Great movies are dreams in the guise of art. They are made by artists with the power to dream, or dreamers with the power to shape art. Are they just born, these people? Or can such things be taught?

I sought the answer last week in Soho, west London. In this ever-beguiling maze of eateries, snackeries, drinkeries and dual-variety cutteries – hairdressers and movie-editing suites – there is nothing unusual about finding a top British filmmaker, Stephen Frears, huddled with a Peruvian pupil-protégé, Josué Méndez, in a walk-up post-production nook as large as a broom cupboard.

Frears is the 66-year-old who directed My Beautiful Laundrette (1985) and The Queen (2006). Méndez is a 30-year-old from Lima who has made one festival-shown feature. And Rolex is the fairy godmother whose Mentor and Protégé Arts Initiative, now in its fifth year, twinned these two, much as other Rolex partnerings have thrust dewy-eyed youngsters upon the likes of Sir Colin Davis, David Hockney, Toni Morrison and Sir Peter Hall.

Rolex hands $50,000 to each team and tells them to get on with it. Frears and Méndez have been getting on – famously, it appears – since November when the Englishman read the Peruvian’s script after selecting him for the mentoring scheme from four shortlisted applicants.

After a 10-minute watching brief, in which I peer over four shoulders as Frears and Méndez snip away at a Lima-set party sequence on a digital editing machine, the pair break away to cross the floor – all of five feet – and share their wisdom from a sofa.

So, again, can you teach art? Or dreaming? Or cinema?

Frears says: “Abraham Polonsky [noted McCarthy-blacklisted US director] said, ‘You can only teach someone who they are.’ The only way you can learn about making films is by making them, by putting your stamp on the thing. I chose Josué because I knew he was shooting his film and that’s the point where teaching actually means something. You’ve committed yourself and you have to live with what you’ve done.”

Méndez has to live with having the footage of his $400,000 second feature, already the beneficiary of a Cannes Film Festival scriptwriting grant, scrutinised by a man with a dozen major films to his credit. Frears also teaches at Britain’s National Film School, partly (one suspects) to make up for a deprived youth. “Film schools didn’t exist when I was growing up. I learnt by working with clever people. Good writers and cinematographers. And before them, [directors] Karel [Reisz] and Lindsay [Anderson], who gave me a kind of foundation course.” For 10 years in the 1970s, when Frears should have been turning out early features, there was virtually no British cinema. “It was all Nic Roeg and Ken Russell.” And some early Ken Loaches? “Yes, but Ken sprang fully formed. The rest of us have had to toil up the hill,” says Frears, who learnt the ropes as a television director.

No film school or apprenticeship has helped Méndez in Peru. He had to go to the US, to Yale and New York University, to get his basic training. Soon after that, a praised but still largely undistributed first feature, Days of Santiago, got Méndez on the Rolex list of possibles. (Made in 2004, it’s a toughly characterised, imaginatively shot tale of a former soldier’s search for work, love and a purposeful life.) Yet Méndez says, “When I got the e-mail inviting me to apply I thought it was a spam. I thought it couldn’t be true. So I left it in my e-mail for two months.”

Coming from a country with a resource-starved cinema, it wasn’t surprising. “There is no minister of culture in Peru. There are no laws that support cinema or anything else culture-wise. In the 1990s, president-dictator [Alberto] Fujimori pretty much destroyed all cultural institutions.” Méndez put together the budget for his second feature, the one he is working on with Frears, by making co-production allies of Spain, Argentina, Germany, France and, throwing some coins in the pot, Peru.

After in-depth discussions of the script last November, Méndez and Frears met again in late June for their 10-day editing session. Frears says: “There was a 2½-hour assembly that we’ve brought down to 1½. You throw away the stuff that’s not relevant. You start to find the skeleton of the film.”

And the film is about? Méndez: “It’s about life among the upper classes in Lima.” Frears: “The problems of being young and rich in Peru. It’s terrible. It’s a dog’s life.” (Frears has a habit of interjecting deadpan drolleries.) Méndez: “I met a lot of people like this in the private high school I was at. I’m not as upper-class as the characters in the film, but I’ve known quite a few of them.” Frears was keen that Méndez try to universalise the story: “It’s a complicated society, an indigenous audience would understand things that outsiders wouldn’t.” But the mentor didn’t want to step in too heavily. Trial-and-error, he says, is a good schooling. “Everything is theoretical anyway until the shots are there. Now he’s got something precise, he can say, ‘Oh I did this but I should have done that.’ That’s why life is a succession of humiliations – there’s always a gap between what you intend and what you do. Hopefully, as you get older, the gap closes.”

Méndez shot on Super-16mm, long seen as an honourable compromise between inexpensiveness and professional acceptability. “I shot a lot of The Queen in Super-16,” Frears says. “All the bits with Blair were shot on Super-16 to distinguish him from the Queen, who was shot on 35mm. Well, Blair was only an elected politician,” he explains.

Did Méndez know Frears’s work before meeting him? How much exposure is there in Peru to international cinema? “We have a big piracy industry,” says Méndez with a grin. “Many people see films through illegal copies. But there are maybe a couple of European films that are shown in cinemas in Lima each year. Mainly it’s 99 per cent Hollywood, though The Queen has played there too.” “The Queen is a Hollywood movie,” I slip in, “now that Helen Mirren has won an Oscar.” “That’s a shocking think to say,” Frears says with mock outrage.

Peru’s own movie industry appears to belong to history. “There used to be films back in the 1930s and 1940s,” Méndez says. “That was the golden age. There were popular dramas and melodramas. It’s nearly always depended on private investment, though in the 1970s there were a lot of films made under the military dictatorship, for propaganda or entertainment.”

After that, the drought. No wonder the Rolex scheme seemed to Méndez an impossible miracle. As Frears points out, it’s also an American miracle. “It’s like people giving money to museums, it’s not really a tradition in Europe, is it?” (As if urging such a tradition to start, he bemoans the cash shortages at the British Film Institute, where he’s a board member. “The archive is rotting away for lack of money. It’s a national asset, it belongs to all of us. It’s the government’s responsibility to deal with it. It’s sheer underfunding.”)

But money is the root of all heartache in the film business. No other artistic activity requires such sackfuls. Méndez knows it’s his job to make not just the film but the sales pitch too. “It took two years to raise the money and put this project together. But it’s difficult to make films anywhere, not just in Peru. When I visited Los Angeles, I could see that to make the films I wanted to make would be really difficult. So I might as well try at home.”

If his dreams come true, where does he see himself in 10 or 20 years? “Hollywood,” says Frears with another deadpan twinkle. Méndez laughs. And will he get a credit on the new film, I ask Méndez, pointing to Frears? Méndez laughs. Frears says, “See my agent.”