PERU INVESTMENT OPPORTUNITIES IN May 2007 Japan

PERU INVESTMENT OPPORTUNITIES IN May 2007

Japan and Peru today: Trade Peru’s main exports to Japan (2006): 1. Copper 2. Zinc 3. Fishmeal 4. Silver Japan’s main exports to Peru (2006): 1. Motor vehicles 2. Transport equipment 3. Electronic devices 4. Car and truck tires

WHY INVEST IN PERU?

Investment plays an important role in the country’s Economic Growth and signals a promising future GDP (var%) Private Investment (var %) Public Investment (var %) Employment in companies with over 10 employees (var %) 2004 4, 8 9, 1 5, 7 2005 6, 4 13, 9 12, 2 4, 5 2006 8, 03 20, 1 13, 0 7, 3 Exports (var % in US$) Imports of capital goods (var % in US $) GDP of the construction sector (var %) Tax Collection (var %) 40, 9 19, 6 4, 7 13, 6 35, 3 29, 6 8, 4 14, 3 36, 9 35, 4 14, 7 27, 8 Credit System of the Private Financial Sector Pensions Funds (var%) IGBVL General Index of the Stock Exchange Market of Lima (var %) 4, 7 17, 5 7, 9 25, 5 16, 6 41, 3 52, 3 29, 4 168, 3 Source: Central Reserve Bank of Peru, National Institute of Statistic and Information and SUNAT.

Sustainable economic growth with annual forecasted rate greater than 8% Peru 8 8, 03 (Annual variation %) GDP Growth 6, 4 6 5, 2 3, 9 4 Developed 2 World 0 80 82 84 86 88 90 92 94 Source: International Monetary Fund and the Central Reserve Bank of Peru. 96 98 00 02 04 06

Annual Exports growth greater than 30% Accompanied by private investment growth (average annual % variation) 23 750 22 000 25. 0 0, 7 0, 6 17 336 17 000 0, 5 12 809 12 000 6 955 7 026 7 714 7 000 9 090 41% 35% 37% 0, 3 0, 2 0, 1 10% 2 000 0 2001 2002 2003 Exports in millons US$" 2004 20. 0 Private Investment 15. 0 0, 4 18% 2000 Private Investment grew 20, 1% in 2006* 2005 10. 0 5. 0 0. 0 2006 % Exports Growth (base 2000)" -5. 0 Source: Central Reserve Bank of Peru. * Forecasted 06 05 04 03 02 01 -10. 0

Rise in the commercial exchange Increase in the imports of capital goods (Millions of US$) ( Millions of US$) Capital goods for the Industry Transport Equipment Others Source: Central Reserve Bank of Peru.

Peru is progressively reducing its fiscal deficit (% of GDP) By increasing its central government tax revenues 2, 5 2, 0 1, 5 1, 0 0, 5 0. 0 0, 0 -0, 5 -0, 4 -1, 0 -1, 5 -1, 1 -2, 0 -1, 7 -2, 5 -2, 3 -3, 0 -3, 5 -3, 3 2000 2001 2002 2003 20042005 2006 2007* Source Central Reserve Bank of Peru. * Forecasted by the Ministry of Economics and Finance Source: SUNAT

. . . in a framework of macroeconomic stability. . . Exchange rate in Latin America Inflation in Latin America (Index January 2001=100) (Annual var. %) Peru Argentina Peru 205 Brasil 30 Brasil Chile 185 25 Colombia Mexico 165 Chile Mexico 20 145 15 125 105 2004 2003 2002 2001 N-06 M-06 N-04 A-03 A-02 E-01 Source: Bloomberg and Central Reserve Bank of Peru. -5 2000 0 85 Source: Central Reserve Bank of Peru, Brasil, Chile, Mexico and Argentina.

17 275 18 000 16 000 14 097 12 681 14 000 12 000 9 598 10 194 10 000 8 180 8 613 22, 5% 8 000 11, 2% 24, 4% 6 000 11, 4% 6, 2% 4 000 2 000 5, 3% 0 2001 2002 2003 2004 2005 2006 The careful and responsible management of our economic program has allowed us to keep our country risk index among the lowest in the region. 0, 5 0, 4 0, 35 0, 3 0, 25 0, 2 0, 15 0, 1 0, 05 0 JP Morgan Index EMBI+** (Milions of dollars) Net International Reserves With increasing Net International Reserves that represent more than 12 months of imports Net International Reserves (in US$ Millions)" Annual Variation Updated 23 March, 2007 Source: Central Reserve Bank of Peru. Source: Bloomberg

Peru offers a favorable legal framework foreign investment ü Non discriminatory treatment. ü Irrestrictive access to most economic sectors. ü No performance requirements. ü Free transfer of capital. ü Free competition. ü Guarantee for Private Property. ü Freedom to purchase stocks from locals. ü Freedom to access internal and external credit. ü Freedom to pay royalties. ü Network of investment agreements and member of ICSID and MIGA Legal Framework: Constitutional provisions, “Law for the Promotion of Foreign Investment”, Legislative Decree N° 662, “Framework Law for Private Investment Growth”, Legislative Decree N° 757, “Law for the Promotion of Private Investment in Infrastructure and Public Service Works”, Approved by Supreme Decree N° 059 -96 -PCM

Free and preferential market access to: § United States § European Union § Mexico § Chile § Andean Community of Nations § MERCOSUR §Thailand* Peru has concluded the negotiations for the Trade Promotion Agreement (TPA) with the United States Trade Agreements under negotiation or consideration: Singapore Canada EFTA China

Main Investment Opportunities by Sectors Forestry Plantations Agribusiness and Agro exports Fishing and Aquaculture Textile and other manufactures Mining and Hydrocarbons Tourism and other services INFRASTRUCTURE

Sowing opportunities… Agribusiness sector

Agribusiness Products Agribusiness exports (US$ MM) Productivity of the Peruvian Agribusiness Product Mango Asparagus Sugar Cane Grape Avocado Coffee Paprika pepper Exports of Agribusiness products (Millions of US$ FOB) Position by Product World Latin America 1 1 1 3 1 5 4 6 4 10 3 Agribusiness Exports Markets (2006)

Fishing and Aquaculture Power

. . . Fishing and Aquaculture Advantages. . . "El Niño“ Phenomenon Source : PROMPEX. Species under-worked with high potential: Horse Mackerel, Giant Squid or “Pota”, among others. ØWorld’s first exporter of fishmeal (1, 8 to 2 million tons per year), since 1993. Ø World’s first exporter of fish oil (more than 150 thousand tons per year), since 1999. Source: FAO, Trade. Map and UNCTAD. Source : Prompex.

Mining Sector

Mining Sector Advantages Production Ranking 2006 Latin America Worldwide Copper 2 3 Gold 1 5 Zinc 1 3 Silver 1 1 Lead 1 4 Tin 1 3 Molybdenum 2 4 Bismuth 2 3 Tellurium 1 2 Source: Ministry of Energy and Mining of Peru has an outstanding competitive position in worldwide mining, leading this sector in Latin America Mining exports (US$ million) Molybdenum production has • risen by 28% in 2005, and it became third metallic mining export product (US$100 million/month) Bismuth production totaled • 1000 MT and Tellurium production 28 MT, in 2005. Source: Central Reserve Bank of Peru

Knitting and Sewing the future …

Textile Exports (Millions US$) Textile and Apparel Sector Source: BCR “Proximity to the USA and same time zone provide Peruvian exporters shorter delivery and replenishing times” Trademarks served by Peruvian Industries Textile Exports – 2006 Main Markets Source: PROMPEX Abercrombie & Fitch Adolfo Dominguez Ara Intersales Armani Exchange Calvin Klein Donna Karan Inc. DKNY Duck Head Apparel Eddie Bauer Guess Inditex/Zara Izod JC Penney J. Meneses G. Massino Dutti Nautica New Balance Lacoste Lands End Levy Strauss Oakley Palacio de Hierro Kenneth Cole Polo Ralph Lauren Perry Ellis International Ragman Reebok Russell Corporation The Gymboree Corp. Tommy Hilfiger Vanity Fair Saks Inc.

Forestry sector

Forestry Sector Peru is a country with excellent conditions forestry. Its rich natural resources place it second in Latin America and tenth in the world. Forestry Exports (US$ Millions) Source: Operational Exporting Plan. Maximize. 2004 • Forestry exports have increased from US$ 26 MM in 1996 to US$ 168 MM in 2005. This shows a growth rate of 26% per year the last 9 years. • Peru has potential to export US$ 3 bn per year in woods and by-products. Source: SUNAT.

Investment Opportunities in Infrastructure Chachapoyas Paita Port T. Piura EPS Grau Cajamarca Road infrastructure Airports Salaverry Port T. Pucallpa Chimbote Port T. Ports Telecommunications Hydrocarbons IIRSA Center Branch Road Network 4 Puerto Maldonado Regional Pipelines Supply driking water for Lima Interocean Road Corridor Sanitation Energy Cusco Pisco Port T. Costa - Sierra Nazca L. T Machupicchu Cotaruse Ayacucho Arequipa Juliaca Ilo Port T. Tacna

Bet on the future … Tourism Sector

Peru Strong figures Strategic location Excellent opportunities