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  • Population: 29.5 million
  • Total workforce size: 1.3 million
  • Unemployment Rate: 7%
  • Literacy Rate: 85% Female, 95% Male
  • Official Language: Spanish
  • GNI Per Capita: $3,990
  • AT Kearney Global Services Location Index: unranked
  • Ease of Doing Business rank: 36th of 183
  • Standard and Poor’ currency risk rating: BBB-
  • Economist’s 2010 Democracy Index: 62nd of 167 (Flawed Democracy)
  • Transparency International’s Corruption Perception Index: 78th of 178, score of 3.5
  • Selected as one of 8 LATAM countries to make the Gartner Top 30 Offshore Services Destinations

Peru continues to thrive during the global economic recession, and it’s the only country in the Americas that reported an 8% economic growth rate last year.   While Gartner selected them as one of Latin America’s 8 best outsourcing markets, the country remains off the AT Kearney radar.  This lack of publicity may provide opportunities for cost benefits; combining that with high unemployment and a large workforce makes skilled tech workers available at a very low cost.  Richard Neff, founder of Neff Law Firm, says that despite strong laws for personal and data protection, Peru has problems enforcing them.  According to Neff, “Firstly there are limited resources, and secondly the judicial system is slow, inefficient and corrupt.”  Peru also lacks in the area of English proficiency, so most thriving BPO and call centers serve the US Hispanic population, where the Peruvian accent allows for clearer Spanish communication.  Google Peru began operations last year and acknowledges the great IT potential of Peru’s population.  Other noteworthy US companies that have acquired operations in Peru include IBM, HP, Microsoft, AT&T, Cisco, Citigroup, Verizon, Oracle, and JP Morgan.

"Random Hacks of Kindness" in Latin America

Random Hacks of Kindness, a global community of computer experts that develop practial open technology for social good, is now partnering with Fundación Ciudadano Inteligente (The Smart Citizen Foundation) to support their efforts in Latin America.
Based in Santiago, Chile, Fundación Ciudadano Inteligente was founded with the goal to promote transparency. FCI encourages citizens to utilize information and communication technologies to join the organization's cause and networks with organizations that work in themes of transparency, technology, and social good throughout Latin America.
Random Hacks of Kindness has been responsible for sharing open-source technologies mostly related to water management: flood warning systems, supply-demand water planning, maximized utilization of non-potable water for crop irrigation systems, ect. In one particular project, these technological tools are meeting the tangible needs of the citizens of Peru.

In Peru, water resources management is a major issue. Over 98% of the country's annual renewable water resources is available east of the Andes Mountains, in the Amazon region. This leaves the coastal area of Peru, home to most of the major Peruvian economic activity and half of the country's population, with less than 1.8% of the national freshwater renewable resources. RHoK is working to create a crowdsourced bank of hydrology maps online that will enable more efficient water usage and planning, thus stopping the increasing toll that economic and population growth take on the inaccessible water resources.
The Developing Latin America event will bring together developers, designers, and members of civil society from 6 Latin American countries to find innovative technological solutions for the social good of their country and region. All 6 event locations will participate in the upcoming RHoK Global December 2011 event where they will have an opportunity to collaborate with peers around the world.
Solutions in Latin America:
Buenos Aires, Argentina
Lima, Perú
Mexico City, México
Montevideo, Uruguay
Rio de Janiero, Brasil
Santiago, Chile

The sharing of open source technologies like the ones being utilized by RHoK and FCI offer the promise of rapid development in these areas for the true benefit of society, allowing people's needs for water to be met more efficiently.

Will Peru's New President Stifle Economic Growth?

On June 5, Ollanta Humala, an ex-army lieutenant with no political background, defeated Keiko Fujimori in the Peruvian presidential race.

The election makes for an interesting story, and his victory comes partly from strategy and partly from tremendous luck... since the centrist vote split evenly between three candidates, Humala's only competition in the run-off election was Ms. Fujimori. Some may recall that her father, Alberto Fujimori, set in place the free market reforms that caused Peru's economic boom. Unfortunately, he also ruled as a corrupt autocrat who is now serving 25 years in prison for human rights abuses and corrupt acts committed during his time as president. Because of this, Humala got votes from citizens that may have been fundamentally opposed to his political stance but couldn't bring themselves to support the Fujimori family. To appeal to the masses during the run-off, Humala shifted his policies from left to center and switched his allegiances from Venezuelan nationalist Hugo Chavez to Brazil's former social democrat president Luiz Inacio Lula da Silva. He even brought in political advisers from Brazil’s ruling Workers’ Party. But in the campaign for the first round of the election, on April 10th, he was still proposing a “nationalist” economic policy and pledged to unpick contracts that have brought private investment in mining, gas and infrastructure. Needless to say, Peruvians are wondering where their new president's loyalties truly lie. The uncertainty surrounding the President Elect's policy intentions has created quite a mess for Peru. The day after the election, Lima's stock market dropped 12.5%, the largest daily fall in the country's history, and the shares of many companies with stock in Peru posted significant losses as well. Most of the losses were quickly recuperated, but the potential changes to Peru's financial and social policies have people worried that the country's economic boom might be coming to an end.

Read it here at The Economist.

Bogotá Losing Competitiveness in IT Industry

Due to the recent lack of investment in the IT sector, Bogotá is no longer as competitive as other cities in Latin America. Colombia's ICT minister, Diego Molano, said that the city has dropped from 5th place to 9th in competitiveness among Colombian cities alone, and this lack of competitiveness has caused the Bogotá's internet penetration rate to drop to 12.78%. Colombia as a whole demonstrates a weakness in internet penetration. To compare, internet penetration is 63.5% in Buenos Aires, Argentina, 48% in Santiago, Chile, and 29% in Lima, Peru. Molano calls for increased IT investment, which will in turn increase competitveness, create jobs, and reduce poverty.

Read it at Business News Americas.

Ankur Prakash Discusses TCS Latin America

As part of the Thought Leaders in Cloud Computing Series, Ankur Prakash, VP and COO of Tata Consulting Services Latin America, gives insight into the Latin American outsourcing market. To give a background on TCS Latin America, they began operations in Mexico City in 2003, and have since expanded into Ecuador, Colombia, Peru, Chile, Argentina. Brazil, and Uruguay.

Prakash gives his take on the talent in Latin America, the strategy behind seeking first tier cities, and recruiting from the Latin American labor pool. When asked about the cost advantage of the region, he replied, "As for the Latin American cost advantage, cost arbitrage, I don’t think that any company that works just on cost arbitrage in Latin America can provide any kind of value additional and advantage to local customers." He also explains that because of the vastly different economies that exist in the region, it is difficult to generalize on cost savings. Indeed, companies will find most regional generalizations unhelpful when examining Latin America.

Read the full interview here.

Jet Blue Prepares to Offer More Flights
to Latin America

Jet Blue may become the airline of choice for companies with nearshoring strategies...

JetBlue Airways Corp., with 65 daily trips to the Caribbean and Latin America, may fly to more distant international destinations as it adds fuel-saving winglets to planes and receives new Airbus SAS A320neo jets.

The changes, along with replacing smaller Embraer E190 jets with bigger planes on some routes, will allow the New York-based carrier to fly farther and carry more passengers. JetBlue announced a $2.5 billion order Tuesday for 40 A320neos.

The plan will allow JetBlue to expand its strategy of focusing flying in New York, Boston and the Caribbean. The carrier said it also is likely to use Airbus A321 aircraft it will receive to boost service on high-demand cross-country routes between New York and San Francisco and Los Angeles.

Read it at Ashbury Park Press

Prosperity in Peru


LA Times reporter Tracy Wilkinson traveled to Peru's capital to cover the recent election, and claims that the country's economic growth is brightening up a once dismal city. Until recently, the town of Lima has been a dreary mess, with evidence everywhere telling of the vast income gap between the tiny elite class and the rest of Lima's people. Peru has the fastest-growing economy in Latin America, which is an impressive accolade in a region experiencing so much economic growth.

Dismal shantytowns full of cardboard homes once surrounded the city, but those pueblos jovenes have now transformed into functioning mini-cities with services and buying power. Suburbs and commercial districts are emerging along with a middle class, bringing more business offices, government branches, and better education opportunities for the population.

Read it here from the LA Times.