The political risks in Peru would arise from the many political protests and disputes that occur in the country, which may in turn hinder project developments that involve the extraction of the country’s natural resources (“South America: Peru,” n.d.). Another risk is that the next national election will be held in 2016. Since government officials cannot be reelected for consecutive terms, a new administration may pose changes in the country’s political climate.
On the other hand, one of the economic risks in Peru is that the country’s economy is subject to global price fluctuations due to its dependence on metal and mineral exports as well as on the import of foodstuff. Moreover, the weakness of the country’s infrastructure hampers the growth of its non-coastal areas. As well, the high level of inequality in the country has led to an increase in its poverty level.
The political environment in Bolivia during the last decade has been marked by violent protests, racial tensions, and political instability (“South America: Bolivia,” n.d.). There are also increasing conflicts among various social groups. Moreover, the current president is now in his last term. With a new administration coming into office in 2014, there might be further changes in the country’s political climate.
It should also be noted that Bolivia is one of the least developed and poorest countries in South America (“South America: Bolivia,” n.d.). Although the country has experienced massive economic growth in recent years, the lack of foreign investments in its hydrocarbon and mining industries serve as obstacles to this growth.
South America: Bolivia. (n.d.). Retrieved from https://www.cia.gov/library/publications/the-
South America: Peru. (n.d.). Retrieved from https://www.cia.gov/library/publications/the-world-