ECONOMIC ANALYSIS OF CUSCO, PERU - URP

UNIVERSIDAD RICARDO PALMA FACULTAD DE ARQUITECTURA Y URBANISMO

THE INCA CITY Economic Analysis

Inca accounting was based on decimal ordering. The Quipus used a system of positioning knots along the cords representing units to tens of thousands.

Analysis ECONOMIC

Peru has had social and economic problems. Although the constant political changes have revealed the country’s crisis, the economy has accumulated more than 20 years on a path of economic growth. It is one of the countries with the best macroeconomic data in Latin America and has prevailed over the recent post-covid global financial crisis.

“The Peruvian economy has had a positive performance because it has several aspects: the main thing is that it maintains excellent macroeconomic fundamentals. It has the highest reserve levels in the region, concerning its Product (Gross Domestic) and the lowest levels of public debt concerning GDP”. Former Minister of Economy of Peru, Luis Miguel Castilla.

Mansilla Romero, Sol Maria @28.03.97.23

Valladares Caceres, Alexis

Sucasaca Callata, Joseph @josephsuksk

Flores Rojas, Jhonny @ architecture.jflores

ECONOMIC ANALYSIS

1. ECONOMIC ACTIVITIES

2.

3.

4.

5.

6.

9.

GDP / EAP / GBA

ECONOMIC PERFORMANCE

SOCIOECONOMIC STATUS

AGRICULTURE

MINING

7. HANDICRAFTS

8. FISHING

ECONOMIC REGULATION

10. ECONOMIC PROBLEMS

MapofthemaineconomicactivitiesinthecityofCuzco//Macrolevelanalysis

SocioeconomicstratumLegend

Formal occupation at the bottom of the valley

Consolidated Informal Occupation

Informal peripheral occupation on slopes

Velasco Astete Airport

Polarizing core of commercial activities and services

Secondary Core of Commerce and Services

Markets and Camals

Main Administrative Center

Secondary Administrative Center

Industrial Areas

During the first quarter of 2022, agricultural production increased by 3.6% compared to the same period of the previous year.

HYDROCARBONS AND MINING PRODUCTION

For the first quarter of 2022, this sector experienced a year-on-year growth of 3.6%.

-55% -13.2%

For the first quarter of 2022, fishing activity decreased 25.7%, compared to the same period in 2021. Decreasing trout production to 55% and silverside to 13.2%.

-17.3% -7.6%

PUBLIC BUDGET EXECUTION

For the first quarter of 2022, the execution of the public budget in Cusco fell 11% in real terms, compared to the same period in 2021. Gross capital formation expenditure decreased 17.3% and current expenditure decreased 7.6%.

Source: Ministries of Agrarian Development and Irrigation, Energy and Mines, Production, Economy and Finance.

SOCIOECONOMIC STATUS

According to the National Institute of Statistics and Informatics (INEI). The socioeconomic stratum of the area to be intervened is High, while in its immediate surroundings, a Medium-High stratum predominates. It is also observed that as we move away from the entrance to the airport, the stratum is lower.

SocioeconomicStrataMap//Microlevelanalysis

SocioeconomicstratumLegend

No Stratum

Medium Local Commerce focused on Pharmacies and Restaurants

Medium High Local automotive trade and warehouses

High Residential

The Cusco region has experienced a decline in its GDP in recent years, with a drop of -1.5% in 2017. The arrival of the pandemic and its economic and social effects aggravated the situation, leading to a contraction of GDP in 2020 by 12.3%, a higher percentage than the national average of -11.1%. This was mainly due to the sanitary restrictions implemented by the Government to control the spread of COVID-19, which led to the temporary stoppage of many economic activities and a decrease in the number of workers in others, including mining. In 2020, the main economic activity in the Cusco region was extracting oil, gas, and minerals, representing 46.2% of the Gross Value Added. Other services represented 13.9%, followed by trade (6.9%), construction (6.4%), agriculture, livestock, hunting and forestry (5.4%), manufacturing (5.3%), administration public and defense (5.1%), transport, mail, and messaging (3.9%), telecommunications and other information services (3.1%), accommodation and restaurants (2.2%), electricity, gas and water (1.4%) and finally fishing and aquaculture (0.01%).

[ 2010 ] 8,3%

[ 2011 ] 6.3%

[ 2012 ] 6.1%

[ 2013 ] 5.9%

[ 2014 ] 2.4%

[ 2015 ] 3.3%

PERU & CUSCO REGION // 2010-2020

Source: INEI-PBI by department 2010-2020

LegendCensusNationalDataPEA2017

[ 1 ] Amazonas

[ 2 ] Áncash

[ 3 ] Apurímac

[ 4 ] Arequipa

[ 5 ] Ayacucho

[ 6 ]Cajamarca

[ 7 ] Cusco

[ 8 ]Huancavelica

[ 9 ]Huánuco

[ 10 ] Ica

[ 11 ] Junín

[ 12 ] La Libertad

[ 13 ] Lambayeque

[ 14 ] Lima Metropolitana

[ 15 ] Loreto

[ 16 ] Madre de Dios

[ 17 ] Moquegua

[ 18 ] Pasco

[ 19 ] Piura

[ 20 ] Puno

[ 21 ] San Martín

[ 22 ] Tacna

[ 23 ] Tumbes

[ 24 ] Ucayali

[ A ] Ccorca District

[ B ] Cusco District

[ C ]Poroy District

[ D ]San Jeronimo District

[ E ] San Sebastian District

[ F ] Santiago Disrict

[ G ] Saylla District

[ H ] Wanchaq District

Source: INEI - National Census 2017: XII of Population and VII of Housing

Cuso Region Peru

LegendGrossValueAddedaccordingto

[ A ] Extraction of gas, oil, and minerals

[ B ] Other services

[ C ] Trade

[ D ] Construction

[ E ] Manufacturing

[ F ] Agriculture, Livestock, Hunting and Forestry

[ G ] Lodging and restaurants

[ H ] Transportation, Warehouse, Mail, and Courier

[ I ] Public administration and defense

[ J ] Telecommunications and other information services

[ K] Electricity, Gas, and Water

The mining and hydrocarbons sector represents region’s growth has slowed due to the poor performance

[ 1,2,3 ] When comparing the figures registered in 2019 with what neration of GVA with an increase of 1.4%; On the contrary, we which were the activities that reduced their percentages during

Source: INEI - GDP by department, period 2019-2020

economicactivity2019-2020

Year 2019

Year 2020

GROSS VALUE ADDED // GVA

represents almost half of the Cusco production. However, in recent years, the performance of mining and hydrocarbon activities.

what was generated in 2020 for each activity, in the graph we can see that the mining sector had more significant participation in the ge

we observe a fall in activities such as accommodation and restaurants (-2.3%), commerce (-1.5%), construction (-0.9%) and transport (-0.6%); during the year 2020.

AGRICULTURAL

The agricultural subsector experienced a 12.4% decrease in 2021 due to lower production of crops destined for the domestic market, especially potatoes and alfalfa. However, there was a significant increase in the production of peas. In the foreign market, production decreased due to the lower avocado and artichoke harvest, although there was an increase in cocoa production. Overall, the subsector decreased by 1.7% compared to

SECTOR

2020 due to reduced feed oats, starchy corn, and coffee production. In the livestock subsector, although a 1.9% decrease was recorded in December due to lower alpaca fiber production, overall, the subsector grew 9.3% in 2021, thanks to an increase in milk production.

Source: Howard Z. 2019 . Photography

Production Graph of main Agricultural Products // Thousands of tons

The following graph shows the primary production of the Agricultural Sector, indicating, according to MIDAGRI, the % variation of the years 2021 and 2020 from January to December, guiding its growth (+) and decrease (-) in each product and sector.

The following graph also shows its percentage structure according to the product in 2019.

Source: MIDAGRI - Ministry of Agrarian Development and Irrigation

AGRICULTURAL SECTOR

Main products of economic importance in the agricultural sector in Cusco

LegendSectorAgropecuario//Cusco//2007

[ A ] Agricultural Area in the Cusco Region

[ B ] Non-agricultural area in R. Cusco

[ A.1 ] Potato

[ A.2] Starchy corn

[ A.3 ] Coffee

[ A.4] Hard yellow corn

[ A.5] Wheat

[ A.6 ] Paddy rice

[ A.7 ] Dry grain beans

[ A.8 ] Soy

The total agricultural area corresponds to 13.19% of the department of Cusco. 86.8% corresponds to the non-agricultural space occupied by natural pastures, mountains, and forests.

The department’s geoeconomic units are linked to but do not precisely coincide with, three main ecological floors. Within the framework of the process of elaboration of the Strategic Plan for Departmental Development of Cusco to 2012, 6 decentralized workshops were held, which grou ped the provinces of the department according to their belonging to one or another geoeconomic unit—finding the area of Cusco in Agriculture, se condary and tertiary industries.

MINING SECTOR

The mining and hydrocarbons sector decreased 4.4% year-on-year in December, explained by lower production of hydrocarbons (-4.5%) and metal mining (-4.1%). Thus, the sector decreased by 4.3% in 2021.

The mining and hydrocarbons sector decreased by 4.4% in December, explained by lower production of hydrocarbons (-4.5%) and metal mining (-4.1 percent). In hydrocarbons, there was a lower production of natural gas liquids (-7.1%), and in metal mining, there was a lower extraction of gold (-16.6%), molybdenum (-12.8%), and copper (-3.8%).

• In 2021, the mining and hydrocarbons sector contracted by 4.3% compared to 2020. The result was explained by the lower production of natural gas (-6.2%), copper (-5.2%), and natural gas liquids (-4.3%). In particular, the production of hydrocarbons was affected by maintenance activities in March and April and, due to technical problems in May and July - September.

• In December, the average price of copper was in cvt. US$/lb 433.3, which meant a decrease of 2.2% compared to the previous month. The reduction reflected the slower pace of manufacturing activity in China.

Main products of economic importance in the metal mining sector in Cusco // In Var. %

Mining Investments by Region // In Millions of US$

Source: MINEM- Ministry of Energy and Mines

The international price of Copper // In ctv. US$, average data for the period

Mining activity in Peru has grown steadily since March 2020, with a 21.6% increase in mining investment from January to November 2021 compared to the same period in 2020. The top five mining companies, that led investments were Anglo-American Quellaveco, Antamina, Southern Peru, Chinalco, and Las Bambas.

The departments that benefited the most from the investments were Moquegua, Áncash, and Ica. Mineral production has also increased during the same period, with the production of iron, tin, silver, zinc, lead, gold, copper, and molybdenum. In addition, the mining sector employed 246,641 people in November 2021, which represents an increase of 23.3% compared to the same period of the previous year.

Source: BCRP , OSINERGMIN

Evolution of Mining and Hydrocarbons production // In Var. %

ARTISAN SECTOR

The gross value of handicraft production in the region is equivalent to 52%. More than 20% have stopped working in crafts concerning the last social conflict. There are approximately 5,000 that not only include artisans, but also the entire production chain.

Source: Alfredo Faura. 2022 . Photography

ARTISAN SECTOR

Enterprises based on cultural assets are rarely an exclusive dedication. Typically, they are part of a family strategy of income diversification and risk minimization. But this role is not limited to only economic aspects but also:

Accessibi -

Cultural Identity

Gender approach

Innovation strategies

Capital increase in urban populations

Cost effectiveness

Ancient legacy

Mapofhandicraftsincuscocitywanchaqdistrict

Social function

Family work

Legendofartisanmarketsandtheirradiusofinfluence

Handicraft sales markets

Legendofenterprise bylineofbusiness

[ A ] Handicraft and weaving

[ B ] Gastronomy

[ C ] Agricultural products

[ D ] Livestock

[ E ] Traditional medicine

[ F ] Folklore

[ G ] Larger animals

[ H ] Small animals

[ I ] Others

The gross value of handicraft production in the region is equivalent to 52%. More than 20% have stopped working in crafts concerning the last social conflict

There are approximately 5,000 that not only include artisans, but the entire production chain.

Source: Institute of Peruvian studies

Women entrepreneurship by industry //

Responsible(%) Protagonists(%)

Entrepreneurship by line of business//

Business ventures by industry and area //

huatanay valley high Andean zone

Entrepreneurship by industry and gender //

Men Women

FISHING SECTOR

In December, fishing activity increased by 1.3 percent year-on-year. Likewise, the sector increased by 44.9 percent in 2021.

Evolution of fishing extraction // 2020-2021 // In Tons // variation %

Year 2021

Year 2020

According to the graph, in June if we compare the annual variation of 2021 concerning the previous year, an abysmal increase of 168.5% is observed for the year 2020, quite the opposite of the variation between the year 2020 and 2021, decreasing 37.6%

Another case is the month of November 2021, there was no production compared to the variation of the year 2020 with a decrease of 100%

Source: MINAM- Ministry of production

Fishing production evolution // 2020 and 2021 // variation %

Rainbow Trout extraction by department // Year 2012 - 2017 // In tons

Source: MINAM- Ministry of production

The quantity of trout extracted from natural environments by the department is shown; Said information was prepared to take as input in the Produce 2020 Statistical Yearbook. The result of this analysis shows us the trout fishing activity in six departments of Peru. For 2019, Arequipa was in first place in production, with 53.73 MT, and in second place Puno, with 30.79 MT of trout caught, being the departments that exert the greatest fishing effort on the resource, followed by Cusco and Apurímac.

ECONOMIC REGULATION

• According to what is allowed in the Land Use Index for the location of urban activities_ Ord N° 933 –MML.

• Not required for commercial use, the flats used for housing will leave the free area that requires compatible residential use (RDM - 30%).

• Up to 07 stories high will be allowed in lots located in front of parks and/or avenues with widths greater than 20ml.

• 01 parking will be required for every 50m2 of the commercial area or as the case may be by the provisions of standard A.070 Chapter IV. Article 24 of the RNE. In the case of areas resulting from the authorization process, which have public parking, parking spaces will not be required within the lot, except for those required for the area intended for residential use, which must necessarily be located within the lot.

• Predominant Uses: Facilities for special uses, institutions of the Public or Private Sector, Security

ments of the Armed Forces

• Compatible Uses: Existing State Administrative Establishments, archaeological zones,

gious Centers, Orphanages, Sports and Shows Establishments, Stadiums, Coliseums, and Zoos.

Source: Cusco Urban Parameters

ECONOMIC PROBLEMS

In Cusco, 60% of the people live directly or indirectly from tourism, or form part of that chain made up of hotels, restaurants, farmers, tour guides, carriers, artisans, and others, which is “totally harmed”. The imperial city stops receiving in tourism only S/.3 million per day and S/.7 million for different economic activities related to the tourism production chain

CONFLICT SOCIAL PROBLEMS PROTESTANDBLOCKADES.

THEY CAUSED LAYOFFS AND THE CLOSING OF ESTABLISHMENTS AS A CONSEQUENCE

ATTHE MOMENT

Tourism represents

2.5% OF GDP

BEFORE THE SOCIAL CONFLICT AND THE PANDEMIC TOURISM REPRESENTS 3.9% OF GDP

PBI

Source: INEI-National Institute of Statistics and Informatics

REFERENCES

INTRODUCTION

• https://www.france24.com/es/programas/econom%C3%ADa/20221210-la-econom%C3%ADa-de-per%C3%BA-se-ha-blindado-ante-la-inestabilidad-pol%C3%ADtica-c%C3%B3mo-lo-ha-logrado

• https://www.bbc.com/mundo/noticias-america-latina-63630153

• https://gestion.pe/noticias/economia-peruana/?ref=gesr

HANDICRAFT

• https://repositorio.iep.org.pe/bitstream/handle/IEP/706/hernandez_puestaenvalor.pdf;jsessionid=0ED3EC67BA36CFF2AC3BC768525D0716?sequence=2

• Plan de desarrollo urbano cusco al 2023

• https://es.dreamstime.com/icono-de-concepto-conflictos-sociales-y-disputas-ilustraci%C3%B3n-l%C3%ADnea-delgada-la-idea-comportamiento-antisocial-agresi%C3%B3n-derechos-image180306609

• https://iep.org.pe/actividades/mesa-verde-presentacion-del-mapa-colaborativo-e-interactivo-de-emprendimientos-con-identidad-cultural-en-valle-sur-ocongate-cuzco/

MINING

• https://www.bcrp.gob.pe/docs/Sucursales/Cusco/2021/presentacion-cusco-12-2021.pdf

• https://www.osinergmin.gob.pe/seccion/centro_documental/Institucional/Estudios_Economicos/Libros/Osinergmin-Industria-Mineria-Peru-20anios.pdf

FISHING

• https://www.produce.gob.pe/documentos/estadisticas/anuarios/anuario-estadistico-pesca-2015.pdf

• https://www.produce.gob.pe/documentos/pesca/dgsp/publicaciones/diagostico-pesquero/Tomo-3.pdf

• https://bioseguridad.minam.gob.pe/wp-content/uploads/2021/07/libro_ldb_trucha.pdf

AGRICULTURE

• https://www.artstation.com/artwork/Ka6wvy

• https://www.machupicchucuscotours.com/es/blog/agricultura-andina.php

• http://historia3pensamiento4.blogspot.com/2017/05/economia-de-subsistencia-andina.html

• https://www.midagri.gob.pe/portal/download/pdf/conocenos/transparencia/planes_estrategicos_regionales/ cusco.pdf