American investors in Peru are generally upbeat about recent developments in the country. They like the pro-business approach of the government of President Alejandro Toledo, and they appreciate the competent management of Prime Minister Roberto Dañino and several of his key ministers.

They find the regulatory environment is making steady gains, with fully transparent selection of top officials in recent months. In fact, the complaints one does hear are not about the laws on the books but their implementation, a problem everywhere.

Maple's Cannon

Some of the companies, such as IBM, GoodYear, Citibank and Proctor & Gamble, have been in Peru for decades, and dominate their markets there. For many of these long-term players, Peru is just one of their many operations throughout Latin America.

Others have arrived more recently, drawn by opportunities created through the privatization program or simply the untapped potential of a market of 25 million people.

For some of these ventures, such as Maple and Hunt, Peru is the only Latin American country in which they have a presence.

For all the investors, Peru offered prospects for expansion beyond the tight competition in limited markets back home.

The American Chamber of Commerce in Lima has 450 members, although not all are American companies.

The picture has not always been rosy, however. Inconsistencies in the laws have driven some investors away. There were 30 foreign oil companies in Peru five years ago; today most of those have left.

Even Colombia, with all its security problems, has done much better than Peru in oil exploration and extraction by sticking to one rule book.

Among the big casualties was Shell, which originally discovered the large Camisea gas reserves in 1984. In 1987, socialist President Alan Garcia forced Shell to leave Peru.

In the early 90s, Fujimori brought it back.

Doe Run's Zelms

But, finally, in mid 1998 Shell pulled out of Peru for good, apparently one of many victims of Fujimori's conspiratorial, closed-door dealings.

Hunt Oil is now leading a consortium that owns Camisea and will pipe gas to Lima and a sea terminal in a project that could be worth $3.2 billion in all. Part of the output will supply Peru's needs, while the surplus will be exported.

The head of Hunt's operations in Peru, Carlos Del Solar, estimates Shell lost $500 million on its attempt to secure Camisea as a productive source of gas. The business climate is much improved now, with the travails of Shell just a story told about the past.

Below are some comments from the people running American corporations in Peru, made in the month before President George W. Bush was scheduled to arrive, on March 23.

"It's been a very successful project, built on time and to budget." "Generally, the legal framework is very good.... We have run into some problems.... The government needs to improve implementation of the rules.... More could have been done to attract foreign direct investment, such as lower taxes and royalties to stimulate oil and gas exploration."
"We plan to be here indefinitely, certainly for the medium term."
Rex Cannon, President and CEO, The Maple Companies, which hauled 42,000 tons of equipment and material up the Amazon to build a gas pipeline, generator and powerlines in the Andes

"The workers of Peru are very competitive, making it possible to compete globally.... The initial steps of this government have been in the right direction."
Paul Cadena, General Manager, GoodYear Peru, which started production in Lima in 1943 and dominates both the Peruvian and wider Latin American tire markets.

"The congress has to learn its way. Most of Peru's MPs don't have much experience.... This government is starting to get back into the world of commerce.... We see a lot of potential in Peru."
"You have to tailor your solutions to the needs.... There are four billion people in the world living on $1,500 or less a year. Consumer goods companies that can understand their needs can do good business in developing countries."
Jose Meszaros, President, Proctor & Gamble Peru, and outgoing president of Amcham. P&G holds dominant shares of the detergent, hair care and diaper markets in Peru.

"The top people in government are helpful, but there are still a lot of Fujimori people around."
Carlos Del Solar, General Manager, Hunt Oil Peru.

"Peru is a key country in Latin America, given the problems in the region.... Peru should follow Chile's example in seeking a Nafta-like agreement with the U.S."
"The situation in Peru is positive.... Duke will invest further if regulator OSINERG is run properly. We have had some unwelcome surprises from it in the past."
"Peru's energy growth rate is three times that in America."
"It's been a lot of fun. I have very good people."
Mickey J. Peters, President, Duke Energy International and incoming president of Amcham.

"It is very Americanized here."
"The Amazon (as a destination) has not begun to be developed.... Peru is not promoted."
"As a whole, Lima is a very secure city."
"We had a good January and February," for hotel occupancy.
Craig Smith, General Manager, J.W. Marriott Hotel, Lima.

"The government has consistently improved the regulatory environment." The recent open election of the president of the telecoms regulator, OCIPTEL, "was a great step forward for the new government."
Juan Saca, Executive President, Bellsouth Peru.

"So far, the experience has been very good for us.... We are right on target, maybe better."
"Over three years, we have seen the regulatory environment improve.... We believe in Peru."
Jose A. Gandullia, President for Peru, AT&T Latin America

"Our experience has basically been good.... Concerns need to be heard from the foreign Peruvian investors before the government puts in place new rules affecting the foreign investor."
Jeffrey L. Zelms, President & CEO, The Doe Run Company