Conflict situations due to politics in Peru greatly affect the integrity and security of the country, in many aspects (Roth, 2021). Generally speaking, Peru, between 2002 and 2013 was one of the fastest-growing economies among Latin American countries, driven by changes in the political climate and by the growth of services, mining, and manufacturing, taking advantage of its natural resources, since due to this the country’s flexible exchange rate, the inflation targeting system has maintained macroeconomic stability (UK Government, 2022). Nevertheless, from 2014 to 2019 those numbers were going down, having the country’s economy to slow down due to the fall in the prices of raw materials and the low number provided by private investments (UK Government, 2022). Although in recent years since 2020, due to the pandemic it worsened, causing the GDP index to drop by 11%, compared to 2019, when it grew 2.9% (ECLA, 2021), this negatively affected the political and economic situation of the country, as well as the rest of the world.

 Although it should be noted that the country has been in political instability due to corruption, and social conflicts that impact investments. As of August 2022, the most recently elected president has changed his cabinet about 4 times rotating between 65 ministers (International Trade Administration, 2022). This provoked allegations of corruption with previous administrations also, when the elections were held in 2021 and Pedro Castillo won against Keiko Fujimori (daughter of former president Alberto Fujimori who was sentenced to 25 years in prison), she alleged that the elections were fraudulent and stolen (Faiola, 2021). Calling hundreds of lawyers and supporters of her party to make a statement that the ballot papers were false and the signatures were forged (Faiola, 2021). 

Peru goes through many domestic challenges, with the aforementioned COVID-19 that was part of one of the countries that were most affected. Other more complex issues such as human rights, where statistical indices indicate that there is much violence based on gender, gender identity, police abuse, and freedom of expression (Roth, 2021). During 2022, in mid-January, an environmental emergency was reported and declared due to an oil spill that occurred off the coast of Lima, naming it as the largest natural disaster in the history of Peru (International Trade Administration, 2022). According to a report of Peru, the country is still ranking on the poorest country list of the world, even though its economy is not one of the worse either, its great natural resources helped a lot in the country’s economy, as well as having low public debt (Allianz, 2022). The report also shows that the country is positioned in the “medium risk” for enterprise, which indicates that the country is not in a position neither bad nor excellent for investments and international trade, it has its pros and cons (Allianz, 2022). The state of Peruvian political risk is not as bad as the larger manufacturing companies like China or the US, but still has good standing in the international market.