Professor Dr. Kriengsak Chareonwongsak Peru is a place of high promise

Peru is a place of high promise for future trade relations with Thailand because it is the gateway nation of the ANDEAN Group, which has a combined population of more than 110 million people. With the proper strategy, Thailand-Peruvian trade could grow from its present limited levels into a mutually beneficial economic relationship. Peru could become the jumping board for Thailand to access other nations in South America, and beyond, to the rest of Latin America. Proactive steps to creating such a relationship include the distribution of trade information, the nurturing of good bi-lateral business relationships, negotiating a reduction in tariffs, the development of compatible products and services that will suit the needs of consumers in both countries, the development of public utilities and the improvement of transportation services linking the two nations. Peru is a land of possibility for Thailand.

new gateway to Latin America

Professor Dr. Kriengsak Chareonwongsak
Executive Director, Institute of Future Studies for Development (IFD)
kriengsak@kriengsak.com, http://www.ifd.or.th

Kriengsak Chareonwongsak The Peruvian economy

The Peruvian economy is more stable than that of its neighbors. Peru has experienced higher economic growth than any other nation in South America during the past decade. In 1999, when many South American nations faced economic slow downs, or serious economic crises, or less than 1% economic growth, Peru’s economy grew by 1.4%. This was due to its stable currency caused by international reserve funds of more than 15 months of the country’s import value. The Peruvian financial industry is also strictly regulated in such a way as to promote vigorous development of the nation’s financial system, a natural lure for overseas trade and investment interests.

However, some drawbacks to this proposal do exist. Peruvian tariffs are, on average, higher than those of neighboring countries. However, between 1990 and 1998, Peru’s import levies have fallen steadily from 80% to 13%. Moreover, laws exist for the creation of four types of free trade zones specializing in the following four areas: export processing, special commercial treatment, special development, and tourism. This falls in line with WTO direction that supports the elimination of none-tariff barriers, state subsidies, the need for import licenses, import prohibitions and quantitative restrictions. In addition, Peru is the only nation in the ANDEAN Group that is, like Thailand, a member of APEC. This link alone should open opportunities for the reduction of trade barriers between the two countries.

new gateway to Latin America

Professor Dr. Kriengsak Chareonwongsak
Executive Director, Institute of Future Studies for Development (IFD)
kriengsak@kriengsak.com, http://www.ifd.or.th

Kriengsak Chareonwongsak benefit of developing

One other benefit of developing such a relationship is the complimentary nature of the production structures in each of the two regions. In most likelihood, Thailand could benefit from the variety of primary and secondary level manufacturing conducted in Latin America. In turn, that region would benefit from the electronic and high technology goods produced in Thailand. Peru is a country rich in mining and fishery resources, meaning that most merchandise imported from Peru would be raw (primary level) products such as mined metals, fish and marine products, vegetable oils, crops and animal products. Peru would welcome secondary and tertiary level products from Thailand such as motor vehicles, electrical appliances, rubber products and synthetic fibers. Trade between the two nations would grow as each became more familiar with complementary products and industries in the other nation. In this way, trade would be mutually supportive instead of competitive. 

new gateway to Latin America

Professor Dr. Kriengsak Chareonwongsak
Executive Director, Institute of Future Studies for Development (IFD)
kriengsak@kriengsak.com, http://www.ifd.or.th