotiations with the Paris Club:
o in September 1991, the Republic successfully rescheduled US$4.7
billion of its Paris Club debt maturing between October 1991 and
December 1992;
o in May 1993, the Republic rescheduled an additional US$1.9
billion of its Paris Club debt maturing between March 1993 and
March 1996; and
o in July 1996, the Republic rescheduled an additional US$6.8
billion of its Paris Club debt maturing between April 1996 and
December 1998.
As a result of this restructuring, the Republic obtained the following
extensions with respect to credits maturing in the relevant period:
o a 20-year extension for concessionary credits, with a 10-year
grace period; and
o a 14-year extension on commercial credits, representing the
majority of the Republic's Paris Club debt, with a 7-year grace
period.
Additionally, as a result of the 1996 restructuring, the Republic
obtained the following reductions in its debt:
o a reduction in debt payments from US$970 million per year to
approximately US$530 million per year with respect to
indebtedness maturing between April 1996 and December 1998; and
o a reduction in debt payments from US$1.2 billion per year to
approximately US$ 1.0 billion per year with respect to
indebtedness maturing between 1999 and 2006.
In 1997, the Republic renegotiated its debt with international
commercial banks under the Brady program. The Brady restructuring reduced the
Republic's international commercial bank debt from US$10.6 billion to US$4.9
billion, US$2.4 billion of which were Past-Due Interest, or "PDI," Bonds, US$1.7
billion Front-Loaded Interest Reduction Bonds, or "FLIRBs," US$572 million
Floating Rate, or "Discount," Bonds and US$183 million in Fixed Rate, or "Par,"
Bonds. The PDI Bonds and FLIRBs each have a 20-year term. The Discount Bonds and
the Par Bonds each have a 30-year term and are collateralized by zero-coupon
U.S. Treasury bonds.
In February 2002, the Republic launched its first international bond in
74 years. The Republic issued and sold the Global Bonds, raising US$500 million.
At the same time, the Republic retired US$1.2 billion in principal amount of
Brady bonds in exchange for a further US$923 million in principal amount of the
Global Bonds. The exchange lowered the Republic's debt by US$281 million and
freed up a further US$50 million in collateral backing the Brady bonds, the
issuance of the Global Bonds pushed up total debt by only US$170 million. After
issuing the Global Bonds and taking into account amortization of the PDI Bonds
in March 2002, the current amounts outstanding are US$1.1 billion of PDI Bonds,
US$1.2 billion of FLIRBs, US$198 million of Discount Bonds and US$64 million Par
Bonds.
Debt Record
Since the Brady restructuring in 1997, the Republic has serviced its
external debt without default except as described below.
Upon completion of the Brady restructuring, the Republic ceased making
payments of principal or interest to lenders who had failed to participate in
the restructuring. These lenders included Elliot Associates, L.P., a private
investment firm that acquired US$20.0 million in Peruvian debt. This firm
obtained a US$55.7 million judgment against the Republic for non-payment of
interest, and an attachment of the Republic's assets held at Chase Manhattan
Bank of New York, which the Republic had originally allocated for interest
payments on its Brady bonds. As a result, on September 7, 2000, the Republic
failed to make a required interest payment of US$80 million to its Brady
bondholders, even though it had deposited in its Chase account sufficient funds
with the purpose of making such payment. On September 26, 2000, Elliot
Associates, L.P. obtained an injunction against the clearing agency Euroclear
that prevented it from receiving or distributing funds supplied by the Republic
for the payment of interest on the Republic's Brady Bonds. The Elliot
Associates, L.P. litigation was settled following the issuance of the injunction
against Euroclear and the Republic made interest payments to its Brady
bondholders on October 4, 2000, within the 30-day applicable grace period for
the Brady bonds. The Republic has made all its debt payments to Elliot
Associates, L.P. in accordance with the terms of the settlement.
Four other creditors also failed to participate in the Brady
restructuring for reasons that included failure to provide the required
documentation and failure to identify the actual holder of the debt to be
exchanged. Since the Brady restructuring, the Republic has been in default on
payments to these creditors. As of March 31, 2002, these payments totaled
US$32.0 million in principal and interest. There are no further scheduled
amortizations or interest payments on these debts. None of these creditors has
submitted claims against the Republic for overdue amounts.
As of the date of this prospectus, the Republic is not aware of any
claims filed against it, in Peru or abroad, for overdue debt payments, nor is
the Republic involved in any disputes with its internal or external creditors.
DESCRIPTION OF THE SECURITIES
This prospectus provides a general description of the debt securities,
warrants and units that the Republic may offer. Each time the Republic sells
securities, the Republic will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus supplement
may also add, update or change information contained in this prospectus. If the
information in this prospectus differs from any prospectus supplement, you
should rely on the updated information in the prospectus supplement.
Debt Securities
The Republic will issue the debt securities pursuant to a fiscal agency
agreement, to be entered into by the Republic and a fiscal agent, prior to the
first issuance of debt securities, and substantially in the form appearing as an
exhibit to the registration statement of which this prospectus forms part.
The following description is a summary of the material provisions of
the debt securities and the fiscal agency agreement. You should read the fiscal
agency agreement, the form of debt securities attached at the end of the fiscal
agency agreement and the applicable prospectus supplement before making your
decision on whether to invest in the debt securities. The Republic has filed or
will file copies of these documents with the SEC and at the office of the fiscal
agent in The City of New York.
In this description of debt securities, you will see some capitalized
terms. These terms have particular legal meanings and you can find their
definitions under the heading "Defined Terms" below.
Overview
The prospectus supplement relating to any series of debt securities
offered will include specific terms relating to the debt securities of that
series. These terms will include some or all of the following:
o the title of the series of debt securities;
o any limit on the aggregate principal amount of the series of debt
securities;
o the issue price of the series of debt securities;
o the date or dates on which the series of debt securities will
mature;
o if the series of debt securities will bear interest, the interest
rate per annum, which may be fixed or floating, and the date or
dates from which interest, if any, will accrue;
o the dates on which interest, if any, on the series of debt
securities will be payable and the regular record dates for the
interest payment dates;
o any index, formula or other method the Republic will use to
determine the amount of principal or any premium or interest
payments and how it will use such index, formula or other method;
o the place or places where and manner in which principal, interest
and other payments, if any, with respect to the series of debt
securities will be paid;
o the form of debt security, global or certificated and registered
or bearer;
o if the series of debt securities will be guaranteed, who will be
the guarantor and whether the guarantee will be partial or full;
o any mandatory or optional sinking fund provisions;
o any provisions that allow the Republic to redeem the series of
debt securities at its option;
o any provisions that entitle the holders of the series of debt
securities to early repayment of all or a portion of the series
of debt securities at their option;
o the currency or currencies in which the series of debt securities
are denominated and the currency or currencies in which the
Republic will make payments;
o if other than the law of the State of New York, the law of the
jurisdiction governing the series of debt securities;
o the authorized denominations of the series of debt securities;
o any additional covenants or agreements of the Republic and any
additional events that automatically accelerate, or that give
holders the right to accelerate, the maturity of their debt
securities;
o any terms that allow holders to exchange or convert their debt
securities;
o whether the series of debt securities will be listed and, if
listed, the stock exchange on which these debt securities will be
listed; and
o any other terms of the series of debt securities.
The Republic may issue debt securities in exchange for other debt
securities or which are convertible into new debt securities. The specific terms
of the exchange or conversion of any debt security and the debt security for
which it will be exchangeable or converted will be described in the prospectus
supplement relating to the exchangeable or convertible debt security.
The Republic may issue debt securities at a discount below their stated
principal amount, bearing no interest or interest at a rate which, at the time
of issuance, is below market rates. The Republic may also issue debt securities
that have floating rates of interest but are exchangeable for fixed rate debt
securities. The specific terms of an offering of debt securities may raise
United States federal income tax considerations in addition to those described
herein. A description of any such considerations will be provided in the
applicable prospectus supplement.
The Republic is not required to issue all of its debt securities under
the fiscal agency agreement and this prospectus, but instead may issue debt
securities other than those described in this prospectus under other fiscal
agency agreements and documentation. That documentation may contain terms
different from those included in the fiscal agency agreement and described in
this prospectus.
Status
The debt securities will be direct, general, unconditional,
unsubordinated and unsecured obligations of the Republic. The Republic has
pledged its full faith and credit for the due and punctual payment of all
amounts due in respect of the debt securities. The debt securities will rank
pari passu, without any preference among themselves, with all other existing and
future unsecured and unsubordinated obligations of the Republic relating to
Public External Indebtedness.
Form and Denomination
Unless otherwise provided in the prospectus supplement for an offering,
the Republic will issue debt securities:
o denominated in U.S. dollars;
o in fully registered book-entry form;
o without coupons; and
o in denominations of US$1,000 and integral multiples of US$1,000.
Debt securities in book-entry form will be represented by one or more
global securities registered in the name of a nominee of the Depositary Trust
and Clearing Corporation, or "DTC". Beneficial ownership interests in a global
security will only be recorded on, and transferred through, the records
maintained by DTC and its participants, including the depositaries for Euroclear
Bank S.A./N.V. as operator of the Euroclear System and Clearstream Banking
societe anonyme.
Payments
Unless otherwise provided in the applicable prospectus supplement, the
Republic will pay:
o principal and interest payable on any maturity date in U.S.
dollars in immediately available funds to the person in whose
name such debt security is registered on the maturity date, upon
presentation and surrender of the debt security at the corporate
trust office of the fiscal agent or, subject to applicable laws
and regulations, at the office of any paying agent; and
o interest on each debt security, other than interest payable on
any maturity date, to the person in whose name the debt security
is registered at the close of business on the record date for the
relevant interest payment date.
Because each debt security will be represented by one or more global
notes and beneficial interests in the debt securities may not be exchanged for
debt securities in physically certificated form except in limited circumstances,
the Republic will make payments of principal and interest on each debt security
by directing the fiscal agent to make a wire transfer of U.S. dollars to DTC or
its nominee as the registered owner of the debt securities, which will receive
the funds for distribution to the beneficial owners. Upon receipt of any payment
of principal of or interest on any debt securities, DTC will credit the
appropriate DTC participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such debt
securities as shown on the records of DTC. Payments by DTC participants to
owners of beneficial interests in debt securities held through such participants
will be the responsibility of such participants. Beneficial owners should
contact the institution through which they intend to hold their beneficial
interests in debt securities to determine how payments of principal of or
interest on the those debt securities will be credited to their accounts.
None of the Republic, the fiscal agent or any paying agent will have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the debt
securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
If the Republic does not pay interest by wire transfer for any reason,
it will, subject to applicable laws and regulations, mail, or direct the fiscal
agent to mail, a check to the holder of the affected debt security on or before
the due date for the payment at the address that appears on the security
register maintained by the fiscal agent on the applicable record date.
The record date with respect to any interest payment date will be the
15th day prior to such date, whether or not such day is a business day.
Any payment of principal or interest required to be made on a payment
date which is not a business day need not be made on such day, but may be made
on the next succeeding business day with the same force and effect as if made on
such payment date, and no interest shall accrue with respect to such payment for
the period from and after such payment date.
The Republic agrees that so long as any of the debt securities are
outstanding, it will maintain a paying agent and a transfer agent in a Western
European city for payments on and transfers of the debt securities, which will
be Luxembourg so long as any debt securities are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange so require, a registrar
having a specified office in New York City and a paying agent having a specified
office in New York City. The Republic will appoint a paying agent and transfer
agent for the debt securities and a registrar. The Republic shall have the right
at any time to terminate any such appointment and to appoint any other paying
agents or transfer agents in such other places as it may deem appropriate upon
notice in accordance with "--Notices" below
Pending payment of principal or interest on the debt securities that
becomes due, the fiscal agent shall hold in trust, for the benefit of the
beneficial owners of the debt securities, the amounts transferred by the
Republic to the fiscal agent for such purpose. Any moneys held by the fiscal
agent in respect of the debt securities and remaining unclaimed for two years
after such amounts shall have become due and payable must be returned by the
fiscal agent to the Republic, and the holders of such debt securities shall
thereafter look only to the Republic for any payment to which such holders may
be entitled.
Redemption, Repurchase and Early Repayment
Unless otherwise provided in the applicable prospectus supplement, the
debt securities will not be redeemable before maturity at the option of the
Republic or repayable before maturity at the option of the holder. Nevertheless,
the Republic may at any time purchase or acquire any of the debt securities in
any manner and at any price. Debt securities that are purchased or acquired by
the Republic may, at the Republic's discretion, be held, resold or surrendered
to the fiscal agent for cancellation, but any debt securities so purchased by
the Republic may not be re-issued or resold except in compliance with the
Securities Act of 1933, as amended, which we refer to in theis prospectus as the
"Securities Act", and other applicable law.
Replacement, Exchange and Transfer of Debt Securities
Under certain limited circumstances, beneficial interests in any global
security representing debt securities may be exchanged for physical debt
securities. See "Book Entry; Delivery and Form." If the Republic issues physical
debt securities, the holder may present its debt securities for exchange with
debt securities of a different authorized denomination, together with a written
request for an exchange, at the office of the fiscal agent in the city of New
York, or at the office of any paying agent. In addition, the holder of any
physical debt security may transfer it in whole or in part by surrendering it at
any of these offices together with an executed instrument of transfer. The
Republic will not charge the holders for the costs and expenses associated with
the exchange, transfer or registration of transfer of the debt securities. The
Republic may, however, charge the holders for applicable stamp duty, tax or
other governmental charges.
If a physical debt security becomes mutilated, defaced, destroyed, lost
or stolen, the Republic may issue, and the fiscal agent will authenticate and
deliver, a substitute debt security in replacement. In each case, the affected
holder will be required to furnish to the Republic, the fiscal agent and certain
other specified parties an indemnity under which it will agree to pay the
Republic, the fiscal agent and certain other specified parties for any losses
the may suffer relating to the debt security that was mutilated, defaced,
destroyed, lost or stolen. The Republic and they fiscal agent may also require
that the applicant present other documents and proof. The affected holder will
be required to pay all expenses and reasonable charges associated with the
replacement of the mutilated, defaced, destroyed, lost or stolen debt security.
Additional Amounts
The payment by the Republic of principal of or interest on the debt
securities will be made without withholding or deduction for or on account of
any present or future taxes, duties, assessments or governmental charges of
whatever nature imposed or levied, collected, withheld or assessed by the
Republic, any political subdivision thereof or any taxing authority in the
Republic. If the Republic is required by law to make any such withholding or
deduction, it will pay such additional amounts, which we refer to in this
prospectus as the Additional Amounts, as may be necessary in order to ensure
that the net amounts receivable by the holders of the affected debt securities
after such withholding or deduction shall equal the amount that would have been
receivable in respect of such debt securities in the absence of such withholding
or deduction. The Republic will not, however, pay any Additional Amounts where
the holder is subject to such withholding or deduction due to one of the
following reasons:
o the holder has some connection with the Republic other than the
mere holding of such debt security or the receipt of principal of
or interest on any debt security;
o the holder has failed to comply with any reasonable
certification, identification or other reporting requirement
concerning the nationality, residence, identity or connection
with the Republic, or any political subdivision or taxing
authority thereof or therein, of the holder of a debt security or
any interest therein or rights in respect thereof, if compliance
is required by the Republic, or any political subdivision or
taxing authority thereof or therein, pursuant to applicable law
or to any international treaty in effect, as a precondition to
exemption from such deduction or withholding; or
o the holder has failed to present its debt security for payment
within 30 days after the Republic first makes available a payment
of principal or interest on such debt security.
Defined Terms
The following are certain definitions used in the debt securities:
"External Indebtedness" means obligations of, or guaranteed, whether by
contract, statute or otherwise, by the Republic for borrowed money or evidenced
by bonds, debentures, notes or similar instruments denominated or payable, or
which, at the option of the holder thereof, may be payable, in a currency other
than the currency of the Republic or by reference to a currency other than the
currency of the Republic, other than any such obligations originally issued or
incurred within the Republic.
"Public External Indebtedness" means, with respect to the Republic, any
External Indebtedness that (i) is in the form of, or represented by, bonds,
notes or other securities that are, or were intended at the time of issuance to
be, quoted, listed or traded on any securities exchange or other securities
market, including without limiting the generality of the foregoing, securities
for resale pursuant to Rule 144A under the Securities Act, or any successor law
or regulation of similar effect, and (ii) has an original maturity of more than
one year or are combined with a commitment so that the original maturity of one
year or less may be extended at the option of the Republic to a period in excess
of one year.
"Project Financing" means any financing of all or part of the costs of
the acquisition, construction or development of any project if the person or
persons providing such financing expressly agree to limit their recourse to the
project financed and the revenues derived from such project as the principal
source of repayment for the moneys advanced.
"Security Interest" means any security interest, including without
limitation any lien, pledge, mortgage, deed of trust or charge, or any
encumbrance or preferential arrangement that has the practical effect of
constituting a security interest.
Negative Pledge
The Republic undertakes with respect to each series of debt securities
that so long as any of the debt securities of that series remain outstanding, it
will not create or permit to subsist any Security Interest in the whole or any
part of its present or future revenues or assets to secure Public External
Indebtedness of the Republic, unless the debt securities of that series are
secured equally and ratably with such Public External Indebtedness; provided,
however, that the Republic may create or permit to subsist:
o Security Interests created prior to February 7, 2002;
o Security Interests securing Public External Indebtedness incurred
in connection with a Project Financing, provided that the
Security Interest is solely in assets or revenues of the project
for which the Project Financing was incurred;
o Security Interests securing Public External Indebtedness incurred
or assumed by the Republic to finance or refinance the
acquisition of the assets in which such Security Interests have
been created or permitted to subsist and any Security Interests
existing on such assets at the time of their acquisition;
o Security Interests securing Public External Indebtedness arising
in the ordinary course to finance export, import or other trade
transactions, and in which Public External Indebtedness matures,
after giving effect to all renewals and refinancing thereof, not
more than one year after the date on which such Public External
Indebtedness was originally incurred;
o Security Interests securing Public External Indebtedness which,
together with all other Public External Indebtedness secured by
Security Interests, excluding Public External Indebtedness
secured by other permitted Security Interests, does not exceed
US$25,000,000 principal amount, or its equivalent in other
currencies, in the aggregate;
o Security Interests arising by operation of a currently existing
law in connection with Public External Indebtedness, including
without limitation any right of set-off with respect to demand or
time deposits maintained with financial institutions and bankers'
liens with respect to property held by financial institutions, in
each case deposited with or delivered to such financial
institutions in the ordinary course of the depositor's
activities;
o Security Interests created in connection with the transactions
contemplated by the Republic's 1996 financing plan dated June 5,
1996, and its implementing documentation, including Security
Interests to secure obligations under the collateralized bonds
issued under the 1996 financing plan (the Republic's Par Bonds,
Discount Bonds and FLIRBs) and any Security Interest securing
obligations of the Republic outstanding as of June 5, 1996, to
the extent required to be equally and ratably secured with any
such bonds;
o Security Interests issued upon surrender or cancellation of the
Par Bonds, the Discount Bonds or the FLIRBs, or the principal
amount of any Public External Indebtedness outstanding as of June
5, 1996, in each case, to the extent such Security Interest is
created to secure Public External Indebtedness on a basis
comparable to the Par Bonds, the Discount Bonds and the FLIRBs;
o Security Interests on shares of, or other assets of, any present
or former Peruvian public sector entity created or granted by the
Republic in connection with, or in anticipation of, the
privatization of such entity; and
o any renewal or extension of any of the Security Interests stated
above.
Default; Acceleration of Maturity
Unless otherwise specified in the applicable prospectus supplement,
each of the following events will constitute an "Event of Default" under any
series of debt securities:
(1) Non-Payment:
o if the Republic fails to pay for 30 days principal on that
series of debt securities when due; or
o if the Republic fails to pay for 30 days interest on that
series of debt securities when due; or
(2) Breach of Other Obligations: if the Republic does not perform any
other obligation under that series of debt securities and such failure is
incapable of remedy or is not remedied within 60 days after written notice has
been given to the Republic by the fiscal agent; or
(3) Cross Default: if the Republic fails to make any payment in respect
of:
o External Indebtedness outstanding as of February 21, 2002;
and
o Public External Indebtedness;
in an aggregate principal amount in excess of US$25,000,000, or its equivalent
in any other currency, when due, and such failure continues beyond the
applicable grace period; or
(4) Cross Acceleration: if any event or condition occurs that results
in the acceleration of the maturity of:
o External Indebtedness outstanding as of February 21, 2002;
and
o Public External Indebtedness;
in an aggregate principal amount in excess of US$25,000,000, or its equivalent
in any other currency; or
(5) Moratorium: if the Republic declares a general suspension on or
moratorium with respect to the payment of principal of or interest on all or a
portion of its External Indebtedness; or
(6) Validity:
o if the Republic contests the validity of, or its obligations
under, that series of debt securities or, to the extent
adversely affecting such debt securities, the fiscal agency
agreement; or
o if the Republic denies any of its obligations under that
series of debt securities or, to the extent adversely
affecting such debt securities, the fiscal agency agreement;
or
o if any constitutional provision, treaty, law, regulation,
decree, or other official pronouncement of the Republic, or
any final decision by any court in Peru having jurisdiction,
renders it unlawful for the Republic to pay any amount due
on that series of debt securities or to perform any of its
obligations under such debt securities or, to the extent
adversely affecting such debt securities, the fiscal agency
agreement; or
(7) Judgments: if any writ, execution, attachment or similar process is
levied against all or any substantial part of the assets of the Republic in
connection with any judgment for the payment of money exceeding US$25,000,000,
or its equivalent in any other currency, and the Republic fails to satisfy or
discharge such judgment, or adequately bond, contest in good faith or receive a
stay or execution or continuance in respect of such judgment, within a period of
120 days; or
(8) Membership in the IMF: if Peru fails to maintain its membership in,
and its eligibility to use the general resources of, the IMF.
Upon the occurrence and during the continuance of an Event of Default:
o in the case of any Event of Default described in clauses (2),
(3), (4), (6), (7) or (8), the holders of at least 25% in
aggregate principal amount of all debt securities of that series,
other than debt securities of that series held by the Republic,
then outstanding may by written demand given to the Republic,
with a copy to the fiscal agent, declare the debt securities of
that series held by it to be immediately due and payable; or
o in the case of any Event of Default described in clauses (1) or
(5), each holder of debt securities of that series may by written
demand given to the Republic, with a copy to the fiscal agent,
declare the debt securities of that series held by it to be
immediately due and payable;
and upon such declaration the principal and interest accrued on the relevant
debt securities will become immediately due and payable upon the date that such
written notices are received at the office of the fiscal agent, unless prior to
such date all Events of Default in respect of the relevant debt securities have
been cured.
Securityholders holding in the aggregate at least 66 2/3% in principal
amount of the then outstanding debt securities of that series may waive any
existing defaults, and their consequences, on behalf of all holders of debt
securities of that series, if:
o following the declaration of the debt securities of that series
due and payable immediately, the Republic deposits with the
fiscal agent a sum sufficient to pay all overdue installments of
principal, interest and other amounts in respect of the debt
securities of that series, as well as the reasonable fees and
compensation of the fiscal agent; and
o all other events of default have been remedied.
Fiscal Agent
The fiscal agency agreement establishes the obligations and duties of
the fiscal agent, the right to indemnification of the fiscal agent and the
liability and responsibility, including limitations on liabilities and
responsibilities, for actions that the fiscal agent takes. The fiscal agent is
entitled to enter into business transactions with the Republic as freely as if
it were not the fiscal agent.
The Republic may replace the fiscal agent at any time, subject to the
appointment of a replacement fiscal agent. In addition, the Republic may appoint
different fiscal agents for different series of debt securities. The fiscal
agent is not a trustee for the holders of debt securities and does not have the
same responsibilities or duties to act for such holders as would a trustee. The
Republic may maintain deposit accounts and conduct other banking and financial
transactions with the fiscal agent.
Paying Agents; Transfer Agents; Registrar
The Republic may appoint paying agents, transfer agents and registrars
with respect to any series of debt securities, which will be listed at the back
of the applicable prospectus supplement. While the Republic may at any time
appoint additional or replacement paying agents, transfer agents and registrars,
it will, however, maintain a paying agent and a registrar in The City of New
York until the debt securities are paid.
In addition, the Republic will maintain a paying agent and a transfer
agent in Luxembourg with respect to any series of debt securities listed on the
Luxembourg Stock Exchange so long as the rules of the Luxembourg Stock Exchange
so require. The Republic will promptly provide notice of the termination,
appointment or change in the office of any paying agent, transfer agent or
registrar acting in connection with a series of the debt securities.
Amendments and Waivers
The Republic and the fiscal agent may, with the consent of the holders
of at least 66 2/3% in aggregate principal amount of the then outstanding debt
securities of any series, modify and amend the provisions of that series of debt
securities or the fiscal agency agreement, including to grant waivers of future
compliance or past default by the Republic. However, no such amendment or
modification will apply, without the consent of each securityholder of the
relevant series affected thereby, to the debt securities owned or held by such
securityholder with respect to the following matters:
o change the stated maturity of the principal of or interest on
debt securities of that series;
o reduce the principal amount of or interest on debt securities of
that series;
o change the obligation of the Republic to pay additional amounts
on account of withholding or deductions as set forth under
"--Additional Amounts";
o change the currency or place of payment of principal or interest
on debt securities of that series; and
o impair the right to institute suit for the enforcement of any
payment in respect of debt securities of that series.
In addition, no such amendment or notification may, without the consent
of each securityholder of the relevant series of debt securities, reduce the
percentage of principal amount of the debt securities of that series outstanding
necessary to make these modifications or amendments to the debt securities of
that series or the fiscal agency agreement or to reduce the quorum requirements
or the percentages of votes required for the adoption of any action at a meeting
of holders of that series of debt securities.
The Republic may also agree to amend any provision of any debt security
with the holder thereof, but that amendment will not affect the rights of the
other securityholders or the obligations of the Republic with respect to the
other securityholders.
No consent of the securityholders is or will be required for any
modification or amendment requested by the Republic or by the fiscal agent or
with the consent of the Republic to:
o add to the Republic's covenants for the benefit of the holders of
any series of debt securities;
o surrender any right or power of the Republic in respect of any
series of debt securities or the fiscal agency agreement;
o provide security or collateral for any series of debt securities;
o cure any ambiguity in any provision, or correct any defective
provision, of any series of debt securities; or
o change the terms and conditions of any series of debt securities
or the fiscal agency agreement in any manner which the Republic
and the fiscal agent mutually deem necessary or desirable so long
as any such change does not, and will not, adversely affect the
rights or interest of any securityholder.
The Republic may at any time ask for written consents or call a meeting
of the holders of any series of debt securities to seek their approval of the
modification of or amendment to, or obtain a waiver of, any provision of that
series of debt securities. This meeting will be held at the time and place
determined by the Republic and specified in a notice of such meeting furnished
to the affected securityholders. This notice must be given at least 30 days and
not more than 60 days prior to the meeting.
If at any time the holders of at least 10% in principal amount for any
then outstanding series of debt securities request the fiscal agent to call a
meeting of the holders of that series of debt securities for any purpose, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, the fiscal agent will call the meeting for such purpose.
This meeting will be held at the time and place determined by the fiscal agent,
after consultation with the Republic, and specified in a notice of such meeting
furnished to the affected securityholders. This notice must be given at least 30
days and not more than 60 days prior to the meeting.
Holders who hold a majority in principal amount of the then outstanding
debt securities of that series will constitute a quorum at a securityholders'
meeting. In the absence of a quorum, a meeting may be adjourned for a period of
at least 20 days. At the reconvening of a meeting adjourned for lack of quorum,
holders of 25% in principal amount of the then outstanding debt securities of
that series shall constitute a quorum. Notice of the reconvening of any meeting
may be given only once, but must be given at least ten days and not more than 15
days prior to the meeting.
At any meeting when there is a quorum present, holders of at least 66 2/3%
in principal amount of the debt securities of that series represented and voting
at the meeting may approve the modification or amendment of, or a waiver of
compliance for, any provision of the debt securities of that series except for
specified matters requiring the consent of each securityholder as set forth
above. Modifications, amendments or waivers made at such a meeting will be
binding on all current and future holders of debt securities of that series.
Notices
Notices will be mailed to holders of debt securities at their
registered addresses and will be deemed to have been given on the date of such
mailing. All notices to holders of the debt securities will be published if and
so long as the debt securities are listed on the Luxembourg Stock Exchange and
the rules of the Luxembourg Stock Exchange so require in a daily newspaper of
general circulation in Luxembourg. If publication as aforesaid is not
practicable, notice will be validly given if made in accordance with the rules
of the Luxembourg Stock Exchange.
Further Issues
Without the consent of the holders, the Republic may create and issue
additional debt securities with the same terms and conditions as an outstanding
series of debt securities, or the same except for the payment of interest
scheduled on them and paid prior to the time of their issue. The Republic may
consolidate the additional debt securities to form a single series with an
outstanding series of debt securities.
Warrants
If the Republic issues warrants, their specific terms will be provided
in a prospectus supplement, and a warrant agreement or amendment to the fiscal
agency agreement and form of warrant will be filed with the SEC. The following
description briefly summarizes some of the general terms that apply to warrants.
You should read the applicable prospectus supplement, warrant agreement and form
of warrant before making your investment decision.
The Republic may issue warrants or other similar securities, either
separately or together with any debt securities, that would entitle the holder
to purchase debt securities or obligate the Republic to repurchase or exchange
debt securities. If the Republic issues any warrants, each issue of warrants
will be issued under a warrant agreement to be entered into between the Republic
and a bank or trust company, which may be the fiscal agent, as warrant agent.
The warrant agent will act solely as the agent of the Republic in connection
with the warrants of such issue and will not assume any obligation or
relationship of agency for or with the holders or beneficial owners of warrants.
The prospectus supplement relating to the particular issue of warrants or other
similar securities will describe:
o the initial offering price;
o the currency required to purchase the warrants;
o the title and terms of the debt securities or other consideration
that the holders will receive on exercise of their warrants;
o the principal amount of debt securities or amount of other
consideration that a holder will receive on exercise of each
warrant;
o the principal amount and type of debt securities that the holders
may obligate the Republic to purchase or exchange if the holders
exercise their warrants and the purchase price of those debt
securities;
o the exercise price or ratio;
o the procedures of, and conditions to, exercise of the warrants
and the date or dates on which the holders can exercise their
warrants;
o whether and under what conditions the Republic may cancel the
warrants;
o the title and terms of any debt securities issued with the
warrants, and the amount of debt securities issued with each
warrant;
o the date, if any, on and after which the warrants and any debt
securities issued with the warrants will trade separately;
o the form of the warrants (global or certificated and registered),
whether they will be exchangeable for another form and, if
registered, where they may be transferred and exchanged;
o the identity of the warrant agent;
o any special U.S. federal income tax considerations; and
o any other terms of the warrants.
The warrants will be direct, unconditional and unsecured obligations of
the Republic and will not constitute indebtedness of the Republic.
Units
The Republic may issue units comprised of one or more of the other
securities described in this prospectus in any combination. Each unit will be
issued so that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the rights and
obligations of a holder of each included security. The unit agreement under
which a unit is issued may provide that the securities included in the unit may
not be held or transferred separately, at any time or at any time before a
specified date.
The prospectus supplement relating to the particular issue of units
will describe:
o the designation and terms of the units and of the securities
comprising the units, including whether and under what
circumstances those securities may be held or transferred
separately;
o any provisions for the issuance, payment, settlement, transfer or
exchange of the units or of the securities comprising the units;
and
o whether the units will be issued in fully registered or global
form.
The applicable prospectus supplement will describe the terms of any
units. The preceding description and any description of units in the applicable
prospectus supplement does not purport to be complete and is subject to and is
qualified in its entirety by reference to the unit agreement and, if applicable,
collateral arrangements and depositary arrangements relating to such units.
Jurisdiction, Consent to Service and Enforceability
The Republic is a foreign sovereign state. Consequently, it may be
difficult for you to obtain or realize upon judgments of courts in the United
States or elsewhere against the Republic. Furthermore, it may be difficult for
you to enforce, in the United States or elsewhere, the judgments of U.S. or
foreign courts against the Republic.
In connection with any suit, action or proceeding against the Republic
or its properties, assets or revenues arising out of or relating to the fiscal
agency agreement or any debt securities or warrants, which we refer to in this
prospectus as a related proceeding, the Republic will agree:
o to submit to the exclusive jurisdiction of any New York State or
U.S. federal court sitting in New York City, and any appellate
court thereof;
o that all claims in respect of such related proceeding may be
heard and determined in such New York State or U.S. federal
court; that any judgment obtained in such New York State or U.S.
federal court arising out of any related proceeding may be
enforced or executed in any other court of competent jurisdiction
whatsoever; and that any judgment obtained in any such other
court as a result of such enforcement or execution may be
enforced or executed in any such other court of competent
jurisdiction, by means of a suit on the judgment or in any other
manner provided by law; provided that in order to enforce or
execute any such judgment ordering any payment by the Republic,
Peruvian courts will require that such payment be included in the
corresponding annual budget laws;
o to consent to and waive, to the fullest extent permitted by law,
any objection which it may have to the laying of venue of any
related proceeding brought in such New York State or U.S. federal
court or to the laying of venue of any suit, action or proceeding
brought solely for the purpose of enforcing or executing any
related judgment in such New York State or U.S. federal court or
any other courts;
o to waive, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of any related
proceeding or any such suit, action or proceeding in any such
court; and
o to appoint CT Corporation System, presently located at 111 Eighth
Avenue, 13th Floor, New York, New York, as its process agent and
to maintain at all times an agent with offices in New York to act
as its process agent.
The process agent will receive on behalf of the Republic and its
property service of all writs, process and summonses in any related proceeding
or any suit, action or proceeding to enforce or execute any related judgment
brought against it in such New York State or U.S. federal courts sitting in New
York City. Failure of the process agent to give any notice to the Republic of
any such service of process shall not impair or affect the validity of such
service or of any judgment based thereon. Nothing in the fiscal agency agreement
shall in any way be deemed to limit the ability to serve any such writs, process
or summonses in any other manner permitted by applicable law.
To the extent that the Republic or any of its revenues, assets or
properties may be entitled to any sovereign or other immunity under any law, the
Republic will agree not to claim and to waive such immunity to the fullest
extent permitted by the laws of such jurisdiction. This waiver covers the
Republic's sovereign immunity and immunity from prejudgment attachment,
post-judgment attachment and attachment in aid, but does not extend to the
attachment of revenues, assets and property of the Republic located in the
Republic unless permitted under Peruvian law. Additionally, in accordance with
Peruvian law currently in effect, the Republic's waiver of immunity will not
extend to property that is:
o used by a diplomatic or consular mission of the Republic;
o of a military character and under the control of a military
authority or defense agency of the Republic;
o public property;
o shares of Peruvian public sector entities or shares of Peruvian
private sector entities owned or controlled by the Republic or by
a Peruvian public sector entity, or revenues collected from the
sale of such shares, to the extent such shares or revenues are
exempt by Peruvian law from attachment or execution; or
o funds deposited in Peru's accounts held in the Peruvian financial
system.
The Republic, however, reserves the right to plead sovereign immunity
under the U.S. Foreign Sovereign Immunities Act of 1976, which we refer to in
this prospectus as the Immunities Act, with respect to actions brought against
it under U.S. federal securities laws or any state securities law. Without an
effective waiver of immunity by the Republic with respect to such actions, it
would be impossible to obtain a U.S. judgment in such an action against the
Republic unless a court were to determine that the Republic is not entitled
under the Immunities Act to sovereign immunity with respect to such action. In
addition, execution upon property of the Republic located in the United States
to enforce a judgment obtained the Immunities Act may not be possible except in
the limited circumstances specified in the Immunities Act.
Even if a U.S. judgment could be obtained against the Republic in any
such action, you may not be able to enforce in Peru a judgment based on such a
U.S. judgment.
The Republic will also consent generally for the purposes of the State
Immunity Act of 1978 of the United Kingdom to the giving of any relief or the
issue of any process.
Governing Law
The fiscal agency agreement and, unless otherwise provided in the
applicable prospectus supplement, any warrant agreement, as well as any debt
securities, warrants or units, will be governed by and must be interpreted in
accordance with the laws of the State of New York, except that all matters
governing authorization and execution by the Republic will be governed by the
laws of the Republic.
Book-Entry; Delivery and Form
Unless otherwise provided in the applicable prospectus supplement, the
certificates representing the debt securities will be issued in the form of one
or more global notes, to which we refer to in this prospectus as the global
notes. Each global note will be deposited with or on behalf of DTC and
registered in the name of DTC or its nominee. Except as set forth below, a
global note may be transferred in whole and not in part and only to DTC or to
other nominees of DTC.
Ownership of beneficial interests in the global notes will be limited
to "participants" who have accounts with DTC or persons who hold interests
through participants. Ownership of beneficial interests in the global notes will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee with respect to interests of
participants and the records of participants with respect to interests of
persons other than participants.
The Republic understands that DTC is:
o a limited purpose trust company organized under the laws of the
State of New York;
o a "banking organization" within the meaning of the New York
Banking Law;
o a member of the Federal Reserve System;
o a "clearing corporation" within the meaning of the Uniform
Commercial Code; and
o a "Clearing Agency" registered pursuant to the provisions of
Section 17A of the Exchange Act of 1934, as amended.
DTC was created to hold securities for its participants and facilitate
the clearance and settlement of securities transactions between participants
through electronic book-entry changes in accounts of its participants, thereby
eliminating the need for the physical movement of certificates. Indirect access
to the DTC system is available to others such as banks, brokers, dealers and
trust companies and certain other organizations that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants").
So long as DTC, or its nominee, is the registered owner or holder of
the global notes, DTC or its nominee, as the case may be, will be considered the
sole owner or holder of the debt securities represented by the global notes for
all purposes under the fiscal agency agreement and the debt securities. No
beneficial owner of an interest in any global note will be able to transfer that
interest except in accordance with DTC's applicable procedures, in addition to
those provided for under the fiscal agency agreement and, if applicable, those
of Euroclear Bank S.A./N.V., as operator of the Euroclear System, or Euroclear,
and Clearstream Banking, Luxembourg, societe anonyme, or Clearstream,
Luxembourg.
Payments of the principal of, and interest on, the global notes will be
made to DTC or its nominee, as the case may be, as the registered owner of the
global notes. Neither the Republic, the fiscal agent nor any paying agent will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the global
notes or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Republic expects that DTC or its nominee, upon receipt of any
payment of principal or interest in respect of the global notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global notes as
shown on the records of DTC or its nominee. The Republic also expects that
payments by participants to owners of beneficial interests in the global notes
held through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in the names of nominees for such customers. Such payments
will be the responsibility of such participants.
The Republic expects that DTC will take any action permitted to be
taken by a holder of any debt security, including the presentation of such debt
security for exchange as described below, only at the direction of one or more
participants to whose account the DTC interests in the global note is credited
and only in respect of such portion of the aggregate principal amount of such
debt security as to which such participant or participants has or have given
such direction. However, if there is an event of default under the any series of
debt securities, DTC will exchange the applicable global notes for registered
certificated notes, which it will distribute to its participants.
If DTC is at any time unwilling or unable to continue as a depositary
for the global notes and a successor depositary is not appointed by the Republic
within 90 days, the Republic will issue registered certificated notes without
interest coupons in exchange for the global notes.
Transfers between participants in DTC will be effected in the ordinary
way in accordance with DTC rules and will be settled in same-day funds.
Transfers between participants in Euroclear and Clearstream, Luxembourg will be
effected in the ordinary way in accordance with their respective rules and
operating procedures.
Subject to compliance, if any, with the transfer restrictions
applicable to the debt securities, cross-market transfers between participants
in DTC, on the one hand, and Euroclear or Clearstream, Luxembourg
accountholders, on the other hand, will be effected through DTC in accordance
with DTC's rules on behalf of Euroclear or Clearstream, Luxembourg, as the case
may be, by its respective depositary. However, any cross-market transactions
will require delivery of instructions to Euroclear or Clearstream, Luxembourg,
as the case may be, by the counterparty in such system in accordance with the
rules and procedures and within the established deadlines (Brussels time) of
such system. Euroclear or Clearstream Luxembourg, as the case may be, will, if
the transaction meets its respective settlement requirements, deliver
instructions to its respective depositary to take action to effect final
settlement on its behalf by delivering or receiving interests in the global
notes to DTC, and making or receiving payments in accordance with normal
procedures for same-day fund settlement applicable to DTC. Euroclear
accountholders and Clearstream, Luxembourg participants may not deliver
instructions directly to the depositaries for Euroclear or Clearstream,
Luxembourg.
Because of time zone differences, the securities account of a Euroclear
or Clearstream, Luxembourg accountholder purchasing an interest in any global
note from a participant in DTC will be credited, and any such crediting will be
reported to the relevant Euroclear or Clearstream, Luxembourg accountholder,
during the securities settlement processing day, which must be a business day
for Euroclear and Clearstream, Luxembourg immediately following the settlement
date of DTC. Cash received in Euroclear or Clearstream, Luxembourg as a result
of sales of interests in any global note by or through a Euroclear or
Clearstream, Luxembourg accountholder to a participant in DTC will be received
with value on the settlement date of DTC but will be available in the relevant
Euroclear or Clearstream, Luxembourg cash account only as of the business day
for Euroclear or Clearstream, Luxembourg following DTC's settlement date.
Although DTC, Euroclear and Clearstream, Luxembourg are expected to
follow the foregoing procedures in order to facilitate transfers of interests in
the global notes among the participants of DTC, Euroclear and Clearstream,
Luxembourg, they are under no obligation to perform or continue to perform such
procedures and such procedures may be discontinued at any time. Neither the
Republic nor the fiscal agent will have any responsibility for the performance
by DTC, Euroclear or Clearstream, Luxembourg, or their respective participants
or indirect participants of their respective obligations under the rules and
procedures governing their operations.
TAXATION
United States Federal Taxation
The specific terms of an offering of debt securities may raise United
States federal income tax considerations in addition to those described below. A
description of any such considerations, or certain United States federal income
tax considerations related to the offering of warrants or units, will be
provided in the applicable prospectus supplement.
In general, a United States person who holds the debt securities or
owns a beneficial interest in the debt securities will be subject to United
States federal taxation. You are a United States person for U.S. federal income
tax purposes if you are:
o a citizen or resident of the United States or its territories,
possessions or other areas subject to its jurisdiction;
o a corporation, partnership or other entity organized under the
laws of the United States or any political subdivision;
o an estate, the income of which is subject to United States
federal income taxation regardless of its source; or
o a trust if (i) a United States court is able to exercise primary
supervision over the trust's administration and (ii) one or more
United States persons have the authority to control all of the
trust's substantial decisions.
If you are a United States person, the interest you receive on the debt
securities will generally be subject to United States taxation and will be
considered ordinary interest income. Under current United States federal income
tax law, if you are not a United States person, the interest payments that you
receive on the debt securities generally will be exempt from United States
federal income taxes, including withholding tax. However, to receive this
exemption you may be required to satisfy certain certification requirements,
described below, of the United States Internal Revenue Service to establish that
you are not a United States person.
Even if you are not a United States person, you may still be subject to
United States federal income taxes on any interest payments you receive if:
o you are an insurance company carrying on a United States insurance
business, within the meaning of the United States Internal Revenue
Code of 1986; or
o you have an office or other fixed place of business in the United
States that receives the interest and you earn the interest in the
course of operating (i) a banking, financing or similar business
in the United States or (ii) a corporation the principal business
of which is trading in stock or securities for its own account,
and certain other conditions exist.
If you are not a United States person, any gain you realize on a sale
or exchange of the debt securities generally will be exempt from United States
federal income tax, including withholding tax, unless:
o your gain is effectively connected with your conduct of a trade or
business in the United States; or
o you are an individual holder and are present in the United States
for 183 days or more in the taxable year of the sale, and either
(i) your gain is attributable to an office or other fixed place of
business that you maintain in the United States or (ii) you have a
tax home in the United States.
The fiscal agent must file information returns with the United States
Internal Revenue Service in connection with debt security payments made to
certain United States persons. If you are a United States person, you generally
will not be subject to United States backup withholding tax on such payments if
you provide your taxpayer identification number to the fiscal agent. You may
also be subject to information reporting and backup withholding tax requirements
with respect to the proceeds from a sale of the debt securities. If you are not
a United States person, in order to avoid information reporting and backup
withholding tax requirements you may have to comply with certification
procedures to establish that you are not a United States person.
Debt securities held by an individual holder who at the time of death
is a non-resident alien will not be subject to United States federal estate tax.
The specific terms of an offering of debt securities may raise United
States federal income tax considerations in addition to those described above. A
description of any such considerations will be provided in the applicable
prospectus supplement.
PLAN OF DISTRIBUTION
General
The Republic may sell the securities in any of three ways:
o through underwriters or dealers;
o directly to one or more purchasers; or
o through agents.
Each prospectus supplement will set forth, relating to an issuance of
the securities:
o the name or names of any underwriters or agents;
o the purchase price of the securities;
o the net proceeds to the Republic from the sale of the securities;
o any underwriting discounts, and other items constituting
underwriters' compensation;
o any agents' commissions and other items constituting agents'
compensation;
o any initial public offering price of the securities;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
o any securities exchange on which such securities may be listed.
If the Republic uses underwriters or dealers in a sale, they will
acquire the securities for their own accounts and may resell them in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The Republic may
offer the securities to the public either through underwriting syndicates
represented by managing underwriters or directly through underwriters. The
obligations of the underwriters to purchase a particular offering of securities
may be subject to conditions. The underwriters may change the initial public
offering price or any concessions allowed or reallowed or paid to dealers.
In compliance with guidelines of the National Association of Securities
Dealers, Inc., or NASD, the maximum commission or discount to be received by any
NASD member or independent broker dealer may not exceed 8% of the aggegate
amount of the securities offered pursuant to this propectus and any applicable
prospectus supplement; however, it is anticipated that the maximum commission or
discount to be received in any particular offering of securities will be
significantly less than this amount.
The Republic may also sell the securities directly to the public or
through agents. Unless specified otherwise in the applicable prospectus
supplement, any agent will act on a reasonable best efforts basis for the period
of its appointment.
The Republic may authorize agents, underwriters or dealers to solicit
offers by certain institutions to purchase a particular offering of securities
at the public offering price using delayed delivery contracts. These contracts
provide for payment and delivery on a specified date in the future. The
applicable prospectus supplement will describe the commission payable for
solicitation and the terms and conditions of these contracts.
The Republic may offer the securities to holders of other securities of
the Republic as consideration for the Republic's purchase or exchange of other
securities. The Republic may conduct such an offer either (a) through a publicly
announced tender or exchange offer for the other securities or (b) through
privately negotiated transactions. This type of offer may be in addition to
sales of the same securities using the methods discussed above.
The Republic may agree to indemnify any agents and underwriters against
certain liabilities, including liabilities under the Securities, which we refer
to in this prospectus as the Securities Act. The agents and underwriters may
also be entitled to contribution from the Republic for payments they make
relating to these liabilities. Agents and underwriters may engage in
transactions with or perform services for the Republic in the ordinary course of
business.
Non-U.S. Offerings
The Republic will generally not register under the Securities Act the
securities that it will offer and sell outside the United States. Thus, subject
to certain exceptions, the Republic cannot offer, sell or deliver such
securities within the United States or to U.S. persons. When the Republic offers
or sells securities outside the United States, each underwriter, dealer or agent
will acknowledge that the securities:
o have not been and will not be registered under the Securities
Act; and
o may not be offered or sold within the United States except
pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act.
Each underwriter, dealer or agent will agree that:
o it has not offered or sold or solicited offers to purchase, and
will not offer or sell or solicit offers to purchase, any such
securities not registered with the Securities and Exchange
Commission, or SEC, within the United States, except pursuant to
Rule 903 of Regulation S under the Securities Act; and
o neither it nor its affiliates nor any persons acting on its or
their behalf have engaged or will engage in any directed selling
efforts regarding these securities.
OFFICIAL STATEMENTS
Information included in this prospectus that is identified as being
derived from a publication of the Republic or one of its agencies or
instrumentalities is included in this prospectus on the authority of such
publication as a public official document of the Republic. All other information
included in this prospectus, other than that included in "Plan of Distribution,"
is included as a public official statement made on the authority of the
Republic.
VALIDITY OF THE SECURITIES
The following persons, or other counsel specified in the relevant
prospectus supplement, will pass upon the validity of the securities:
o For the Republic:
o Cleary, Gottlieb, Steen & Hamilton, New York counsel to the
Republic; and
o Peruvian counsel to the Republic specified in the applicable
prospectus supplement.
As to all matters of Peruvian law, Cleary Gottlieb, Steen & Hamilton
may rely on the opinion of the Peruvian counsel to the Republic specified in the
applicable prospectus supplement. As to all matters of United States law, the
Peruvian counsel to the Republic specified in the applicable prospectus
supplement may rely on the opinion of Cleary, Gottlieb, Steen & Hamilton.
o For the Underwriters:
o Sullivan & Cromwell LLP, New York counsel to the underwriters; and
o Peruvian counsel to the underwriters specified in the applicable
prospectus supplement.
As to all matters of Peruvian law, Sullivan & Cromwell LLP may rely on
the opinion of the Peruvian counsel to the underwriters specified in the
applicable prospectus supplement. As to all matters of United States law,
Peruvian counsel to the underwriters specified in the applicable pricing
supplement may rely on the opinion of Sullivan & Cromwell.
AUTHORIZED REPRESENTATIVE
The authorized representative of the Republic in the United States is
Gabriel Pacheco Crespo of the Consulate General of Peru, whose address is 241
East 49th Street, New York, New York 10017.
WHERE YOU CAN FIND MORE INFORMATION
The Republic has filed with the SEC a registration statement under the
Securities Act covering the securities. This prospectus does not contain all of
the information included in the registration statement. Any statement made in
this prospectus concerning the contents of any contract, agreement or other
document is not necessarily complete. If the Republic has filed any contract,
agreement or other document as an exhibit to the registration statement, you
should read the exhibit for a more complete understanding of the document or
matter involved. Each statement regarding a contract, agreement or other
document is qualified in its entirety by reference to the actual document.
You may read and copy the registration statement, including its various
exhibits, and any reports, statements or other information that the Republic has
filed at the SEC's public reference room in Washington, D.C. You can request
copies of these documents, upon payment of a duplicating fee, by writing the
SEC. Please call the SEC at l-800-SEC-0330 for further information on the
operation of the public reference rooms. Our SEC filings are also available to
the public from the SEC's website at http://www.sec.gov.
ANNEX A
REPUBLIC OF PERU: GLOBAL PUBLIC SECTOR EXTERNAL DEBT
TABLES AND OTHER SUPPLEMENTAL INFORMATION
as of December 31, 2001
(in millions of U.S. dollars, at current prices)
Type of
Type of Lender Country Lender Currency Interest Rate
- --------------- ---------- ----------------------------- -------- ----------------
Paris Club Germany HERMES Kreditversicherungs-AG EURO Fixed
Paris Club Germany HERMES Kreditversicherungs-AG EURO Fixed
Paris Club Germany HERMES Kreditversicherungs-AG EURO Fixed
Paris Club Germany HERMES Kreditversicherungs-AG EURO Fixed
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Germany Kreditanstalt fur Wiederaufbau EURO Fixed
(KFW)
Paris Club Austria Oesterreichische Kontrollbank EURO Official Statutory
rate of Austria for
OS
Paris Club Austria Oesterreichische Kontrollbank EURO Official Statutory
rate of Austria for
OS
Paris Club Austria Oesterreichische Kontrollbank EURO Official Statutory
rate of Austria for
OS
Paris Club Austria Oesterreichische Kontrollbank EURO Official Statutory
rate of Austria for
OS
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO Fixed
Paris Club Belgium Government of Belgium EURO 0.00%
Paris Club Belgium Government of Belgium EURO 0.00%
Paris Club Belgium Government of Belgium EURO 0.00%
Paris Club Belgium Office du Ducroire EURO Fixed
Paris Club Belgium Office du Ducroire EURO Fixed
Paris Club Belgium Office du Ducroire EURO Fixed
Paris Club Belgium Office du Ducroire EURO Fixed
Paris Club Belgium Office du Ducroire EURO Bruxellas Interbank
Offered Rate for FRB
Paris Club Belgium Office du Ducroire EURO Bruxellas Interbank
Offered Rate for FRB
Paris Club Belgium Office du Ducroire EURO 6-month Libor for DM
Paris Club Belgium Office du Ducroire EURO 6-month Libor for DM
Paris Club Canada Export Development Corporation CAN$ 12-month prime rate
for CAN$
Paris Club Canada Export Development Corporation CAN$ 12-month prime rate
for CAN$
Paris Club Canada Export Development Corporation US$ 6-month Libor for
US$
Paris Club Canada Export Development Corporation US$ 6-month Libor for
US$
Paris Club Canada Export Development Corporation CAN$ 6-month CDOR for
CAN$
Paris Club Canada Export Development Corporation CAN$ 6-month CDOR for
CAN$
Paris Club Canada Export Development Corporation US$ 6-month Libor for
US$
Paris Club Canada Export Development Corporation US$ 6-month Libor for
US$
Paris Club Canada The Canadian Wheat Board US$ 6-month Libor for
US$
Paris Club Canada The Canadian Wheat Board US$ 6-month Libor for
US$
Paris Club Canada The Canadian Wheat Board US$ 6-month Libor for
US$
Paris Club Canada The Canadian Wheat Board US$ 6-month Libor for
US$
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de EURO Fixed
Credito a la Exportacion (CESCE)
Paris Club Spain Compania Espanola de Seguros de EURO Fixed
Credito a la Exportacion (CESCE)
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de EURO 6-month Libor for
Credito a la Exportacion (CESCE) PTAS.
Paris Club Spain Compania Espanola de Seguros de EURO 6-month Libor for
Credito a la Exportacion (CESCE) PTAS.
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Compania Espanola de Seguros de US$ 6-month Libor for
Credito a la Exportacion (CESCE) US$
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial US$ Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial US$ Fixed
Paris Club Spain Instituto de Credito Oficial US$ Fixed
Paris Club Spain Instituto de Credito Oficial US$ Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial EURO Fixed
Paris Club Spain Instituto de Credito Oficial US$ Fixed
Paris Club Spain Instituto de Credito Oficial US$ Fixed
Paris Club Spain Instituto de Credito Oficial US$ Fixed
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Agency for International US$ Fixed
States Development
Paris Club United Comodit Credit Corporation US$ Fixed
States
Paris Club United Comodit Credit Corporation US$ Fixed
States
Paris Club United Comodit Credit Corporation US$ Fixed
States
Paris Club United Comodit Credit Corporation US$ Fixed
States
Paris Club United U.S. Department of Defense US$ Fixed
States
Paris Club United U.S. Department of Defense US$ Fixed
States
Paris Club United U.S. Department of Defense US$ Fixed
States
Paris Club United U.S. Department of Defense US$ Fixed
States
Paris Club United Export-Import Bank of the U.S. US$ Short-term U.S.
States Treasury
Paris Club United Export-Import Bank of the U.S. US$ Short-term U.S.
States Treasury
Paris Club United Export-Import Bank of the U.S. US$ Short-term U.S.
States Treasury
Paris Club United Export-Import Bank of the U.S. US$ Short-term U.S.
States Treasury
Paris Club United Federal Home of N.Y. US$ Fixed
States
Paris Club United Housing Guarantee US$ Fixed
States
Paris Club United Housing Guarantee US$ Fixed
States
Paris Club United Housing Guarantee US$ Fixed
States
Paris Club United Housing Guarantee US$ Fixed
States
Paris Club United Hutton and Co. US$ Fixed
States
Paris Club United Merrill Lynch US$ 13-week U.S.
States Treasury
Paris Club United Merrill Lynch US$ Fixed
States
Paris Club United Paine Webber US$ 26-week U.S.
States Treasury
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club United Agency for International US$ Fixed
States Development - PL 480
Paris Club Finland Valtiontakuukeskus (Finnish SFR 6-month Libor for
Guarantee Board) SFrs
Paris Club Finland Valtiontakuukeskus (Finnish FR.SZ. 6-month Libor for
Guarantee Board) SFrs.
Paris Club Finland Valtiontakuukeskus (Finnish US$ 6-month Libor for
Guarantee Board) US$
Paris Club Finland Valtiontakuukeskus (Finnish US$ 6-month Libor for
Guarantee Board) US$
Paris Club Finland Valtiontakuukeskus (Finnish FR.SZ. 6-month Libor for
Guarantee Board) SFrs.
Paris Club Finland Valtiontakuukeskus (Finnish FR.SZ. 6-month Libor for
Guarantee Board) SFrs.
Paris Club Finland Valtiontakuukeskus (Finnish US$ 6-month Libor for
Guarantee Board) US$
Paris Club Finland Valtiontakuukeskus (Finnish US$ 6-month Libor for
Guarantee Board) US$
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France US$ 3-month Libor for
US$
Paris Club France Banque de France US$ 3-month Libor for
US$
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France US$ 3-month Libor for
US$
Paris Club France Banque de France US$ 3-month Libor for
US$
Paris Club France Banque de France EURO Fixed
Paris Club France Banque de France EURO Fixed
Paris Club France Compagnie Francaise d'Assurance EURO Fixed
pour le Commerce Exterieur
(COFACE)
Paris Club France Compagnie Francaise d'Assurance EURO Fixed
pour le Commerce Exterieur
(COFACE)
Paris Club France Compagnie Francaise d'Assurance US$ 3-month Libor for
pour le Commerce Exterieur US$
(COFACE)
Paris Club France Compagnie Francaise d'Assurance US$ 3-month Libor for
pour le Commerce Exterieur US$
(COFACE)
Paris Club France Compagnie Francaise d'Assurance EURO Fixed
pour le Commerce Exterieur
(COFACE)
Paris Club France Compagnie Francaise d'Assurance EURO Fixed
pour le Commerce Exterieur
(COFACE)
Paris Club France Compagnie Francaise d'Assurance US$ 3-month Libor for
pour le Commerce Exterieur US$
(COFACE)
Paris Club France Compagnie Francaise d'Assurance US$ 3-month Libor for
pour le Commerce Exterieur US$
(COFACE)
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club France French Treasury EURO Fixed
Paris Club Italy Mediocredito Centrale US$ Fixed
Paris Club Italy Mediocredito Centrale US$ Fixed
Paris Club Italy Mediocredito Centrale EURO Fixed
Paris Club Italy Mediocredito Centrale US$ Fixed
Paris Club Italy Mediocredito Centrale US$ Fixed
Paris Club Italy Mediocredito Centrale EURO Fixed
Paris Club Italy Mediocredito Centrale EURO Fixed
Paris Club Italy Mediocredito Centrale US$ Fixed
Paris Club Italy Mediocredito Centrale EURO Fixed
Paris Club Italy Mediocredito Centrale EURO Fixed
Paris Club Italy Mediocredito Centrale EURO Fixed
Paris Club Italy Mediocredito Centrale EURO Fixed
Paris Club Italy Sezione Speciale per EURO Fixed
l'Assicurazone del Credito
all'Esportazione (SACE)
Paris Club Italy Sezione Speciale per EURO Fixed
l'Assicurazone del Credito
all'Esportazione (SACE)
Paris Club Italy Sezione Speciale per US$ Fixed
l'Assicurazone del Credito
all'Esportazione (SACE)
Paris Club Italy Sezione Speciale per US$ Fixed
l'Assicurazone del Credito
all'Esportazione (SACE)
Paris Club Italy Sezione Speciale per EURO Fixed
l'Assicurazone del Credito
all'Esportazione (SACE)
Paris Club Italy Sezione Speciale per EURO Fixed
l'Assicurazone del Credito
all'Esportazione (SACE)
Paris Club Italy Sezione Speciale per US$ Fixed
l'Assicuraziones del Credito
all'Esportazione (SACE)
Paris Club Italy Sezione Speciale per US$ Fixed
l'Assicurazone del Credito
all'Esportazione (SACE)
Paris Club Japan Government of Japan (Y) Fixed
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan Bank for International (Y) Fixed
Cooperation
Paris Club Japan Japan NOC (Y) Fixed
Paris Club Japan Japan NOC (Y) Fixed
Paris Club Japan Japan NOC (Y) Fixed
Paris Club Japan Japan NOC (Y) Fixed
Paris Club Japan Nippon Export and Investment (Y) Fixed
Insurance
Paris Club Japan Nippon Export and Investment (Y) Fixed
Insurance
Paris Club Japan Nippon Export and Investment (Y) Fixed
Insurance
Paris Club Japan Nippon Export and Investment (Y) Fixed
Insurance
Paris Club Japan Nippon Export and Investment (Y) 6-month Japan
Insurance long-term prime
rate for(Y)
Paris Club Japan Nippon Export and Investment (Y) 6-month Japan
Insurance long-term prime
rate for(Y)
Paris Club Japan Nippon Export and Investment (Y) 6-month Japan
Insurance long-term prime
rate for(Y)
Paris Club Japan Nippon Export and Investment (Y) 6-month Japan
Insurance long-term prime
rate for(Y)
Paris Club Norway Garanti-Instituttet for NKR Fixed
Eksportkreditt (GIEK)
Paris Club Norway Garanti-Instituttet for NKR Fixed
Eksportkreditt (GIEK)
Paris Club Norway Garanti-Instituttet for US$ 6-month Libor for
Eksportkreditt (GIEK) US$
Paris Club Norway Garanti-Instituttet for US$ 6-month Libor for
Eksportkreditt (GIEK) US$
Paris Club Norway Garanti-Instituttet for NKR Fixed
Eksportkreditt (GIEK)
Paris Club Norway Garanti-Instituttet for NKR Fixed
Eksportkreditt (GIEK)
Paris Club Norway Garanti-Instituttet for US$ 6-month Libor for
Eksportkreditt (GIEK) US$
Paris Club Norway Garanti-Instituttet for US$ 6-month Libor for
Eksportkreditt (GIEK) US$
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlandsche Credietverzekening EURO Fixed
Maatschappj (NCM)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Nederlanse Investiringsbank Voor EURO Fixed
Ontwikellingslanden (NIO)
Paris Club Netherlands Ocean Going Vessels EURO Fixed
Paris Club Netherlands Ocean Going Vessels EURO Fixed
Paris Club Netherlands Ocean Going Vessels EURO Fixed
Paris Club Netherlands Ocean Going Vessels EURO Fixed
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee US$ 6 month Libor for
Kingdom Department (ECGD) US$
Paris Club United Export Credits Guarantee US$ 6 month Libor for
Kingdom Department (ECGD) US$
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee (pound) 6 month Libor for(pound)
Kingdom Department (ECGD)
Paris Club United Export Credits Guarantee US$ 6 month Libor for
Kingdom Department (ECGD) US$
Paris Club United Export Credits Guarantee US$ 6 month Libor for
Kingdom Department (ECGD) US$
Paris Club South Africa Industrial Development US$ Fixed
Corporation of South Africa Ltd.
Paris Club South Africa Industrial Development US$ Fixed
Corporation of South Africa Ltd.
Paris Club South Africa Industrial Development US$ Fixed
Corporation of South Africa Ltd.
Paris Club South Africa Industrial Development US$ Fixed
Corporation of South Africa Ltd.
Paris Club Sweden The Swedish Export Credits SK Stockholm Offered
Guarantee Board Rate for SK
Paris Club Sweden The Swedish Export Credits CR.SC. Stockholm Offered
Guarantee Board Rate for CR.SC.
Paris Club Sweden The Swedish Export Credits US$ 6 month Libor for
Guarantee Board US$
Paris Club Sweden The Swedish Export Credits US$ 6 month Libor for
Guarantee Board US$
Paris Club Sweden The Swedish Export Credits CR.SC. Stockholm Offered
Guarantee Board Rate for CR.SC.
Paris Club Sweden The Swedish Export Credits CR.SC. Stockholm Offered
Guarantee Board Rate for CR.SC.
Paris Club Sweden The Swedish Export Credits US$ 6 month Libor for
Guarantee Board US$
Paris Club Sweden The Swedish Export Credits US$ 6 month Libor for
Guarantee Board US$
International Banco Europeo de Inversiones US$ Fixed
Organization
International Banco Europeo de Inversiones US$ Fixed
Organization
International 5-CD-PE Inter-American Development Bank CAN$ no interest
Organization (IDB)
International 368-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 368-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 367-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 392-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 392-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 392-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 392-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 421-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 421-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 456-SF-RG Inter-American Development Bank US$ Fixed
Organization (IDB)
International 456-SF-RG Inter-American Development Bank US$ Fixed
Organization (IDB)
International 456-SF-RG Inter-American Development Bank EURO Fixed
Organization (IDB)
International 497-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 497-SF-PE Inter-American Development Bank CAN$ Fixed
Organization (IDB)
International 497-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 497-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 497-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 497-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 344-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 344-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 553-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 553-SF-PE Inter-American Development Bank CAN$ Fixed
Organization (IDB)
International 567-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 567-SF-PE Inter-American Development Bank CAN$ Fixed
Organization (IDB)
International 567-SF-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 567-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 567-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 355-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 589-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 589-SF-PE Inter-American Development Bank(pound) Fixed
Organization (IDB)
International 589-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 602-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 602-SF-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 602-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 602-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 602-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 602-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 363-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 363-OC-PE Inter-American Development Bank(pound) Fixed
Organization (IDB)
International 363-OC-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 634-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 634-SF-PE Inter-American Development Bank(pound) Fixed
Organization (IDB)
International 634-SF-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 634-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 629-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 629-SF-PE Inter-American Development Bank CAN$ Fixed
Organization (IDB)
International 629-SF-PE Inter-American Development Bank(pound) Fixed
Organization (IDB)
International 629-SF-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 629-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 629-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 650-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 400-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 400-OC-PE Inter-American Development Bank CAN$ Fixed
Organization (IDB)
International 652-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 652-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 652-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 404-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 404-OC-PE Inter-American Development Bank CAN$ Fixed
Organization (IDB)
International 404-OC-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 404-OC-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 411-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 411-OC-PE Inter-American Development Bank(pound) Fixed
Organization (IDB)
International 420-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 686-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 686-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 686-SF-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 428-OC-PE Inter-American Development Bank UAV Fixed
Organization (IDB)
International 697-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 697-SF-PE Inter-American Development Bank (Y) Fixed
Organization (IDB)
International 697-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 697-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 706-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 706-SF-PE Inter-American Development Bank FR.SZ Fixed
Organization (IDB)
International 706-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 706-SF-PE Inter-American Development Bank EURO Fixed
Organization (IDB)
International 431-OC-PE Inter-American Development Bank UAV Fixed
Organization (IDB)
International 431-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 423-OC-PE Inter-American Development Bank UAV Fixed
Organization (IDB)
International 689-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 720-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 125-IC-PE Inter-American Development Bank UAV Fixed
Organization (IDB)
International 445-OC-PE Inter-American Development Bank UAV Fixed
Organization (IDB)
International 492-OC-PE Inter-American Development Bank UAV Fixed
Organization (IDB)
International 240-IC-PE Inter-American Development Bank US$ 6-month Libor for
Organization (IDB) US$
International 517-OC-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 238-IC-PE Inter-American Development Bank UAV Fixed
Organization (IDB)
International 631-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 665-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 651-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 677-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 678-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 678-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 741-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 806-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 790-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 836-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 847-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 820-OC-PE Inter-American Development Bank UAV Interest rate for
Organization (IDB) IDB loans
International 852-1-OC-PE Inter-American Development Bank US$ 6-month Libor for
Organization (IDB) US$
International 852-2-OC-PE Inter-American Development Bank US$ 6-month Libor for
Organization (IDB) US$
International 902-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 901-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 958-SF-PE Inter-American Development Bank US$ Fixed
Organization (IDB)
International 906-OC-PE Inter-American Development Bank UAV 1990 Variable IBD
Organization (IDB) exchange rate
International 931-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 944-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 956-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 985-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 966-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1025-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1058-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1036-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1061-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1050-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1115-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1128-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1150-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1137-OC-PE Inter-American Development Bank US$ 6-month Libor for
Organization (IDB) US$
International 1144-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1196-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1235-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1236-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1237-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1321-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International 1329-OC-PE Inter-American Development Bank US$ Interest rate for
Organization (IDB) IDB loans
International CFA-7 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-43 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-041 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-46 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-062 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-75 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-120 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-128 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-135 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-1009 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-0544 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-1127 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-1372 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-1408 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-1593 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-1769 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International CFA-1902 Corporacion Andina de Fomento US$ 6-month Libor for
Organization US$
International 3540-A-PE World Bank US$ Fixed
Organization
International 3540-A-PE World Bank US$ Fixed
Organization
International 3540-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3437-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3489-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3452-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3595-A-PE World Bank US$ Fixed
Organization
International 3595-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3610-A-PE World Bank US$ Fixed
Organization
International 3610-A-PE World Bank US$ Fixed
Organization
International 3610-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3684-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3717-A-PE World Bank US$ 6-month Libor for
Organization US$
International 3717-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3701-A-PE World Bank US$ 6-month Libor for
Organization US$
International 3701-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3810-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3811-A-PE World Bank US$ 6-month Libor for
Organization US$
International 3811-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3962-O-PE World Bank US$ 6-month Libor for
Organization US$
International 3826-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 3826-A-PE World Bank US$ 6-month Libor for
Organization US$
International 4068-S-PE World Bank S/POOL Tasa Canasta Moneda
Organization Unica BIRF
International 4068-A-PE World Bank US$ 6-month Libor for
Organization US$
International 4076-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4134-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4133-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4130-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4250-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4384-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4497-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4519-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4536-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4527-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4615-O-PE World Bank US$ 6-month Libor for
Organization US$
International 4614-O-PE World Bank US$ 6-month Libor for
Organization US$
International 116-PE International Fund For DEG Fixed
Organization Agricultural Development
International 185-PE International Fund For DEG Fixed
Organization Agricultural Development
International 297-PE International Fund For DEG Fixed
Organization Agricultural Development
International 386-PE International Fund For DEG IFAD interest rate
Organization Agricultural Development policy
International 467-PE International Fund For DEG IFAD interest rate
Organization Agricultural Development policy
International IMF International Monetary Fund DEG IMF interest rate
Organization policy
International 423-PE The Opec Fund For International US$ Fixed
Organization Development
International 630-PE The Opec Fund For International US$ Fixed
Organization Development
International 696-PE The Opec Fund For International US$ Fixed
Organization Development
International 755-PE The Opec Fund For International US$ Fixed
Organization Development
Latin American Argentina Government of Argentina US$ Fixed
Countries
Latin American Argentina Government of Argentina US$ Fixed
Countries
Latin American Argentina Government of Argentina US$ Fixed
Countries
Latin American Argentina Government of Argentina US$ Fixed
Countries
Latin American Argentina Government of Argentina US$ Fixed
Countries
Latin American Brazil Centeral Bank of Brazil US$ 6-month Libor for
Countries US$
Latin American Brazil Centeral Bank of Brazil US$ 6-month Libor for
Countries US$
Latin American Brazil Centeral Bank of Brazil US$ 6-month Libor for
Countries US$
Latin American Brazil Centeral Bank of Brazil US$ 6-month Libor for
Countries US$
Latin American Brazil Centeral Bank of Brazil US$ 6-month Libor for
Countries US$
Latin American Brazil Banco Do Brasil S.A. US$ 6-month Libor for
Countries US$
Latin American Brazil Ciber Equipamientos Rodoviarios US$ Fixed
Countries Ltda.
Latin American Brazil Government of Brazil US$ Fixed
Countries
Latin American Brazil Saturnia Baterias Ltda. US$ 6-month Libor for
Countries US$
Latin American Brazil Svedala Faco Ltda. US$ Fixed
Countries
Eastern Europe China Bank of China US$ Fixed
Eastern Europe China Bank of China US$ Fixed
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's US$ No Interest
Republic of China
Eastern Europe China Government of The People's (pound) No Interest
Republic of China
Eastern Europe China Government of The People's US$ No Interest
Republic of China
Suppliers Israel Industrias Aeronauticas Israel US$ 6-month Libor for
Ltd. US$
Suppliers Italy Armamenti e Aerospazio S.P.A. US$ Fixed
Suppliers Italy Armamenti e Aerospazio S.P.A. US$ Fixed
Suppliers Italy Bitelli S.A. US$ Fixed
Suppliers Italy Bitelli S.A. US$ Fixed
Suppliers Japan Japan Peru Oil Co. Ltd (JAPECO) (Y) Fixed
Suppliers Japan Japan Peru Oil CO.LTD (JAPECO) (Y) Fixed
Suppliers Japan Japan Peru Oil CO.LTD (JAPECO) (Y) Fixed
Suppliers Japan Japan Peru Oil CO.LTD (JAPECO) (Y) Fixed
Suppliers Panama Cormed S.A. US$ Fixed
Suppliers Panama Mobetek Representaciones US$ Fixed
S.A.-Sucursal Panama
Commercial Bank Banco Latinoamerico de US$ 6-month Libor for
Exportacion S.A. US$
Commercial Bank Banco Latinoamerico de US$ 6-month Libor for
Exportacion S.A. US$
Commercial Bank First Union National Bank US$ 6-month Libor for
US$
Commercial Bank First Union National Bank US$ Fixed
Bonds Par Bonds US$ Variable Rate
Bonds Par Bonds US$ Variable Rate
Bonds Discount Bonds US$ 6-month Libor for
US$
Bonds PDI Bonds US$ Variable Rate
Outstanding Amount
as of December 31,
Interest Rate 2001 Years to
Type of Lender Country Spread (%) (%) (in millions of US$) Maturity
- --------------- ---------- ---------- ------------- -------------------- ---------
Paris Club Germany 0.00 6.80 8,391 7
Paris Club Germany 0.00 6.80 177 .5
Paris Club Germany 0.00 6.75 9,631 14
Paris Club Germany 0.00 6.75 31,221 14
Paris Club Germany 0.00 2.00 600 2
Paris Club Germany 0.00 2.00 951 2
Paris Club Germany 0.00 2.00 494 2
Paris Club Germany 0.00 2.00 590 4
Paris Club Germany 0.00 2.00 679 5
Paris Club Germany 0.00 2.00 3,337 5
Paris Club Germany 0.00 2.00 11,829 5
Paris Club Germany 0.00 2.00 5,635 8
Paris Club Germany 0.00 2.00 8,490 7
Paris Club Germany 0.00 2.00 25,205 14
Paris Club Germany 0.00 3.00 11,880 14
Paris Club Germany 0.00 2.00 1,698 7
Paris Club Germany 0.00 2.00 1,693 8
Paris Club Germany 0.00 2.00 339 8
Paris Club Germany 0.00 3.00 2,253 10
Paris Club Germany 0.00 2.00 5,434 12
Paris Club Germany 0.00 2.00 3,170 14
Paris Club Germany 0.00 2.00 4,913 14
Paris Club Germany 0.00 3.00 1,426 14
Paris Club Germany 0.00 2.00 951 14
Paris Club Germany 0.00 2.00 5,094 15
Paris Club Germany 0.00 3.00 15,774 11
Paris Club Germany 0.00 2.00 1,925 17
Paris Club Germany 0.00 0.75 4,528 30
Paris Club Germany 0.00 2.00 10,900 20
Paris Club Germany 0.00 3.00 7,212 20
Paris Club Germany 0.00 3.00 41,468 10
Paris Club Germany 0.00 3.00 220 .5
Paris Club Germany 0.00 0.75 4,528 30
Paris Club Germany 0.00 3.00 2,520 20
Paris Club Germany 0.00 3.00 15,462 20
Paris Club Germany 0.00 0.75 2,264 30
Paris Club Germany 0.00 0.75 18,106 30
Paris Club Germany 0.00 2.00 18,936 20
Paris Club Germany 0.00 0.75 4,569 30
Paris Club Germany 0.00 2.00 913 20
Paris Club Germany 0.00 3.10 26,711 10
Paris Club Germany 0.00 3.10 68,560 16
Paris Club Germany 0.00 0.75 3,943 30
Paris Club Germany 0.00 0.75 6,792 30
Paris Club Germany 0.00 2.00 4,990 20
Paris Club Germany 0.00 2.00 6,026 20
Paris Club Germany 0.00 2.00 2,851 20
Paris Club Germany 0.00 2.00 278 20
Paris Club Germany 0.00 2.00 417 20
Paris Club Germany 0.00 0.75 36 30
Paris Club Germany 0.00 2.00 2,780 20
Paris Club Austria 0.60 Variable 340 .5
Paris Club Austria 0.60 Variable 11,486 7
Paris Club Austria 0.60 Variable 6,686 14
Paris Club Austria 0.60 Variable 46,237 14
Paris Club Belgium 2.00 0.00 329 3
Paris Club Belgium 2.00 0.00 220 4
Paris Club Belgium 2.00 0.00 329 .5
Paris Club Belgium 2.00 0.00 384 7
Paris Club Belgium 2.00 0.00 439 8
Paris Club Belgium 2.00 0.00 220 8
Paris Club Belgium 2.00 0.00 202 9
Paris Club Belgium 2.00 0.00 115 9
Paris Club Belgium 2.00 0.00 474 9
Paris Club Belgium 2.00 0.00 198 9
Paris Club Belgium 2.00 0.00 796 11
Paris Club Belgium 2.00 0.00 411 11
Paris Club Belgium 0.00 0.00 2,232 10
Paris Club Belgium 0.00 0.00 2,149 10
Paris Club Belgium 0.00 0.00 2,637 16
Paris Club Belgium 0.00 7.75 21,950 7
Paris Club Belgium 0.00 7.75 783 .5
Paris Club Belgium 0.00 6.75 74 7
Paris Club Belgium 0.00 6.75 3 .5
Paris Club Belgium 0.50 Variable 13,502 14
Paris Club Belgium 0.50 Variable 92,422 14
Paris Club Belgium 0.50 Variable 46 14
Paris Club Belgium 0.50 Variable 346 14
Paris Club Canada 0.50 Variable 13,737 7
Paris Club Canada 0.50 Variable 398 .5
Paris Club Canada 0.50 Variable 40,375 7
Paris Club Canada 0.50 Variable 944 .5
Paris Club Canada 1.25 Variable 11,321 14
Paris Club Canada 1.25 Variable 55,509 14
Paris Club Canada 0.50 Variable 42,219 14
Paris Club Canada 0.50 Variable 224,160 14
Paris Club Canada 0.50 Variable 1,465 7
Paris Club Canada 0.50 Variable 22 .5
Paris Club Canada 0.50 Variable 1,481 14
Paris Club Canada 0.50 Variable 8,071 14
Paris Club Spain 0.75 Variable 4,505 3
Paris Club Spain 0.75 Variable 11,122 .5
Paris Club Spain 0.75 Variable 1,351 5
Paris Club Spain 0.75 Variable 602 .5
Paris Club Spain 0.75 Variable 57 5
Paris Club Spain 0.00 9.50 99,558 7
Paris Club Spain 0.00 9.50 1,915 .5
Paris Club Spain 0.50 Variable 29,505 7
Paris Club Spain 0.50 Variable 654 .5
Paris Club Spain 0.50 Variable 79,064 14
Paris Club Spain 0.50 Variable 208,493 14
Paris Club Spain 0.50 Variable 24,424 14
Paris Club Spain 0.50 Variable 114,416 14
Paris Club Spain 0.00 5.50 251 .5
Paris Club Spain 0.00 5.50 177 2
Paris Club Spain 0.00 5.50 270 2
Paris Club Spain 0.00 5.50 667 2
Paris Club Spain 0.00 5.50 156 2
Paris Club Spain 0.00 5.50 1,217 6
Paris Club Spain 0.00 3.75 7,424 8
Paris Club Spain 0.00 5.50 1,956 10
Paris Club Spain 0.00 5.50 10 .5
Paris Club Spain 0.00 3.00 1,712 10
Paris Club Spain 0.00 3.00 6 .5
Paris Club Spain 0.00 3.40 9,585 8
Paris Club Spain 0.00 4.50 1,676 10
Paris Club Spain 0.00 4.50 2,678 17
Paris Club Spain 0.00 3.00 270 10
Paris Club Spain 0.00 3.00 2,300 17
Paris Club Spain 0.00 1.00 13,166 5
Paris Club United 0.00 0.75 19 .5
States
Paris Club United 0.00 0.75 987 3
States
Paris Club United 0.00 0.75 220 3
States
Paris Club United 0.00 2.00 216 3
States
Paris Club United 0.00 2.00 1,641 4
States
Paris Club United 0.00 2.00 649 3
States
Paris Club United 0.00 0.75 255 3
States
Paris Club United 0.00 2.00 787 4
States
Paris Club United 0.00 2.50 328 5
States
Paris Club United 0.00 2.50 106 5
States
Paris Club United 0.00 2.50 1,815 5
States
Paris Club United 0.00 2.50 287 5
States
Paris Club United 0.00 2.50 504 6
States
Paris Club United 0.00 2.50 117 6
States
Paris Club United 0.00 2.50 509 8
States
Paris Club United 0.00 3.00 2,430 11
States
Paris Club United 0.00 3.00 2,478 11
States
Paris Club United 0.00 3.00 2,141 3
States
Paris Club United 0.00 3.00 4,568 4
States
Paris Club United 0.00 3.00 1,514 3
States
Paris Club United 0.00 3.00 3,665 5
States
Paris Club United 0.00 3.00 3,728 6
States
Paris Club United 0.00 3.00 2,760 5
States
Paris Club United 0.00 3.00 1,761 6
States
Paris Club United 0.00 3.00 5,956 5
States
Paris Club United 0.00 3.00 4,755 6
States
Paris Club United 0.00 3.00 3,770 6
States
Paris Club United 0.00 3.00 3,864 7
States
Paris Club United 0.00 3.00 20,419 7
States
Paris Club United 0.00 3.00 5,519 8
States
Paris Club United 0.00 3.00 32,484 7
States
Paris Club United 0.00 2.84 75 .5
States
Paris Club United 0.00 6.50 58,594 7
States
Paris Club United 0.00 6.50 1,586 .5
States
Paris Club United 0.00 7.125 59,522 14
States
Paris Club United 0.00 7.125 266,418 14
States
Paris Club United 0.00 6.6905 2,297 7
States
Paris Club United 0.00 6.5076 55 .5
States
Paris Club United 0.00 6.825 2,107 14
States
Paris Club United 0.00 5.375 9,268 14
States
Paris Club United 0.50 Variable 13,606 7
States
Paris Club United 0.50 Variable 361 .5
States
Paris Club United 0.50 Variable 15,433 14
States
Paris Club United 0.50 Variable 88,552 14
States
Paris Club United 0.00 8.35 5,835 5
States
Paris Club United 0.00 6.188 57,440 7
States
Paris Club United 0.00 6.133 611 .5
States
Paris Club United 0.00 6.69 44,316 14
States
Paris Club United 0.00 6.69 87,634 14
States
Paris Club United 0.00 8.025 6,019 8
States
Paris Club United 1.14 Variable 500 .5
States
Paris Club United 0.00 9.98 8,711 7
States
Paris Club United 0.35 Variable 9,628 12
States
Paris Club United 0.00 3.00 568 1
States
Paris Club United 0.00 3.00 1,807 2
States
Paris Club United 0.00 3.00 2,714 3
States
Paris Club United 0.00 4.00 950 1
States
Paris Club United 0.00 4.00 3,403 2
States
Paris Club United 0.00 4.00 7,165 8
States
Paris Club United 0.00 4.00 10,585 9
States
Paris Club United 0.00 4.00 9,268 10
States
Paris Club United 0.00 4.00 10,223 11
States
Paris Club United 0.00 4.00 5,674 12
States
Paris Club United 0.00 4.00 5,700 12
States
Paris Club United 0.00 4.00 6,150 13
States
Paris Club United 0.00 4.00 13,160 14
States
Paris Club United 0.00 3.26 19,050 10
States
Paris Club United 0.00 3.26 19 .5
States
Paris Club United 0.00 3.26 15,721 10
States
Paris Club United 0.00 3.26 12,594 17
States
Paris Club United 0.00 4.00 9,936 26
States
Paris Club United 0.00 2.50 4,167 26
States
Paris Club United 0.00 1.00 9,697 26
States
Paris Club Finland 0.50 Variable 35 7
Paris Club Finland 0.50 Variable 1 .5
Paris Club Finland 0.50 Variable 2,756 7
Paris Club Finland 0.50 Variable 50 .5
Paris Club Finland 0.50 Variable 14 14
Paris Club Finland 0.50 Variable 201 14
Paris Club Finland 0.50 Variable 2,834 14
Paris Club Finland 0.50 Variable 15,375 14
Paris Club France 0.00 3.50 9,675 10
Paris Club France 0.00 3.50 2,803 10
Paris Club France 0.00 3.50 4 .5
Paris Club France 0.50 Variable 0 .5
Paris Club France 0.50 Variable 15 7
Paris Club France 0.00 6.50 34,338 7
Paris Club France 0.00 6.50 710 .5
Paris Club France 0.00 3.50 5,847 10
Paris Club France 0.00 3.50 3,405 10
Paris Club France 0.00 3.50 27,274 17
Paris Club France 0.50 Variable 18 14
Paris Club France 0.50 Variable 98 14
Paris Club France 0.00 6.85 28,013 14
Paris Club France 0.00 6.85 135,684 14
Paris Club France 0.00 6.50 174,698 7
Paris Club France 0.00 6.50 3,906 .5
Paris Club France 0.50 Variable 18 7
Paris Club France 0.50 Variable 0 .5
Paris Club France 0.00 6.85 117,865 14
Paris Club France 0.00 6.85 552,478 14
Paris Club France 0.50 Variable 21 14
Paris Club France 0.50 Variable 117 14
Paris Club France 0.00 3.50 1,644 4
Paris Club France 0.00 3.50 1,451 9
Paris Club France 0.00 3.50 754 8
Paris Club France 0.00 3.50 619 8
Paris Club France 0.00 3.50 522 9
Paris Club France 0.00 3.50 715 9
Paris Club France 0.00 3.50 229 9
Paris Club France 0.00 3.50 702 11
Paris Club France 0.00 3.50 602 11
Paris Club France 0.00 3.50 253 9
Paris Club France 0.00 4.00 5,426 15
Paris Club France 0.00 3.00 230 21
Paris Club France 0.00 3.00 7,863 21
Paris Club France 0.00 3.40 4,401 19
Paris Club France 0.00 3.40 3,857 17
Paris Club Italy 0.00 2.50 673 6
Paris Club Italy 0.00 1.50 3,099 6
Paris Club Italy 0.00 1.50 2,078 8
Paris Club Italy 0.00 1.50 10,004 8
Paris Club Italy 0.00 1.50 26,106 7
Paris Club Italy 0.00 1.50 21,889 7
Paris Club Italy 0.00 1.50 2,579 7
Paris Club Italy 0.00 1.50 75,000 7
Paris Club Italy 0.00 1.50 1,705 8
Paris Club Italy 0.00 1.50 4,181 9
Paris Club Italy 0.00 1.50 6,520 10
Paris Club Italy 0.00 1.50 12,581 10
Paris Club Italy 0.00 7.90 49,053 7
Paris Club Italy 0.00 7.90 1,228 .5
Paris Club Italy 0.00 6.25 136,773 7
Paris Club Italy 0.00 6.25 2,440 .5
Paris Club Italy 0.00 7.92 46,151 14
Paris Club Italy 0.00 7.92 133,909 14
Paris Club Italy 0.00 7.07 99,187 14
Paris Club Italy 0.00 7.07 395,578 14
Paris Club Japan 0.00 3.00 7,875 1
Paris Club Japan 0.00 3.50 886 1
Paris Club Japan 0.00 4.25 1,889 3
Paris Club Japan 0.00 4.25 2,773 3
Paris Club Japan 0.00 4.25 2,369 3
Paris Club Japan 0.00 3.00 406,373 20
Paris Club Japan 0.00 3.00 96,774 20
Paris Club Japan 0.00 2.10 11,929 3
Paris Club Japan 0.00 4.10 40,638 10
Paris Club Japan 0.00 4.10 253 .5
Paris Club Japan 0.00 5.60 21,238 10
Paris Club Japan 0.00 5.60 510 .5
Paris Club Japan 0.00 4.90 2,806 7
Paris Club Japan 0.00 4.90 42 .5
Paris Club Japan 0.00 3.00 16,936 20
Paris Club Japan 0.00 3.50 13,030 12
Paris Club Japan 0.00 3.50 98,502 12
Paris Club Japan 0.00 3.60 32,255 3
Paris Club Japan 0.00 3.10 6,543 3
Paris Club Japan 0.00 3.00 3,406 3
Paris Club Japan 0.00 2.40 5,728 3
Paris Club Japan 0.00 2.60 2,876 3
Paris Club Japan 0.00 2.60 147 3
Paris Club Japan 0.00 3.00 5,352 20
Paris Club Japan 0.00 3.00 26,520 20
Paris Club Japan 0.00 2.50 72,117 18
Paris Club Japan 0.00 2.10 7,381 18
Paris Club Japan 0.00 2.70 44,688 18
Paris Club Japan 0.00 2.30 12,889 18
Paris Club Japan 0.00 2.90 40,365 12
Paris Club Japan 0.00 2.90 17,305 5
Paris Club Japan 0.00 2.70 112,208 18
Paris Club Japan 0.00 2.30 9,932 18
Paris Club Japan 0.00 2.70 32,880 18
Paris Club Japan 0.00 2.30 2,307 18
Paris Club Japan 0.00 2.10 1,329 18
Paris Club Japan 0.00 2.50 18,069 18
Paris Club Japan 0.00 2.70 13,268 18
Paris Club Japan 0.00 2.50 17,619 18
Paris Club Japan 0.00 2.70 2,540 18
Paris Club Japan 0.00 2.30 3,884 18
Paris Club Japan 0.00 4.10 29,259 10
Paris Club Japan 0.00 4.10 94,728 17
Paris Club Japan 0.00 4.30 1,879 14
Paris Club Japan 0.00 5.50 10,346 14
Paris Club Japan 0.00 5.60 20,966 10
Paris Club Japan 0.00 5.60 124,749 17
Paris Club Japan 0.00 2.70 12,015 7
Paris Club Japan 0.00 2.70 13,037 7
Paris Club Japan 0.00 1.70 635 7
Paris Club Japan 0.00 1.70 5,414 7
Paris Club Japan 0.00 1.70 14,598 18
Paris Club Japan 0.00 0.75 519 18
Paris Club Japan 0.00 0.75 2,662 30
Paris Club Japan 0.00 1.70 10,630 18
Paris Club Japan 0.00 2.20 3,736 18
Paris Club Japan 0.00 0.75 6,612 30
Paris Club Japan 0.00 3.70 20,206 3
Paris Club Japan 0.00 1.60 63,826 15
Paris Club Japan 0.00 3.50 53,787 5
Paris Club Japan 0.00 2.00 243,965 12
Paris Club Japan 0.00 1.70 2,290 18
Paris Club Japan 0.00 2.20 1,844 18
Paris Club Japan 0.00 4.90 25,517 7
Paris Club Japan 0.00 4.90 624 .5
Paris Club Japan 0.00 4.30 22,744 14
Paris Club Japan 0.00 5.50 145,427 14
Paris Club Japan 0.00 6.30 8,440 7
Paris Club Japan 0.00 6.30 182 6
Paris Club Japan 0.00 6.30 95 7
Paris Club Japan 0.00 6.30 2 .5
Paris Club Japan 0.50 Variable 6,862 14
Paris Club Japan 0.50 Variable 36,396 14
Paris Club Japan 0.50 Variable 85 14
Paris Club Japan 0.50 Variable 458 14
Paris Club Norway 0.00 6.75 8,992 7
Paris Club Norway 0.00 6.75 253 .5
Paris Club Norway 0.50 Variable 12,799 7
Paris Club Norway 0.50 Variable 49 .5
Paris Club Norway 0.00 6.75 8,522 14
Paris Club Norway 0.00 6.75 26,073 14
Paris Club Norway 0.50 Variable 10,652 14
Paris Club Norway 0.50 Variable 15,283 14
Paris Club Netherlands 0.00 7.40 13,485 7
Paris Club Netherlands 0.00 7.40 285 .5
Paris Club Netherlands 0.00 7.40 192 7
Paris Club Netherlands 0.00 7.40 5 .5
Paris Club Netherlands 0.00 6.95 11,454 14
Paris Club Netherlands 0.00 5.00 40,179 14
Paris Club Netherlands 0.00 6.95 180 14
Paris Club Netherlands 0.00 5.00 644 14
Paris Club Netherlands 0.00 2.50 384 2
Paris Club Netherlands 0.00 2.50 384 2
Paris Club Netherlands 0.00 2.50 769 4
Paris Club Netherlands 0.00 2.50 2,009 5
Paris Club Netherlands 0.00 2.50 2,184 5
Paris Club Netherlands 0.00 0.75 1,245 27
Paris Club Netherlands 0.00 2.50 3,058 7
Paris Club Netherlands 0.00 0.75 4,493 25
Paris Club Netherlands 0.00 2.50 3,125 8
Paris Club Netherlands 0.00 2.50 4,893 8
Paris Club Netherlands 0.00 2.50 4,194 16
Paris Club Netherlands 0.00 7.40 12,224 7
Paris Club Netherlands 0.00 7.40 299 .5
Paris Club Netherlands 0.00 6.95 11,462 14
Paris Club Netherlands 0.00 6.95 40,899 14
Paris Club United 0.50 Variable 34,547 7
Kingdom
Paris Club United 0.50 Variable 917 .5
Kingdom
Paris Club United nd) 0.50 Variable 17 7
Kingdom
Paris Club United nd) 0.50 Variable 1 .5
Kingdom
Paris Club United 0.50 Variable 2,315 7
Kingdom
Paris Club United 0.50 Variable 62 .5
Kingdom
Paris Club United nd) 0.50 Variable 26,326 14
Kingdom
Paris Club United nd) 0.50 Variable 121,133 14
Kingdom
Paris Club United nd) 0.50 Variable 17 14
Kingdom
Paris Club United nd) 0.50 Variable 79 14
Kingdom
Paris Club United 0.50 Variable 2,383 14
Kingdom
Paris Club United 0.50 Variable 13,235 14
Kingdom
Paris Club South Africa 0.00 5.00 4,615 7
Paris Club South Africa 0.00 5.00 85 .5
Paris Club South Africa 0.00 5.00 3,291 14
Paris Club South Africa 0.00 5.00 22,320 14
Paris Club Sweden 0.50 Variable 4,797 7
Paris Club Sweden 0.50 Variable 406 .5
Paris Club Sweden 0.50 Variable 9,491 7
Paris Club Sweden 0.50 Variable 283 .5
Paris Club Sweden 0.50 Variable 8,261 14
Paris Club Sweden 0.50 Variable 45,405 14
Paris Club Sweden 0.50 Variable 12,616 14
Paris Club Sweden 0.50 Variable 68,535 14
International 0.00 6.73 30,367 14
Organization
International 0.00 7.06 1,887 14
Organization
International 5-CD-PE 0.00 0.00 39 16
Organization
International 368-SF-PE 0.00 2.00 195 2
Organization
International 368-SF-PE 0.00 2.00 177 2
Organization
International 367-SF-PE 0.00 2.00 52 2
Organization
International 392-SF-PE 0.00 2.00 250 3
Organization
International 392-SF-PE 0.00 2.00 7 3
Organization
International 392-SF-PE 0.00 2.00 6 3
Organization
International 392-SF-PE 0.00 2.00 323 3
Organization
International 421-SF-PE 0.00 2.00 2,696 4
Organization
International 421-SF-PE 0.00 2.00 2,609 4
Organization
International 456-SF-RG 0.00 2.00 99 4
Organization
International 456-SF-RG 0.00 2.00 104 4
Organization
International 456-SF-RG 0.00 2.00 19 4
Organization
International 497-SF-PE 0.00 2.00 1,893 5
Organization
International 497-SF-PE 0.00 2.00 575 5
Organization
International 497-SF-PE 0.00 2.00 2,890 5
Organization
International 497-SF-PE 0.00 2.00 48 5
Organization
International 497-SF-PE 0.00 2.00 200 5
Organization
International 497-SF-PE 0.00 2.00 306 5
Organization
International 344-OC-PE 0.00 7.50 500 2
Organization
International 344-OC-PE 0.00 7.50 232 2
Organization
International 553-SF-PE 0.00 2.00 200 7
Organization
International 553-SF-PE 0.00 2.00 62 7
Organization
International 567-SF-PE 0.00 2.00 3,429 7
Organization
International 567-SF-PE 0.00 2.00 400 7
Organization
International 567-SF-PE 0.00 2.00 476 7
Organization
International 567-SF-PE 0.00 2.00 326 7
Organization
International 567-SF-PE 0.00 2.00 518 7
Organization
International 355-OC-PE 0.00 7.90 467 3
Organization
International 589-SF-PE 0.00 2.00 685 8
Organization
International 589-SF-PE 0.00 2.00 90 8
Organization
International 589-SF-PE 0.00 2.00 2,402 8
Organization
International 602-SF-PE 0.00 2.00 6,849 8
Organization
International 602-SF-PE 0.00 2.00 1,744 8
Organization
International 602-SF-PE 0.00 2.00 4,714 8
Organization
International 602-SF-PE 0.00 2.00 430 8
Organization
International 602-SF-PE 0.00 2.00 633 8
Organization
International 602-SF-PE 0.00 2.00 123 8
Organization
International 363-OC-PE 0.00 7.90 630 3
Organization
International 363-OC-PE 0.00 7.90 48 3
Organization
International 363-OC-PE 0.00 7.90 11 3
Organization
International 634-SF-PE 0.00 2.00 2,590 9
Organization
International 634-SF-PE 0.00 2.00 487 9
Organization
International 634-SF-PE 0.00 2.00 1,856 9
Organization
International 634-SF-PE 0.00 2.00 2,897 9
Organization
International 629-SF-PE 0.00 2.00 8,338 9
Organization
International 629-SF-PE 0.00 2.00 346 9
Organization
International 629-SF-PE 0.00 2.00 1,463 9
Organization
International 629-SF-PE 0.00 2.00 380 9
Organization
International 629-SF-PE 0.00 2.00 3,435 9
Organization
International 629-SF-PE 0.00 2.00 483 9
Organization
International 650-SF-PE 0.00 2.00 1,642 9
Organization
International 400-OC-PE 0.00 9.25 538 4
Organization
International 400-OC-PE 0.00 9.25 53 4
Organization
International 652-SF-PE 0.00 2.00 2,961 9
Organization
International 652-SF-PE 0.00 2.00 4,427 9
Organization
International 652-SF-PE 0.00 2.00 502 9
Organization
International 404-OC-PE 0.00 9.25 1,399 4
Organization
International 404-OC-PE 0.00 9.25 130 4
Organization
International 404-OC-PE 0.00 9.25 87 4
Organization
International 404-OC-PE 0.00 9.25 339 4
Organization
International 411-OC-PE 0.00 9.25 7,566 5
Organization
International 411-OC-PE 0.00 9.25 249 5
Organization
International 420-OC-PE 0.00 4.00 65 1
Organization
International 686-SF-PE 0.00 2.00 702 11
Organization
International 686-SF-PE 0.00 2.00 942 11
Organization
International 686-SF-PE 0.00 2.00 89 11
Organization
International 428-OC-PE 0.00 10.50 1,039 1
Organization
International 697-SF-PE 0.00 2.00 2,707 11
Organization
International 697-SF-PE 0.00 2.00 1,431 11
Organization
International 697-SF-PE 0.00 2.00 358 11
Organization
International 697-SF-PE 0.00 2.00 1,106 11
Organization
International 706-SF-PE 0.00 2.00 3,250 11
Organization
International 706-SF-PE 0.00 2.00 318 11
Organization
International 706-SF-PE 0.00 2.00 1,039 11
Organization
International 706-SF-PE 0.00 2.00 491 11
Organization
International 431-OC-PE 0.00 10.50 746 1
Organization
International 431-OC-PE 0.00 4.00 26 1
Organization
International 423-OC-PE 0.00 10.50 1,073 2
Organization
International 689-SF-PE 0.00 2.00 986 12
Organization
International 720-SF-PE 0.00 2.00 2,661 12
Organization
International 125-IC-PE 0.00 8.0233 17,678 2
Organization
International 445-OC-PE 0.00 8.6741 2,933 2
Organization
International 492-OC-PE 0.00 7.8710 2,049 4
Organization
International 240-IC-PE 1.00 Variable 2,444 5
Organization
International 517-OC-PE 0.00 4.00 1,513 6
Organization
International 238-IC-PE 0.00 6.5028 10,937 5
Organization
International 631-OC-PE 0.00 Variable 276,450 10
Organization
International 665-OC-PE 0.00 Variable 3,280 10
Organization
International 651-OC-PE 0.00 Variable 126,502 10
Organization
International 677-OC-PE 0.00 Variable 136,123 11
Organization
International 678-OC-PE 0.00 Variable 13,719 11
Organization
International 678-OC-PE 0.00 Variable 1,477 11
Organization
International 741-OC-PE 0.00 Variable 56,876 16
Organization
International 806-OC-PE 0.00 Variable 68,535 17
Organization
International 790-OC-PE 0.00 Variable 30,639 12
Organization
International 836-OC-PE 0.00 Variable 228,840 12
Organization
International 847-OC-PE 0.00 Variable 124,954 17
Organization
International 820-OC-PE 0.00 Variable 982 13
Organization
International 852-1-OC-PE 0.00 Variable 56,583 3
Organization
International 852-2-OC-PE 0.00 Variable 9,654 13
Organization
International 902-OC-PE 0.50 Variable 3,995 14
Organization
International 901-OC-PE 0.00 Variable 82,379 19
Organization
International 958-SF-PE 0.00 2.00 25,000 23
Organization
International 906-OC-PE 0.00 Variable 19,617 14
Organization
International 931-OC-PE 0.50 Variable 150,000 18
Organization
International 944-OC-PE 0.00 Variable 750 2
Organization
International 956-OC-PE 0.00 Variable 66,996 19
Organization
International 985-OC-PE 0.00 Variable 76,138 15
Organization
International 966-OC-PE 0.00 Variable 235,500 15
Organization
International 1025-OC-PE 0.00 Variable 20,509 15
Organization
International 1058-OC-PE 0.00 Variable 140,230 20
Organization
International 1036-OC-PE 0.00 Variable 704 16
Organization
International 1061-OC-PE 0.00 Variable 11,493 20
Organization
International 1050-OC-PE 0.00 Variable 2,546 15
Organization
International 1115-OC-PE 0.50 Variable 1,417 17
Organization
International 1128-OC-PE 0.00 Variable 30,000 22
Organization
International 1150-OC-PE 0.00 Variable 44,555 13
Organization
International 1137-OC-PE 0.00 Variable 115,251 15
Organization
International 1144-OC-PE 0.00 Variable 12,901 20
Organization
International 1196-OC-PE 0.00 Variable 2,013 16
Organization
International 1235-OC-PE 0.00 Variable 200,000 15
Organization
International 1236-OC-PE 0.00 Variable 3,090 16
Organization
International 1237-OC-PE 0.00 Variable 1,306 22
Organization
International 1321-OC-PE 0.00 Variable 250,000 15
Organization
International 1329-OC-PE 0.00 Variable 5,077 19
Organization
International CFA-7 2.50 Variable 2,550 1
Organization
International CFA-43 2.50 Variable 15,000 1
Organization
International CFA-041 2.50 Variable 18,300 3
Organization
International CFA-46 2.50 Variable 33,250 3
Organization
International CFA-062 2.50 Variable 37,615 5
Organization
International CFA-75 2.45 Variable 9,771 4
Organization
International CFA-120 1.90 Variable 3,872 5
Organization
International CFA-128 2.50 Variable 16,150 9
Organization
International CFA-135 3.10 Variable 14,118 8
Organization
International CFA-1009 3.10 Variable 33,488 8
Organization
International CFA-0544 1.75 Variable 10,222 2
Organization
International CFA-1127 2.80 Variable 610 6
Organization
International CFA-1372 2.80 Variable 8,133 6
Organization
International CFA-1408 3.10 Variable 250,000 8
Organization
International CFA-1593 3.50 Variable 300,000 10
Organization
International CFA-1769 3.10 Variable 6,380 6
Organization
International CFA-1902 3.75 Variable 125,000 10
Organization
International 3540-A-PE 0.00 6.28 2,840 5
Organization
International 3540-A-PE 0.00 6.34 5,314 6
Organization
International 3540-S-PE 0.50 Variable 16,313 11
Organization
International 3437-S-PE 0.50 Variable 245,510 11
Organization
International 3489-S-PE 0.50 Variable 318,567 12
Organization
International 3452-S-PE 0.50 Variable 238,640 11
Organization
International 3595-A-PE 0.00 6.41 91,667 5
Organization
International 3595-S-PE 0.50 Variable 115,494 11
Organization
International 3610-A-PE 0.00 7.11 574 5
Organization
International 3610-A-PE 0.00 5.92 95 6
Organization
International 3610-S-PE 0.50 Variable 7,689 12
Organization
International 3684-S-PE 0.50 Variable 76,011 12
Organization
International 3717-A-PE 0.50 Variable 68,456 12
Organization
International 3717-S-PE 0.50 Variable 59,682 12
Organization
International 3701-A-PE 0.50 Variable 20,818 12
Organization
International 3701-S-PE 0.50 Variable 8,392 12
Organization
International 3810-S-PE 0.50 Variable 79,072 13
Organization
International 3811-A-PE 0.50 Variable 104,653 13
Organization
International 3811-S-PE 0.50 Variable 17,401 13
Organization
International 3962-O-PE 0.50 Variable 79,406 11
Organization
International 3826-S-PE 0.50 Variable 6,874 10
Organization
International 3826-A-PE 0.50 Variable 98,264 10
Organization
International 4068-S-PE 0.50 Variable 17,216 12
Organization
International 4068-A-PE 0.50 Variable 106,497 12
Organization
International 4076-O-PE 0.50 Variable 48,615 8
Organization
International 4134-O-PE 0.50 Variable 76,164 9
Organization
International 4133-O-PE 0.50 Variable 183,000 12
Organization
International 4130-O-PE 0.50 Variable 41,189 11
Organization
International 4250-O-PE 0.50 Variable 66,407 12
Organization
International 4384-O-PE 0.01 Variable 21,022 7
Organization
International 4497-O-PE 0.75 Variable 300,000 12
Organization
International 4519-O-PE 0.75 Variable 2,559 4
Organization
International 4536-O-PE 0.75 Variable 300 1
Organization
International 4527-O-PE 0.75 Variable 270 1
Organization
International 4615-O-PE 0.75 Variable 100,000 11
Organization
International 4614-O-PE 0.75 Variable 500 1
Organization
International 116-PE 0.00 4.00 2,243 1
Organization
International 185-PE 0.00 4.00 2,290 4
Organization
International 297-PE 0.00 4.00 10,240 10
Organization
International 386-PE 0.00 Variable 6,629 10
Organization
International 467-PE 0.00 Variable 1,775 1
Organization
International IMF 0.00 Variable 184,733 5
Organization
International 423-PE 0.00 4.00 611 2
Organization
International 630-PE 0.00 3.75 4,167 10
Organization
International 696-PE 0.00 4.00 2,803 11
Organization
International 755-PE 0.00 4.00 4,000 11
Organization
Latin American Argentina 0.00 6.50 29 1
Countries
Latin American Argentina 0.00 6.50 1,702 4
Countries
Latin American Argentina 0.00 6.50 59 1
Countries
Latin American Argentina 0.00 6.50 575 1
Countries
Latin American Argentina 0.00 6.50 45 1
Countries
Latin American Brazil 0.00 Variable 2,273 1
Countries
Latin American Brazil 0.00 Variable 6,642 2
Countries
Latin American Brazil 0.00 Variable 6,167 3
Countries
Latin American Brazil 0.00 Variable 5,411 4
Countries
Latin American Brazil 0.00 Variable 3,163 5
Countries
Latin American Brazil 0.81 Variable 1,895 .5
Countries
Latin American Brazil 0.00 6.875 3,760 5
Countries
Latin American Brazil 0.00 7.875 26,629 8
Countries
Latin American Brazil 1.75 Variable 765 2
Countries
Latin American Brazil 0.00 6.780 1,666 5
Countries
Eastern Europe China 0.00 7.54 7,032 3
Eastern Europe China 0.00 7.68 13,364 6
Eastern Europe China 0.00 0.00 419 5
Eastern Europe China 0.00 0.00 246 5
Eastern Europe China 0.00 0.00 1,376 5
Eastern Europe China 0.00 0.00 414 5
Eastern Europe China 0.00 0.00 3,631 5
Eastern Europe China 0.00 0.00 1,322 5
Eastern Europe China 0.00 0.00 2,400 6
Eastern Europe China 0.00 0.00 468 5
Eastern Europe China 0.00 0.00 5,670 9
Eastern Europe China 0.00 0.00 2,066 5
Eastern Europe China 0.00 0.00 9,000 9
Suppliers Israel 1.50 Variable 735 .5
Suppliers Italy 0.00 5.0268275 33,970 16
Suppliers Italy 0.00 5.0268275 20,744 16
Suppliers Italy 0.00 7.00 1,320 4
Suppliers Italy 0.00 7.00 924 6
Suppliers Japan 0.00 5.50 626,163 11
Suppliers Japan 0.00 4.90 64,443 11
Suppliers Japan 0.00 4.90 3,051 .5
Suppliers Japan 0.00 4.30 85,110 14
Suppliers Panama 0.00 7.00 1,679 5
Suppliers Panama 0.00 7.00 3,958 3
Commercial Bank 2.125 Variable 10,000 1
Commercial Bank 2.00 Variable 6,000 1
Commercial Bank 2.00 Variable 1,304 3
Commercial Bank 0.00 9.00 3,429 4
Bonds 0.8125 Variable 1,624,495 12
Bonds 0.00 Variable 181,152 1
Bonds 0.8125 Variable 242,952 1
Bonds 0.8125 Variable 1,678,468 15
- ------------------------
Acronyms:
ATS = Austrian schilling
BF = Belgian franc
CAN$ = Canadian dollar
DM = German mark
ECU = European Currency
Unit FR = French franc
ITL = Italian lira
NKR = Norwegian krone
NLG = Dutch guilder
PTAS = Spanish pesetas
SCP = Single currency pool (World Bank unit of account, based on a basket of
national currencies)
SDR = IMF unit of account, based on a basket of national currencies
SFR = Swiss franc
SK = Swedish kroner
UAV = Inter-American Development Bank (IDB) unit of account
Source: Ministry of Economy (Direccion General de Credito Publico, or Office
of Public Credit).
PART II
(Required by Items (11), (13) and (14) of Schedule B
of the Securities Act of 1933)
1. The following are the estimated expenses of the issuance and
distribution of the securities being registered:
Registration fee............................................... US$92,000
Listing fees and expenses...................................... 15,000
Printing and engraving expenses................................ 15,000
Rating Agency fees............................................. 100,000
Fiscal Agent fees and expenses................................. 15,000
Legal fees and expenses........................................ 150,000
Other.......................................................... 40,000
Total(1).............................................. US$427,000
(1) A portion of expenses may be paid by the underwriters.
2. The Registrant hereby agrees to furnish an opinion or opinions of
counsel, with respect to the legality of the issue, in connection with any
offering of securities under this Registration Statement, and to furnish copies
of the necessary approvals authorizing each issue of securities offered under
this Registration Statement, and any other Peruvian governmental approvals
required in connection with such issue, in post-effective amendments to this
Registration Statement, in each case together with translations of the same into
the English language.
UNDERTAKINGS
The Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
(b) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(d) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this Registration Statement as of the time it
was declared effective.
CONTENTS
This Registration Statement comprises:
1. The facing sheet.
2. The Cross Reference Sheet between Schedule B of the
Securities Act of 1933 and the Prospectus.
3. Part I consisting of the Prospectus.
4. Part II consisting of pages II-1 to II-6.
5. The following exhibits:
A. Form of Underwriting Agreement.
B. Form of Fiscal Agency Agreement, including form of certain Debt
Securities.
C. Form of Warrant Agreement, including form of Warrant.*
D. Form of Unit.*
E. Opinion of the Chief of the General Office of Legal Counseling of the
Ministry of Economy and Finance of the Republic of Peru, with respect
to the legality of the securities.
F. Opinion of Cleary, Gottlieb, Steen & Hamilton, special New York Counsel
to the Republic of Peru, with respect to the legality of the
securities.
G. Consent of the Chief of the General Office of Legal Counseling of the
Ministry of Economy and Finance of the Republic of Peru (included in
Exhibit E).
H. Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibit F).
- -------------------------
* To be filed by amendment.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant, the Republic of Peru, has duly caused this Registration
Statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Lima, Peru on the 22nd day of January,
2003.
By: /s/ BETTY SOTELO BAZAN
-----------------------------------
Name: Betty Sotelo Bazan
Title: Directora General de
Credito Publico
SIGNATURE OF AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of the Securities Act of 1933, as amended,
the undersigned, as duly authorized representative in the United States of the
Registrant, has signed this Registration Statement or amendment thereto in the
City of New York, New York on the 22nd day of January, 2003.
By: /s/ GABRIEL PACHECO CRESPO
---------------------------------
Gabriel Pacheco Crespo
Deputy Consul General of Peru
EXHIBIT INDEX
Exhibit Page No.
- ------- --------
A. Form of Underwriting Agreement.
B. Form of Fiscal Agency Agreement, including
form of certain Debt Securities.
C. Form of Warrant Agreement, including
form of Warrant.*
D. Form of Unit.*
E. Opinion of the Chief of the General Office
of Legal Counseling of the Ministry of Economy
and Finance of the Republic of Peru, with respect
to the legality of the securities.
F. Opinion of Cleary, Gottlieb, Steen & Hamilton,
special New York Counsel to the Republic of Peru,
with respect to the legality of the securities.
G. Consent of the Chief of the General Office
of Legal Counseling of the Ministry of Economy and
Finance of the Republic of Peru (included in
Exhibit E).
H. Consent of Cleary, Gottlieb, Steen & Hamilton
(included in Exhibit F).
---------------------
* To be filed by amendment.
The Republic of Peru
Debt Securities
Warrants
Units
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PROSPECTUS
- --------------------------------------------------------------------------------
January , 2003