Blazing a trail of conquest from Cuzco to the Peruvian south coast, the Incan emperor Mayta Capac is said to have passed through a fertile green valley, irrigated by the river Chili, in the shadow of the volcano El Misti. Several of his generals were so enchanted by the valley’s crystal blue skies and sweet air, that the Inca told them “Ari-quepay”, Quechua for “Ok, stay here”.

Such is the most popular account of the origin of Arequipa, which has grown to be Peru’s second city since being “re-founded” (and mispronounced) by the Spanish in 1540. I like this legend, because I fell in love in a similar way to the Incan generals. Travelling north from Chile, I knew little about the city before arriving, but was bowled over by its natural beauty and the charm of its people. Although Arequipa is now the sprawling home to 1.2 million inhabitants, its dramatic setting between the coastal desert and the Andes still dominates. The perfect cone of El Misti (5,825 metres) hovers above the city, its companion Chachani (6,075 metres) forms a triptych of snowy peaks to the north, and to the east the Picchu Picchu range completes the ring of mountains.

Weathering the region’s frequent earthquakes, the colonial city is largely intact, and was declared a World Heritage Site in 2000. Arequipa’s nickname of the “White City” comes from the use of the chalky volcanic stone sillar to construct most of the grand baroque buildings in the historic centre. Cobblestone streets, elegant wrought iron and plazas shaded by purple-blossomed jacaranda trees add to the romantic ambience.

Originally I stopped here to go trekking and see condors in the nearby Colca Canyon. Later I was talked into attempting the non-technical summit of Chachani, which can be climbed by anyone who can handle the altitude. By the time the trekking and climbing operators asked me to do some translation and website development for them, I’d met a girl, was enjoying the city’s welcoming vibe, and was looking for an excuse to stay.

So I ended up working with Hugo and Lizbeth in their “Incaventura” adventure tour agency, overhauling their website and selling adventures to other travellers.

I was struck by the friendliness and curiosity of people I met in bars, cafes shops and taxis. Where was I from, they wanted to know, was it hot or cold, what was the minimum wage and (only half-jokingly) how could they immigrate? Not many people have any idea where New Zealand is - a lot guess “somewhere in Europe?” - but just about everyone’s heard of it. “Oh yes” they say. “A lot of ganaderia (sheep and cattle farming), no?” It seems that the humble dairy cow, as seen on the Anchor milk packet, is New Zealand’s strongest ambassador in this part of the world.

Arequipeños are fiercely proud of their regional identity, and other Peruvians sometimes joke that you need a passport to get into the “Independent Republic of Arequipa”. Locals like to think of their city as the exact opposite of dirty, chaotic, corrupt Lima. It is considered an oasis of moderation, “neither too big nor too small, neither the coast nor the sierra”.

It’s true that the Arequipeño character seems to find a happy medium between Latin brashness and Andean reserve. And its eternally sunny skies and well-swept streets seem a world away from the mad sprawl of Lima.

But physical beauty and surface tranquillity can’t mask the problems which plague Peru as a whole. Amidst the cobblestones and pretty craft shops selling alpaca sweaters, life is very hard for many people. Unemployment is high, costs are rising, and even those who have jobs often find it hard to make ends meet. Beggars are relatively few, but it’s common to see children as young as five or six wandering the streets selling sweets, while older boys graduate to shining shoes and adults eke out a living selling whatever they can.

Or driving taxis. There are about 25 for every private car in Arequipa, and the Korean-made ”Tico” hatchbacks buzz round the streets like swarming bees. You almost never have to wait for a taxi, but competition is fierce, and drivers hardly earn more than survival wages. Transport workers are at the forefront of the frequent marches, strikes, and occasional Bolivian-style roadblocks which protest against rising petrol prices, job losses, foreign ownership or perceived government corruption and incompetence.

Despite their difficulties, people throw themselves into festivities whenever possible, and if there’s no protest organised, you’re likely to see a parade with waving banners celebrating a saint’s feast day, or the anniversary of a school. Arequipa’s anniversary celebrations in August are a riotous pageant, with a day-long parade or corso featuring endless floats, traditional costumes and dances.

And people here certainly know how to party, drinking and dancing till dawn to an eclectic mix of rock, pop, salsa, merengue, cumbia and uniquely Peruvian styles such as chicha (a mix of Latin cumbia rhythms and plaintive Andean melodies). An Arequipan barbeque is an epic experience. Hosts normally put aside enough food and beer for two days, so that after a marathon eating, drinking and dancing session on say, Saturday, everyone comes back on Sunday, dazed and bloated, to work their way through the leftovers.

During a party, the Peruvian custom is for everyone to drink from the same glass and bottle, which are passed around from one person to the next. I was introduced to this practice during a barbeque at my girlfriend’s place. Assuming that the bottle and glass handed to me were for my own consumption, I got a fright a few minutes later when someone called out “Qué vieja tiene la botella!” (“What old lady’s got the bottle!”) The old lady was me, and I learnt my lesson. But Paola’s uncle loves teasing me, and now whenever I’m passed the beer he yells “What old lady’s got the bottle!”.

In between fiestas, you often find that infrastructure doesn’t work, people turn up two hours late to meet you or forget/neglect to do what you ask, and the bureaucracy can be impenetrable. The longer I spend here, trying to help develop the huge potential of the tourist industry, the more the frustrations, difficulties and nonsensical contradictions of Peru become apparent. But people’s warmth and openness, and the endlessly stimulating tapestry of daily events, help make up for the hassles. Whatever else it might be, life in Arequipa is seldom boring.