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Peru has all the good things a South American country can have going for it – vast natural resources, tourist destinations and a strong economy – as well as all the bad things that come with the territory – a spotty political history, poverty, industrial pollution and inadequate infrastructure development. But the recent economic downturn has been favourable for the country as investors look to the more stable nations like Peru, Chile and Brazil to set up operations and make investments....

Peru has all the good things a South American country can have going for it – vast natural resources, tourist destinations and a strong economy – as well as all the bad things that come with the territory – a spotty political history, poverty, industrial pollution and inadequate infrastructure development. But the recent economic downturn has been favourable for the country as investors look to the more stable nations like Peru, Chile and Brazil to set up operations and make investments. As one lawyer puts it: "I think from an economic standpoint Peru is kind of the prized part of the region."

The Peruvian government is using its new-found leverage to promote infrastructure projects throughout the countryside. While private capital has dried up in many of the neighbouring countries, Peru has been able to organise public-private partnerships (PPPs) with multilateral lenders and development institutions. In 2008, President Alan García Pérez signed a law to promote local and regional PPPs, and the government is now handing out concessions at a rapid pace. Last year the state agency for promoting private investment, ProInversíon, awarded the concession to develop the port of Paita – Peru's second-largest port – to a consortium of Portuguese and Peruvian companies for $227 million. Several other concessions for toll roads and water treatment plants have been awarded or are being developed.

While oil and gas projects are being developed at breakneck pace, financial lawyers note the country is lagging behind many of its neighbours in developing renewable sources of energy. One explanation for this, some sources propose, is that there is a good deal of private investment for gas and oil development, while wind and hydroelectric production generally require a greater participation of government financing. Recently-awarded LNG pipeline concessions point to a further dependence on petroleum for Peru, at least in the short-term outlook. As renewable energy projects in other jurisdictions begin to turn profit, Peru's attorneys expect the market to grow.

The government's promotion of private investment has not been met with complete acceptance by Peru's populace. A protest in June led to the cancelling of two controversial laws that would have opened portions of the Amazon rainforest to private development. Emerging reports of longstanding pollution by foreign mineral and oil companies in Peru's remote areas is putting pressure on the government to enforce more stringent oversight on foreign operators and to hold companies accountable for past behaviour. Financial lawyers see "social responsibility" as a catchphrase for foreign investors in 2010.