Peru has been promoting different types of special economic zones (SEZs) for a number of years, in an effort to support economic diversification, regional development and international trade. By 2015 there were three special entities designated as export, transformation, industry, marketing and service centres (Centros de Exportación, Transformación, Industria, Comercialización, y Servicios) and known by their Spanish acronym as CETICOS. These CETICOS were based in Ilo, Paita and Matarani. A fourth CETICOS, based in Tacna had previously had its status changed to that of a free trade zone (FTZ) and is now known as Zona Franca de Tacna or Zofratacna.

Investment Commitments

In August 2015 representatives from the country’s SEZs met in the city of Piura in the north of Peru. According to officials attending the meeting from the Ministry of Trade and Tourism, the three CETICOS at Ilo, Paita, and Matarini, together with Zofratacna had registered investment commitments totalling $200m.

They were responsible for annual exports of $43m and for imports of $140m, and between them generated more than 1800 direct employment posts. Under existing legislation the CETICOS benefit from favourable tax treatment until 2022, but government officials have recently extended this provision through to 2042, to put the CETICOS on the same time scale as Zofratacna.

At the meeting, Magali Silva, minister of foreign trade and tourism, said the government was working to align the SEZs with its long-term foreign trade strategy to 2025, known as PENX 2025. The strategy calls for export diversification and the development of a logistics platform to allow for greater participation by Peru’s regions in its overall export performance. Silva noted that Peru competes with other countries that also use FTZs to boost their exports, so it was important to promote efficiency, with a particular focus on improving the connectivity of these zones to highways, ports and airports. The government was also looking at ways to integrate the activities of the zones with the wider regional economies and the development of industrial parks.

ETICOS’ Effectiveness

There has been some debate on the effectiveness of the CETICOS. Initially established in the 1990s, some observers have argued they have fallen short of the original vision, which was to turn them into powerful industrial development poles. Instead, many CETICOS have relied on rather limited activities, such as adapting second-hand imported cars for domestic use.

One of the more prominent critics is Eduardo Ferreyros, former general manager of the private sector exporters’ lobby group, ComexPeru, who said the CETICOS have resulted in losses and consume resources that could be better used in developing competitive industrial products. As an example, he cited the fact that CETICOS Paita reported over PEN300,000 ($95,760) worth of losses in 2012, while in the same year CETICOS Matarani made only nominal profits. His view was contested, with Guillermo Cabieses, the manager of CETICOS Paita, arguing that its assets remained significant, and that CETICOS Paita was not acting as a drag on the public purse.

The debate on the profitability of the CETICOS was complicated by the fact that different reporting and accounting standards were in use. In any case, in 2013 Carlos Posada, former deputy minister of foreign trade, suggested that profitability should not be their key performance indicator: what mattered in his view were the tax and tariff benefits that they could offer to the companies that set up operations within them.

Catherine Rodríguez, general manager of CETICOS Matarani, made the point that companies need to know they can enjoy these incentives over a long time horizon: that is why she supported extending the CETICOS’ lifetime for another 20 years to 2042, to put them on an equal footing with Zofratacna. But others have suggested the development of competitive and sustainable export products must go beyond businesses that need to rely on tax and tariff breaks to make a profit. Arturo Tuesta, a partner at PwC, said “The way forward has to be to deliver quality, that is what makes you competitive – not having to rely on never-ending tax breaks.”


The CETICOS are nevertheless making efforts to develop their strategy and attract business. CETICOS Ilo, for example, is working to create an agro-industrial technology innovation centre. The plan is for the centre to look at new ways of processing and marketing local products for export, such as olives and avocados. In 2015 it was hosting 17 companies, which is close to full capacity as it has space for up to 20. It was investigating the viability of building a seawater desalination plant to meet local agricultural irrigation needs, with technical assistance from the government of Israel. CETICOS Paita, which has managed to rent 20 ha of its available 940 ha, also announced that it was re-launching in 2015. Under the terms of an agreement with the Ministry of Production and the Piura regional government, its management said in August 2015 that it was developing a new approach based on a new business model, a new urban planning proposal and a business plan. Antonio Álvarez, chairman of CETICOS Paita, said the unit would shortly have a new master plan to attract business tenants and create sustainable employment.

Diversification Of Production

During the course of 2015 it was clear that the government was considering how to reposition the SEZs within the wider context of Peru’s need to respond to the economic slowdown by diversifying its economy away from mining. Piero Ghezzi, minister of production, stressed that this was a necessary response to the fall in mining and hydrocarbons exports. There has already been significant progress on this front, particularly in agriculture and agro-industry, with Peru now ranked as the world’s second-largest exporter of artichokes, the second-largest exporter of avocados, the fifth-largest exporter of grapes and the largest exporter of organic coffee.

Speaking on a visit to the heavily mining-dependent region of Arequipa in October 2015, Ghezzi said it was necessary for the region to diversify into technology, textiles, leather goods and footwear, along with agro-industry, including the Majes Siguas II initiative, a project to irrigate over 38,000 ha of land along the Arequipa coast. Ghezzi outlined a multi-pronged strategy that included creating an incubator for start-up businesses in cooperation with Universidad Católica San Pablo, and taking advantage of CETICOS Matarani. He noted that the government had a fund worth PEN1.5bn ($478.8m) to support start-ups and to train business people and students.

In another attempt to accelerate new business, the Ministry of Production set up sector-specific public-private task forces to identify and remove obstacles to development. One of the first was a task force on the forestry and wood products sector that, according to the minister, had by March 2015 been able to identify 35 problem areas and resolve 20 of them. A task force on the aquaculture industry had begun its sessions and identified 24 obstacles to work on; there were also plans to set up a creative industries task force.

Industrial Parks

Meanwhile, the Ministry of Production has introduced a new legal framework for industrial parks. A decree in 2015 sets out a National System of Industrial Parks. Ghezzi has said the aim is to promote industrial clusters that will achieve high levels of productivity and technological innovation, and are capable of achieving sustainable growth in balance with their local environment. The decree envisages two main types of industrial parks: technological parks on the one hand and “industrial parks of national relevance” on the other.

The ministry is working to develop two parks – the Parque Industrial Ancón in Lima and the Parque Industrial la Libertad in the locality of the same name. Unlike the CETICOS, the parks are not necessarily directly trade focused, nor do they offer tax breaks.

However, there will be benefits: for example, companies located in an industrial park will qualify for priority consideration in the allocation of certain types of government development funds. They will also receive technical assistance in the streamlining of business processes and permits. The ministry has said that it also wants to develop industrial projects inside the existing CETICOS and Zofratacna. In CETICOS Ilo, for example, the ministry has proposed a metal-working cluster based around a smelter. The Parque Industrial Ancón project in Lima involves an area of 1338 ha. Ghezzi said that the aim was to invite private sector involvement in the park, with bids for a contract to develop 420 ha in the initial stage, which is expected to be put to tender sometime in 2016. The Parque Industrial la Libertad will be focused on developing a cluster of leather product processing industries.