Issue 84 - November | December 2019

Drazen Maloca serves as economic delegate of Chile from Bolivia and Peru and promotes more Austrian involvement in the region.

Drazen Maloca, Außenwirtschaft Austria
Peru and Bolivia are hardly on the radar of domestic entrepreneurs - wrongly?

Maloca: Under two percent of Austrian exports go to South America. That is, for many Austrian companies, exporting to this continent is like traveling to the moon. And that applies above all to Bolivia and Peru. Both states are boomers. In different ways: Peru follows the Chilean model with many free trade agreements and liberal economic elements. Bolivia has chosen a different model, many large industries have been nationalized. But President Morales has also listened to experts and managed to set substantial growth rates.

Where are the opportunities for domestic companies?

Maloca: Peru and Bolivia both want to move away from pure commodity exports and their own industries. Austrian machines can certainly come to the train. When you travel to Lima you will see a lot of new office and residential buildings. If the economy is doing well, more is invested. And more built. For example, roads, hospitals, water and solar power plants. As nibble then Austrian companies.

In Peru, politicians also like to eat. Is not widespread corruption a big threat to domestic companies?

Maloca: Peru is trying to build trust. The Odebrecht scandal is currently exposing a great deal, the Peruvian authorities show that nobody is stopped, the fight against corruption starts at the top. And in economic terms, we do not see zigzag, but stability, growth and a clear free trade course.

Bolivia, on the other hand, is more dangerous for investors as there is a constant threat to companies being nationalized.

Maloca: That's right, especially Chinese development banks are providing the Bolivian president with the money to invest in the nationalized industries. In addition, Bolivia is still two steps behind Peru in terms of economic development. As long as Evo Morales is president, the country will probably open only hesitantly.

Vielen Dank für das Gespräch!
Photo: Außenwirtschaft Austria

To the main story

Andiner departure

Slowly but surely, Peru and Bolivia are emerging from the shadows of their big neighbors. While it is still creaking and creaking politically, the economy in the two Andean countries has been running smoothly for years.