Diego de la Torre vividly recalls the urgent call he received last year from his joint venture partners in the United States less than 24 hours after Peru's President Ollanta Humala took office.
"They nervously asked me, 'What happened? What's going on?'" recounts de la Torre, chairman and co-founder of La Viga, Peru's largest building materials distribution company, who also has a joint venture with a U.S. company that produces dry ready mix concrete in the local market. "They had heard in the news that a president sympathetic to (Venezuela's President Hugo) Chavez had won the elections--when I had sold them the idea that Peru was a country as attractive and stable as Chile. We ended up delaying investments for about a month and a half."
Leaders of many of the country's top businesses took a similar wait-and-see stance following the election results, which brought victory for self-proclaimed nationalist presidential candidate Humala in July of last year.
"All bets were on what was going to happen during the government's first months," says Mauricio Olaya, partner at Muniz Ramirez Perez-Taiman & Olaya, one of the country's top law firms. "Fortunately, the change in government came during a time of high investor optimism. Suddenly stepping on the brakes with projects already in the pipeline was not an option."
Fast forward to today--exactly one year after President Humala took office--and many of the country's top businesses are already moving ahead with programmed investments, or are ready to do so.
"The government's message to maintain the momentum of the economic model built consumer confidence, reflected in healthy internal demand, and encouraged business executives to continue with their investment plans," notes Rizal Bragagnini, general manager of San Fernando, the country's largest poultry company.
This sentiment is echoed among other Peruvian business leaders, who say that after an initial stage of apprehension following elections, they are proceeding with their business plans, albeit cautiously. "Despite this uncertainty, we didn't put the brake on or cancel our investments because of the potential risk the change in government represented," says Andre Cangucu chief financial officer of GDF SUEZ Latin America, whose local subsidiary EnerSur operates four electricity generation plants.
"We intend to continue to invest in Peru. There is ample room to grow not only in the energy sector, but in other sectors as...