Reversal of Form

Not long ago, Peru seemed near the edge of economic disaster: plunging world prices had pulled the bottom out of the country's cotton and sugar markets, and a huge budget deficit threatened runaway inflation. Today things are different; in a remarkable reversal of form, Peru is prospering at a pace that few other countries on the continent can match.

Luck played a part in the comeback. Vast shoals of anchovies offshore have turned Peru's once-struggling fishing industry into one that will earn upwards of $180 million in exports, mainly of fishmeal, this year. Also, the worldwide copper shortage, made more acute by growing U.S. demands for the Viet Nam war, should send Peru's mineral exports well beyond last year's record $309 million.

Opening the Andes. Such windfalls would not have been enough if President Fernando Belaunde Terry, 53, had not known what to do with them. What he did, working with an alltime-high G.N.P., which is now running at a $45 billion rate, was to spread the profits. Among other things, he went in for road building, so far has committed $665 million to projects ranging from highways around Lima to a 3,500-mile stretch that will presumably open up the Andes' sparsely settled eastern slopes to farming and light industry. So far this year Peru's per capita income is up 16% to an annual rate of $365, which may not sound like much but is dramatic in view of the country's past poverty. Though the budget will be $30 million in the red this year, the sol is one of the stablest currencies in Latin America.

Belaunde has also resisted political pressures to nationalize the U.S.-owned International Petroleum Co. (TIME, Nov. 8, 1963), has created a climate that makes investment thrive. Along the new highways around Lima, small but modern plants are producing everything from TV sets to tobacco products. Cashing in on consumer prosperity, Sears, Roebuck will soon open its third store in Lima, and has plans for two more next year. Until March 1965, Peru imported all its autos; it now has five assembly plants, will get eight more from French, German, Swedish and Japanese automakers next year. Says General Motors Plant Manager Pedro Pessoa, whose popular Chevelles sell for $4,440: "We can't build them fast enough."

Also, Paper Bags. Then, there is all the action in the mines. Copper output has doubled since 1959, and Anaconda, American Smelting & Refining and Cerro Corp. are considering plans that could double it again by 1970. This would rank Peru with Chile and Zambia as world leaders in copper production. Even cautious old W. R. Grace & Co., which has been packing its bags in most Latin American countries, has announced a $50 million investment in papermaking and other projects over the next five years.

This file is automatically generated by a robot program, so reader's discretion is required.