The Hidden Treasure on the Peruvian Amazonia : Economic Complexity Analysis and Sustainable Opportunities to Productive Diversification

Loreto is a place of contrasts. Located on the western flank of the Amazon jungle, it is by far Peru’s largest state in terms of size, but also among those with the lowest population density. Its capital, the city of Iquitos, sits on the western bank of the Amazon River, surrounded by tributaries Nanay and Itaya. It is closer to the Brazilian and Colombian borders than it is to the capitals of its nearest Peruvian neighbor states, San Martín and Ucayali. Iquitos can only be accessed by plane or riverboat, making it one of the largest cities in the world to lack road access. Despite boasting an important endowment of natural resources which has attracted many visitors and adventurers over the years, Loreto remains one of Peru’s poorest states, and has some of the worst social, health and child malnutrition indicators in the country.The Growth Lab at Harvard University, with funding provided by the Gordon and Betty Moore Foundation, has undertaken this investigation with the aim of identifying the existing productive capacities in Loreto, as well as the economic activities with potential to drive the structural transformation of its economy. This paper is part of a broader investigation – Promoting Sustainable Economic Growth and Structural Transformation in the Amazon Region of Loreto, Peru – which seeks to contribute with context-specific inputs for the development of national and sub-national public policies that promote productive development and prosperity in this Peruvian state.In addition to its exceptional biodiversity, the Peruvian Amazon provides important ecosystemic services to Loreto, to Peru, and the rest of the world. The inputs that we take into account throughout this research engagement must therefore generate policy recommendations that are consistent with the need to preserve the region’s environmental equilibrium. In fact, our research seeks to help overcome the tradeoff between environmental sustainability and economic development that is so prevalent in present-day discussions