Casinos, new restaurants and hotels are sprouting up in Peru's capital, Lima. Far way in small jungle towns along the eastern side of the Andes, it is also "boom time".
By Dan Collyns
BBC News, Tingo Maria
Eduardo Ticeran is one of Peru's most radical coca farmer leaders
The money is flowing thanks partly to the US-funded war on drugs in neighbouring Colombia where President Alvaro Uribe's hardline stance has made cocaine production more difficult.
Drug cartels are increasingly switching to Peru, where, according to the United Nations Office on Drugs and Crime, potential cocaine production rose by 8% from 2005 to 2006 despite the intensified anti-drug strategy by the Peruvian authorities.
This is the highest figures since 1998, although only half of the peak of production in Peru in 1992.
The price of a bag of coca leaves, cocaine's raw ingredient, has risen by more than a third since the beginning of the decade.
The value of a hectare of coca - as the plants are now grown more densely together - has risen even more steeply and is worth almost 20 times as much.
It is not surprising that the coca farmers' or "cocaleros"movement has radicalised in the face of coca eradication efforts with more roadblocks and strikes.
Eradication in Peru is complicated, not least because the coca leaf is important in Andean culture.
As their Inca ancestors did, people in the Andes use it to alleviate hunger and tiredness, for medicinal purposes and in religious rituals.
The government allows a certain amount of coca to be grown legally, but that only accounts for around 10%.
On the eastern side of Peru's Andes, as the terrain drops into the Amazon basin, the conditions for growing coca are ideal.
In Huanuco, which straddles the mountains and the jungle, illegal cocaine production accounts for 58% of agricultural income.
In one of its lush jungle valleys, the Monzon, just east of the town of Tingo Maria, there is a higher concentration of coca grown than anywhere else in Peru.
The valley is a "no-go" zone for the police, in large part due to an alliance formed between the community and the Shining Path guerrillas who provide protection for the population in return for a share in the profits of the drug trade.
On the face of it, Cachicoto, one of the main towns in the Monzon Valley, is much like any other in the area, with a couple of places to eat, a butcher, a baker and all the normal signs of commercial activity.
But the baker, Eduardo Ticeran, is also president of the coca producers of Monzon.
The 40-year-old father of four girls is considered one of the most radical cocalero leaders in Peru.
"Coca or death"
He is best known for leading thousands of coca farmers under the slogan "coca or death" in a three-day roadblock of the highway from Lima into the centre of the country.
"We would prefer to die defending the coca than go to the cities to beg, or become thieves, for our daughters to become prostitutes. We will not destroy our cultural identity as Andean people," he said.
The Peruvian government, keen to seal a free trade agreement with the US, recently vowed to reinforce its program of forced eradication of coca crops.
"This stance is forcing citizens to embrace violence to defend their crops," Mr Ticeran said.
"We have sown coffee, rice, maize and palms, but they don't have a market. So we've had to abandon those crops and grow one from which we can survive.
"Just look at where we live, at what we eat, we're not rich!"
Showing some coca-based products such as sweets, soap and pasta, Mr Ticeran says if the coca leaf were legal internationally, they would have a legitimate market for their crop.
But it is the illegal trade in cocaine which makes growing the coca leaf so attractive.
Some farmers have even turned to producing the basic cocaine paste, which is later refined elsewhere.
In June, Peruvian police intercepted 10 tons of household chemicals bound for the Monzon Valley.
The products such as strong bleach, containing hydrochloric or sulphuric acid, acetone and kerosene, are all used to extract cocaine base from the coca leaves.
It is hard to see coca farmers abandoning production
Gomer Meza, who owns one and-a-half hectares of coca plants, freely admits more than half of what he grows will go to drug-traffickers.
"We will finish with drug-traffickers when there's a decent agrarian policy. But there's no state presence here, so we have to look after ourselves.
"Here we are forgotten by the government, that's the sad reality," he said.
"They want us to eradicate the coca and then introduce alternative crops. But how can a farmer give up his daily bread, without anything in return? Give us the alternatives first, then maybe we will give up the coca."
The money earned from the illegal cocaine trade has transformed the economy and the politics of this region in the centre of Peru.
Not only have several cocalero leaders been elected to Peru's parliament but the drug economy is now exceeding the real one.
Economist Dennis Pereyra has calculated that cocaine production accounts for almost half the income in the Huanuco region.
Coca can be harvested four times a year and one hectare can make a profit of up to $7,000 (£3,435).
"The illegal economy is so profitable that it is extremely difficult for a small farmer to give it up," he said.
"But, let's be clear, most of the coca field owners in Monzon and other valleys have nice houses in the towns and cities.
"Those that live on the farms are the workers. They are the last cog in the wheel."
UN figures show illegal coca growth has increased by 60,000 to 70,000 hectares in the last few years.
"if this trend continues, Peru could see a 'Colombianisation' of the production of drugs," said Mr Pereyra.
And more coca production could mean a rise in attacks by Shining Path guerrillas.
"Narco-terrorism", a reality for many Colombians, could soon become a factor in the lives of some Peruvians.