Peru: booming, despite it all.

Peru has benefited from more than just a rise in Asian demand for its raw materials. According to Santander Investments, an arm of the Spanish bank, private investment this year will grow at a rate of 7% due to the construction of gigantic mining projects, highways, and Mexico's America Movil--the wireless behemoth owned by Mexican billionaire Carlos Slim--which is moving into the telecommunications sector. At the same time, companies in the food and beverages businesses, as well as agribusiness and textiles, are helping to boost the domestic economy.

A year ago, the risk-ratings agency Standard & Poor's (S&P) improved the country's standing to stable. "Despite the relatively low popularity of President Toledo, there has been prudent management of government spending," says Lisa Schineller, director of sovereign ratings for the company. S&P forecasts 5% GDP growth in 2005.

Nevertheless, the ratings agency notes that the country must increase its tax base, which is just 10% of GDP, among the lowest in the region. In addition, the export base of the country is nearly 22% of GDP, while other countries in the region with the same rating are at 30%. "Peru continues to be a somewhat closed economy," says Schineller.