The Business Year

Jorge Von Wedemeyer Knigge

PERU - Economy

Buckets of Potential

President, Chamber of Commerce of Lima

Bio

Jorge Von Wedemeyer Knigge graduated from the University of Hamburg, Germany. He has extensive experience in banking, having worked at Commerzbank in Frankfurt as a business manager for the regions of Central and North America as well as Banco de Credito del Peru. For 13 years he worked as the representative of Dresdner Bank Lateinamerika and Dresdner Bank AG in Peru. He also acted as Internal General Manager at Lima Airport Partners. He is the President of the Chamber of Commerce of Lima.

"It is becoming increasingly important to be competitive as we are becoming increasingly globalized."

What is required to stimulate entrepreneurship in the country, especially for SMEs?

There was a mentality in the government that the strength of our economy was entirely dependent on global economic factors, which certainly have an impact, but it became an excuse not to facilitate entrepreneurial activity among Peruvian companies. Now it is up to the next government to reduce barriers and obstacles, facilitate economic activities, and implement the appropriate regulations and laws to support the labor force and educational system for long-term development. The informal sector accounts for 74% of total national labor and about 60% of economic activity, so it is important to formalize.

What is the main challenge companies face when developing their operations in Peru?

The government is the greatest impediment to economic activity. It is becoming increasingly important to be competitive as we are becoming increasingly globalized. We currently have 17 free trade agreements and others in preparation, we are members of Pacific Alliance, of APEC, and TPP; all this makes necessary to be more competitive and in order to be more competitive we have to be cheaper, faster, and more effective in what we do.

How will the TPP impact the Peruvian economy and what is its potential?

There is always potential in every measure we take to be more globalized because it opens up possibilities to have wider markets and to enter markets at lower costs. On the other hand, as long as we are members and others are not, we open up possibilities for entities to sell their products through us in these globalized market spaces. It is an investment opportunity for people of other countries to generate their products with us and sell them in the markets we now have easy access to.

What segments of the national economy have significant potential for new companies to invest and operate?

There is considerable potential to invest in the economy and the main opportunities are in infrastructure development. While the government has yet to privatize many services, there is strong potential to do so, opening up opportunities to construct roads, railways, metros, and even to distribute energy to other countries. There is potential to add value to our raw materials; instead of exporting copper we can export copper wires and copper electrical products, which could be manufactured in Peru. There are also opportunities to export agricultural products, particularly fruits and vegetables and commodities unique to Peru such as quinoa. We have about 2,000 different varieties of potatoes so there is definitely potential to develop something there as well.

How is the Chamber positioned to develop a synergy between the business community and the government?

Our main function is to facilitate dialog about challenges facing the private sectors, and to give the private sector a space to participate in the discussion. We have large events throughout the year to talk with specialists, and we invite academics from different parts of the world to give lectures. We not only discuss general economic issues, but there is also a constant dialogue with different entities of the government. We do not defend any one interest of our members; rather we develop general strategies and defend general interest principles.

What is your outlook for 2016 in terms of economic performance and what are the Chamber’s priority targets for the end of the year?

We will have elections this year, and economic activity generally slows during elections years. However, this election season we are confident that we will have continuity, and it is the first time in history that Peru has had 25 years of constant development and political continuity. We try to unify our development process. For example, we want our doctors, investors, and financial institutions to have internationally recognized credentials and functions and global access to opportunities. The Pacific Alliance is not only a free trade agreement zone, it is more comparable to the eurozone. Peru is a member of APEC and for the second time the APEC meeting will be held in Lima, which is a tremendous opportunity to make a strong market here. In order to do that it is important to develop a strategy and take the right measures to make Peru more attractive.

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