Lima’s Economy Is Positively Booming

Once the centerpiece of Spain’s South American empire — by royal decree all commerce of the vice-royalty had to pass through it — Lima was the keystone of its trade network integrating America, Europe and the Far East. Traces of that prosperity can still be seen in the city’s crowded streets of colorful Baroque mansions juxtaposed with modern high-rises and leafy, Parisian-like boulevards. And now the economy is resurging again. Having recovered from political instability, epidemics, juntas, inflation and earthquakes, Peru’s capital city today represents a dynamic metropolis re-emerging as a powerhouse of the Pacific.

As early as the Incas, the region flourished as native Amerinds used clever management, mining, refined agriculture, a brilliant infrastructure and available manpower to create a viable empire. The arrival of the Spaniards and Francisco Pizarro, who founded Lima in 1535, saw the country’s resources exploited to enrich aristocrats back in Spain. After the revolution of 1821, political and military unrest led to a collapse. Earthquakes in 1746 and 1940 severely damaged the city. There followed mid-20th-century years of cholera, Shining Path Maoist terrorism and military juntas.

Returning to democracy in 1980, the new government was severely challenged by high inflation until the 1990 election of Alberto Fujimori launched a dramatic, though authoritarian, turnaround. Ten years later, government measures to improve infrastructure and foster free markets and free trade attracted Spain, the United States, Chile, Switzerland and Mexico as lead foreign investors. Peru found itself amid an economic boom.

Public debt has dropped and foreign reserves are up. In the last 12 years, with a stable currency, low inflation and trade agreements in place, the country’s gross domestic product grew an average 6.3 percent. Exports increased from $8 billion to $46 billion, and private investments surged from $10 billion to more than $44 billion. Peru boasts one of the fastest-growing world economies, and most foreign companies operating in Peru are based in Lima. With 9 million people, one-third of the country’s population, the capital city also functions as the industrial and financial center of Peru.

Fronting the Pacific Ocean and backing up to the Rimac River, Lima proper consists of 43 municipalities, each distinct but obligated to coordinate with the metropolitan authority. Predominant among them are Callao, El Centro, San Isidro, Miraflores and Barranco.

Callao, the 120-acre port municipality, serves as regional hub for Lima’s cargo industry, the largest in South America. Most of the country’s imports and exports and the fishing industry center on Callao. Notable exports include minerals such as gold, silver, zinc and copper; textiles including cotton, clothing and alpaca and llama wool; agricultural products like sugar, coffee, cacao, fruits and vegetables; and chemicals, oil, steel and fish meal.

A UNESCO World Heritage site, El Centro, where the city originated, attracts tourists to some of Latin America’s most historic sites: the daily changing of the guard at the Governor’s Palace, displays at the Cathedral and Archbishop’s Palace on the stately Plaza Mayor, exhibits at cloisters and museums, and strolls through the riverside park being developed by the city along the banks of the Rimac.

San Isidro, lying to the south of El Centro, hosts the principal business district, home to headquarters of corporations and the banking industry. As one of the most important financial centers in Latin America, Lima headquarters monetary institutions including Banco de Crédito del Perú, Sociabank Perú, Interbank, Bank of the Nation and numerous insurance firms.

Contiguous to San Isidro, upscale Miraflores features attractive homes and apartment buildings interspersed with boulevards and shops running down to the sea, where Larcomar, the unusual three-story open-air mall, stretches along the shores of the Pacific.

Finally, Barranco, next to Miraflores, is the city’s bohemian section, home to writers and artists, with popular galleries, restaurants and clubs housed in charming Spanish “gingerbread” buildings.

The available workforce, cheap infrastructure and access to transportation routes aid manufacturing, a sector which produces 23 percent of the gross national product. By 1950, up to 70 percent of the country’s consumer goods were manufactured in Lima, and today almost all of Peru’s heavy industry is located within the city, with more than 7,000 factories producing food, chemicals, leather and oil derivatives. The textile industry, expanded beyond cotton, includes alpaca and llama wool woven with the skill and tradition of centuries.

In a country where rich deposits of gold and silver astounded the Spanish colonists, mining remains an important sector, accounting for about 60 percent of the country’s total shipments abroad. Peru ranks second in worldwide silver production and sixth in gold. It’s the world’s second-largest producer of copper and has significant reserves of coal, iron ore, tin, sulfur and zinc, plus recent discoveries of petroleum and natural gas.

Fishing is a major enterprise, with nearly 10 percent of the world’s fish catch coming out of Peru. Marketable species include bonito, mackerel, sea bass, tuna, shad, yellowfin and pompano. Besides fish for human consumption, the catch provides a major source of fish meal, anchovies processed into fertilizer and high-protein fodder for domestic animals.

The third-largest country in South America, equal in size to France, Germany, Italy, the Netherlands and Switzerland combined and stretching from the sea to the high Andes, Peru enjoys a range of climates broad enough to support almost every conceivable crop. Artichokes, avocados, grapes, mangos, peppers, sugarcane, coffee and cotton are harvested for export. The demand for organic foods is growing, and the wine industry is expanding.

The range of unusual foods helped foster a gastronomic revolution in the region. Perhaps the original fusion food, Peruvian Criollo cooking for centuries blended components from its divergent population: Andean, African, Spanish, German, Asian and Italian. Quinoa and maize, potato-like oca and mashua, various varieties of chilies and, of course, Lima beans are among local foods featured at Mistura, the city’s prestigious week-long international food festival held each September. Integrating native herbs and plants into international dishes to create cocina novoandina, charismatic celebrity chef Gastón Acurio helped elevate the country’s reputation for innovative international cuisine. The latest incarnation of his original restaurant, Astrid y Gastón, now housed in a Miraflores mansion, and his protégé Chef Virgilio Martínez’s Centrale are considered two of the world’s outstanding places to dine.

One negative aspect of agriculture, the cultivation of coca leaves, jeopardizes the use of the land. In 2013, Peru surpassed Colombia as the world’s leading producer of cocaine. For centuries, chewing coca leaves was a religious and medicinal Andean practice; and coca candies, bars, flours and teas are legally sold all over the country. While President Ollanta Humala made the drug war a priority, drug production and narcotics trafficking remain an ongoing source of corruption and environmental destruction.

Tourism is growing steadily despite logistical challenges posed by the traffic, street names and language. While taxis are inexpensive, they frequently encounter bumper-to-bumper “loco,” especially when roads are shut down for upgrading and improvement. Metropolitan express bus systems substitute for subways along limited routes, and a new Corredor Azul provides a constant stream of blue buses up and down the central Avenida Arequipa, but these are often packed; monitors stationed at each stop regulate passengers pushing on and off. Often renamed in changing regimes or as they cross municipality lines, streets can go by more than one name, and posted signage is erratic. Except in the business district, the Spanish language predominates, and English translation is often required.

One of the most vibrant economies in the world, Peru is projected to remain strong despite the vulnerability of reliance on exports. While the country needs to overcome social issues such as inequality and address problems arising from cocaine production, Peru seeks foreign and domestic investment in all sectors of the economy. In 2019, Lima will host the Pan American Games. With one of the highest GDP growth rates worldwide, the capital city is poised to reassert its ancient reputation as an economic force.

Things to Do in Lima

Traffic can make a foray from the business municipalities to El Centro a daunting challenge, but it’s inexcusable to omit a visit to the important sites around the Plaza Mayor, including a climb up the tower of the Church and Convent of Santo Domingo, past the giant bells, for a look over the city with views all the way down to the ocean. Nearby, a spacious converted bank, the Museo Banco Central de Reserva del Perú, houses a beautifully presented collection of Incan and pre-Columbian artifacts and modern Peruvian paintings.

No visitor should leave Lima without sampling a Pisco sour, the national drink. Bartenders specialize in the frothy concoction of sugar water, lime juice and egg white, shaken with the national 42-proof grape brandy and capped with an essential drop of bitters. Try one while catching the sunset in the lounge on the second floor of the Marriott right at the water’s edge and watch surfers glide in on the waves far below. Stop by the Marriott’s Majestic Casino or drive over to the accessible bars and galleries in Barranco. Try one of six craft beverages brewed at Barranco Beer Co. or hunker into Rustica to sample its take on fusion dishes.

Soccer games at the Estadio Nacional can be rowdy fun. Concerts and festivals take place at the Gran Teatro Nacional; and because Limenos love movies, there are multiplexes in Miraflores and frequent film festivals at the Centro Cultural PUCP in San Isidro.

CHECKING IN WITH MARCO TABET

General Manager, Hilton Lima Miraflores

You came to Lima after working in eight countries, four in Latin America. How did Lima strike you?
I didn’t know I’d be so positively impressed with its cleanliness, parks, green space, nice museums, art, restaurants, safety and the beautiful ocean — how many capitals have an ocean? I’m able to live close to the hotel and can bike to work all year long. It’s a good place to live. There’s a good quality of life. I really like it. The only drawback is the winter, which is tough, long and cold, with not much sun. But it never really rains here. It’s a desert. There may be gray fog or mist, but you don’t really get wet.

What is the business situation in Lima?
I can’t say there is any business habit that strikes me as negative. It’s booming, driven by the mining industry. There’s a lot of growth, infrastructure being built. There’s so much opportunity, a lot of big companies are seeing the potential and opening here. It’s a positive economy. A few tips for businesspeople working in Lima: The electricity is 220; and because it’s easy to get tied up in traffic, it’s helpful to stay in a hotel near where you’re working. Tourists are advised to avoid independent street taxis.

How concerned should we be about safety in the city?
At the Hilton, we have our own fleet out front with Mercedes cars and insurance. In the old town, as in any big city, you need to know how to walk around — don’t wear obvious diamonds and big watches. But Miraflores, San Isidro and Barranco are safe and well-run. Miraflores has an app for reporting problems; if you see a hole in the street or broken street light, you take a picture and email it to the municipality.

What is it like to run a hotel here?
I have to say what first struck me is the hospitality of the people. There is a real culture of service. They like to serve, they smile and look you in the eye. Without those standards, the training would be hard. So it’s like starting with good ingredients, and it makes my job much easier.

What activities do you recommend for diversion after work?
People need to experience the local food. Ceviche is a must, and a lot of food uses local ingredients. You open the menu and you barely know what you’re eating. It’s a discovery every day. You can go to one of the world-class restaurants or to a little cevicheria with a nice cold beer and it’s a fantastic experience as well. Peruvians are so proud of their cuisines. Waiters can tell you the whole story about the dishes they’re serving. Some tourists come here just for the food. You can’t leave Lima without a few extra pounds.

Lima Info to Go

A giant six-pack of Coca-Cola at the entrance roundabout greets arrivals at Jorge Chávez International Airport in Callao. Although technically only about 10 miles from the city center, it can be a painful hour-long trip in the congested traffic. While there are shuttle services, the best option is a taxi prearranged through your hotel. There are standard fees to different areas of town; ask the driver to show you the fee chart. The trip to Miraflores is around $20. The international departure tax is customarily included in the price of the air ticket.

Lima: Just the Facts

Time Zone: GMT -5
Phone Code: Country code: 51 City code: 1
Currency: Nuevo sol
Entry/Exit Requirements: Tourists may stay up to 183 days with a passport valid for at least six months and two blank pages for stamping. Business travelers must apply to the Peruvian embassy for a multi-entry visa good for up to 12 months.
Official Language: Peruvian Coast Spanish. Quechua and Aymara may also be spoken.
Key Industries: Shipping, shipbuilding, banking, oil refining, food processing, manufacturing cement, chemicals, pharmaceuticals, plastics, textiles, clothing, furniture

Where to Stay in Lima

Hilton Lima Miraflores The Hilton combines the best of a brand-name tower and boutique lodging in a quiet, accessible location with an executive floor, top-floor infinity swimming pool and a creative breakfast cart buffet. Ave. La Paz 1099 $$$

Sheraton Lima Hotel & Convention Center Best El Centro option, this modern tower offers dining in a cool beige lobby and a wall-size TV in the cozy Kero bar. Access the Plaza Vea shopping mall next door. Paseo de la República 170 $$$

The Westin Lima Hotel & Convention Center This glossy mirrored tower and conference facility in the middle of the financial district features more than 300 guestrooms, two restaurants, a spa and indoor pool. Calle Las Begonias 450, San Isidro$$$

Restaurants in Lima

ámaZ Restaurante Its name is abbreviated from Amazon, but it could also stand for amazing, with deliciously inventive cuisine based on unusual ingredients from the river region like fish with hot basil nut oil. Ave. La Paz 1079, Miraflores $$

Domus Restaurant & Café Select from the daily three-course $8–10 fixed-price menus in this intimate El Centro restaurant popular with local journalists, located in a restored 19th-century mansion. Ave. Miro Quesada 410 $$

Tanta This chain is part of Gastón Acurio’s empire. The café in El Centro serves classic milky pepper chicken, aji de gallina, at sidewalk tables in a pleasant outdoor passageway. Pasaje Nicolás de Rivera 142 $$