recommend reading the interesting article the last gasp of Velasco, published a few days ago for the excellent journalist Jaime de Althaus in the newspaper El Comercio, and taking into account the fundamental importance of the choice of April 10, the following is a brief comment about the current political situation, focusing, however, in the economic aspect, we consider more than enough to express a clear vision and decisive.
The current policy free market, started in the 90's, and kept unchanged since then, must continue. Why? Because it has allowed Peru:
- Become one of the countries with higher economic growth worldwide. China is one of the few countries in the world beyond us. That growth will not only be explained by the high prices of our exports (which has only occurred in recent years), but mainly by strong growth in domestic demand, namely the increased use of people and increased investment in companies, with the help of restoring confidence and improving the outlook. Is it a growth
limited to high-income sectors? No. It's a growth that reaches the entire population, as evidenced by the explosion in the number of phones, the massive sales of televisions, computers or DVD, on record sales of cars, motorcycles and taximotos, urban development is seen in inner cities, the growing attendance at the stadiums, theaters and entertainment centers in the best equipment in the warehouses and other small neighborhood businesses, restaurants increasingly crowded, in the shiny malls and crowded poor neighborhoods of Lima or provinces, increasing sales of clothing, in increasing assistance to beauty salons and gyms, etc..
- Having a balanced public budget, deficits without causing inflation. From the 90, Peru only spend what you have, because "little machine" of BCR stopped working forever. But now that the state collects more than before (not by the presence of higher taxes, but by the strong growth of the economy), has much more ability to make social spending or to implement countercyclical policies against external shocks. The current state, although much smaller, is much more efficient and powerful as inflationary, bureaucratic and state debt before, the owner of many inefficient public enterprises and collapsed for its abysmal management. The state today has no deficits, has reduced its external debt to a minimum, yet have the resources to build (without incurring imbalances) monumental works as the Lima Metro or the new National Stadium, and to pave hundreds of kilometers of roads, extending electricity coverage, build water and sewage networks, delivering hundreds of thousands of computers to poor children, etc..
- Having one of the lowest inflation in the world. This is a great achievement, considering how inflation affects the most poor. When the country followed the statist policies, populists and unorthodox that one candidate now incredibly raises reset, sank into the swamp of hyperinflation, the hiperrecesión and external indebtedness, and all massively impoverished Peruvians.
- Having one of the world's most stable currencies. New Sun still maintains the same parity against the dollar than twelve years ago. That has improved the purchasing power of Peruvians in dollar terms, and allows those with long-term debt in that currency (derived from mortgage loans or investment products) can be calm, without fear eventual devaluation. It has also reduced dollarization, allowing the sun to return to the limelight.
- Keep records of foreign direct investment, ie investment that is intended for long-term productive activities. That is, among other things, a Constitution (1993) and legislation that, while clearly establishing the rules and submission to the Peruvian law, foreign investment provide all guarantees and facilities operate quietly in the country, competing on an equal footing with domestic investment.
- achieved record levels of international reserves, which now exceed U.S. $ 44 billion, to which Peru is today one of the countries of the world best reserves / GDP. The abundant liquidity in foreign currency is the best protection that the country has to face any international financial crisis.
- Forging a much more competitive business sector. Thanks to legislation that promotes competition in all markets, our entrepreneurs will not only successfully compete against thousands of imported products, but, having been strengthened by this new attitude, have lost their fear and begin to dabble heavily in other countries, not only exporting their products, but even building factories. So groups demonstrated Ajegroup, Gloria, Brescia or Romero, who are already present in many Latin American countries and even in some of Asia. This is done without any privileges granted by the government, just at the point of increasing efficiency, productivity and competitiveness, generated by the model of openness.
- Create a strong domestic demand. In the twenty years that it has applied the free market model, the Peruvian GDP has expanded five times, growing from U.S. $ 29 billion in 1990 to U.S. $ 153 billion today. Given that 97% of the GDP is made up of domestic demand (consumption people, business and government and investment companies) can get an idea of \u200b\u200bhow they grew this, which is much larger today than before. This is demonstrated by the fact that today our economy is growing almost 9% per year, with the enormous dynamism of the industry (which are not weakened with the model of openness, as posed by heterodox and protectionism, but rather strengthened) construction (the most dynamic sector of all), trade and services, and despite the decline in traditional export sectors such as fishing and mining.
- Having a pension fund of over U.S. $ 30 billion, which guarantee decent pensions for more than four million future pensioners. This fund is invested professionally by the AFP in the most cost-effective financing options, in order to consistently increase the amount. Furthermore, by its sheer size, is a fundamental source of long-term resources for the economy.
- have managed to invest in private investment of billions of dollars in the construction of economic infrastructure. Through privatizations and concessions, and with no or minimal cost by the State, Peru has built in recent years the South Pier of Callao, roads (including including the Inter-Oceanic), highways (such as that already goes to Chincha and Ica arrive soon, or that come to Trujillo), power plants, transmission lines and pipelines, as well as significantly improved Jorge Chavez Airport and several provinces and has dramatically expanded its coverage of telephony, Internet and television (the latter an accelerated process of digitalization).
And soon it will expand the South Pier and North Pier will be built of Callao, and the second runway at Jorge Chavez airport in Cusco Chincheros and Pisco, the new container quay of Paita (with cranes porch), the southern Andean pipeline, the new port of Yurimaguas (connection point for the road-river North Oceanic), the new expressway called the Yellow Line Lima, Ica and petrochemicals in Ilo (that will give value added to our natural gas and venture into the production of plastics, etc.).
- have restored the long-term loans. With macroeconomic stability, as well as the abundant international credit that is accessed by our country, businesses and individuals now have full-term credits (up to thirty years), and lower interest rates, either to finance productive investment or to build or purchase homes.
- have returned to turn Peru into a major agricultural exporter, but now with a more diversified portfolio. Thanks to the massive private investment in Chavimochic or Ica valleys or the coast, Peru is now a major world producer of asparagus, avocados, paprika, piquillo peppers, mangoes and artichokes. And with the possibilities opened up the brand-new TLC, is expected to occur likewise with citrus, grapes and sugar cane ethanol. In addition, under the privatization process, our country managed to recover its sugar sector, which now serves efficiently market and re-export. The coffee sector has also begun to spring up with record exports.
- have significantly reduced the levels of poverty and extreme poverty. This has been possible thanks to the high growth (increasing demand of labor and thus brings new revenue to households) and government social programs (Together and others) that directly address the most vulnerable, giving money to parents, in exchange for commitments to enroll in schools for their children and vaccinating.
- Have achieved record exports. Between 1990 and 2010, these have grown tenfold, from just U.S. $ 3.300 billion to $ 35 billion. And not just the traditional rose, but also nontraditional those (such as textiles and apparel, chemicals, the iron and steel, metalworking and metal minerals) carry a level of industrialization. Unlike other countries, this result does not stem from pro-export exchange rates, subsidies or other artificial advantages, but unique competitive effort, led by the model of openness.
- have agreed to the largest markets in the world. Thanks to the Free Trade Agreement (NAFTA), Peru now has free entry, without any duty to pay, the United States, China, Canada and other countries. And very soon too freely enter the European Union, which already block successfully negotiated. That opens up tremendous prospects for growth for our exporters (both large and small), from one moment to another are remarkably expanded its market, and gives them an advantage over their competitors in countries without FTAs. This creates powerful sales boom joints backwards, since streamlines the many companies that provide inputs to exporters.
addition, the validity of these treaties is a huge incentive for large international companies are installed in our country, in order to export to these markets.
Moreover, thanks to them the Peruvian consumers and producers access to lower prices, a real modern, high technology, such as industrial machinery, vehicles of all kinds, computers, televisions, scientific instruments, etc.
- have helped improve the country's decentralization. Not only through the delivery to the regions to manage their large hydro projects (Majes Jequetepeque-Zana, Chira-Piura, Chavimochic, etc), but also through the provision of substantial resources from canon and royalties. This is allowing Cusco and Ucayali (for gas), Loreto and Piura (for oil), Moquegua, Tacna, Ancash, Arequipa, Cajamarca, Pasco, Cusco, Lima, La Libertad, Junin and Puno (by mining) Huancavelica (for electricity) and Callao (the port movement) have multi-million dollar figures for its development, what we're seeing in the building, with its own resources, paved roads, stadiums, water treatment systems , improving schools, health centers, etc. And the same will happen soon with Junin and Apurimac, where mega-projects into production as Toromocho and Las Bambas.
The increasing decentralization is also highlighting the construction, by domestic and foreign investors in large shopping centers, such as Arequipa, Trujillo, Piura, Chiclayo, Chimbote, Ica, Huancayo and Cajamarca.
- have sharply reduced the country risk and have improved our credit rating. Thanks to its good economic management, which places it as a country of strong growth and no trouble paying their debts, Peru has become one of the lowest risk levels in Latin America, and has received the Investment Grade the world's top three ratings (Standard & Poor's, Moody's and Fitch), you can access, so Therefore, to international credit without major restrictions and interest rates much lower than countries that do not enjoy an enviable position. And those favorable conditions not only enjoy the great bankers, but ordinary borrowers, as they move to the national claims of all levels.
And with the above, the massive investment comes, knowing that enters a country reliable.
- have led to a record flow of tourists. Thanks to social peace, economic stability and even better international image of Peru (underpinned by the success of the campaign to declare the wonder of the world Machu Picchu and the successful completion of two global megacumbres), last year entered the country more than two million tourists, leaving substantial income. Knowing the huge multiplier effect of this activity (because such income does not only benefit the big travel agencies or airlines, but also to vendors of souvenirs, taxis, restaurants, lodging, entertainment centers, etc.). you can get an idea of \u200b\u200bwhat it means for cities like Cusco. And the success has been replicated in other places, like Chicago (with the Museum of Sipan) and Paracas, where he has invested many million dollars in the construction of hotels and resorts.
- have made the Lima Stock Exchange in one of the most profitable in the world. This is due to the spectacular performance of our businesses, they grew up, to obtain high profits and generous dividends distributed, massively attract investors from home and abroad. It not only benefit the companies themselves, they can attract more resources for their projects, or large financial investors, but also, for example, the millions of members of the AFP, that through these institutions and invest in the stock market get high returns for their funds Pensionaries. The
above is a tight and incomplete summary of the positive effects that the free market model has had on the economic performance of Peru, not in the past five years and along a single government, but over the last twenty years and under Led by three different presidents. Successful model that should still be running, as it is proving to be quite suitable to lead our country in the fastest way, the long awaited development. It has made a major advance, but much more. Obviously, it requires some improvements to make it more efficient, but nothing else.
What the candidates currently vying for the Presidency of the Republic ensure the continuation of this successful economic policy and the above results? Of the top five, so ensure Toledo, Castañeda, Fujimori and Kuczynski. The fifth, unfortunately, does not guarantee the same, but rather a dismantling of the advanced and a return to heterodox policies, statist and protectionist demonstrably failed in our country and around the world.
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