Peru continues to face challenges due to political instability, corruption, and social conflict. Political instability has led to a downgrade in Peru’s sovereign credit ratings, with five presidents since 2020, and a high level of contentiousness between various branches and independent bodies at the national level.
Corruption is a major problem in Peru. The country ranked 101st out of 180 countries in Transparency International’s 2022 Corruption Perceptions Index. Social conflict is also a major concern, with 162 active conflicts reported in Peru as of February 2023. More than half of these conflicts (95) occurred in the mining sector, which represents approximately 15 percent of Peru’s GDP.
The private sector also faced challenges due to Peru’s cumbersome and inefficient government procurement processes. The U.S. Mission in Peru continues to work with the Government of Peru to encourage government contracting procedures that follow international procurement standards. This year a new draft Procurement law was submitted in Congress, which seeks to align Peru’s procedures with international best practices.
Business owners often find it difficult to resolve disputes with the government. The U.S. Commercial Service recommends including an arbitration clause in commercial agreements. However, the judicial system is often slow to hear cases and issue decisions. Court rulings and the degree of enforcement are often inconsistent and unpredictable. Allegations of political corruption and outside interference in the judicial system are common. Firms operating in Peru have also noted difficulties in securing legal solutions to commercial disputes or enforcing arbitration awards.