President Martín Vizcarra Cornejo: Viewpoint

Viewpoint: President Martín Vizcarra Cornejo

When we took power in 2018 the country’s economic situation was far from ideal. In addition to sluggish growth rates, the country was going through a period of high political polarisation that generated an atmosphere of uncertainty, which was reflected in declines of both growth and investment.

In 2017, for the first time in this millennium, poverty increased in Peru. This is an indicator that should worry us all. We cannot remain indifferent to this situation, and it is our responsibility in government to reverse this trend. Against this unwelcome surge, this government has implemented a series of measures to rebalance the country’s direction. These actions seek to put in place policy pillars that will allow for a period of sustained economic growth, enhanced public and private investment, and higher incomes for all households.

The first results indicate that our economy has started to consolidate its growth rate. Today, we can have confidence that we will achieve growth of over 4% in 2019, continuing a trend observed the year before, when growth was close to 4%, and marking a stark contrast with 2017, when the economy grew by only 2.5%.

In the coming months we will build more roads to facilitate the transportation of people, products and merchandise; modern schools, where our children will receive high-quality education; health centres with adequate infrastructure, where patients will be treated without needing to wait in long lines; and irrigation systems that will expand the areas available for cultivation.

We began this mandate in a very difficult situation. However, within a short time we started to lay the foundations necessary to reactivate the economy and to promote equitable and sustainable development. After a period of uncertainty, it was essential to guarantee a stable political and social environment as well.

Competitiveness is key to guaranteeing Peru’s progress and development, and we need to project it going forwards. I proposed to our Parliament an all-party consensus to make competitiveness a national objective. We also published the National Competitiveness and Productivity Policy, and we are seeking to articulate forms of public and private intervention on these issues.

Thanks to the special legislative powers written to promote productivity and competitiveness, we intend to promote the development of micro- and small businesses by improving the system of state purchases, improving product quality, reducing the costs of financing and promoting labour formalisation.

At the fiscal level, the national deficit was reduced by increasing public revenues, which has made space to continue investing in the state. Responsible and prudent management of our public finances has helped Peru to become the only country in the region to maintain a stable outlook in its credit rating with all three of Standard & Poor’s, Moody’s and Fitch.

Economic growth will not happen by creating new taxes and increasing the fiscal burden on those who have less, but through the dynamism of public and private investment, political and social stability, greater formalisation, and honest and transparent work. We have returned to a stable growth path, due in part to the private sector’s confidence in our government. A clear example of this was Anglo American’s $5.3bn investment in the Quellaveco copper project in 2018. This government has used all these measures to generate more and better employment, expand job opportunities for young people, resolve labour conflicts and formalise both our companies and the labour market.

Our government firmly believes that the path to achieve consensus is dialogue. For this reason, employers and workers have urged us to reinstate the National Council of Labour and Employment Promotion to bring together business and trade union associations. Reactivating this important space for consultation and strengthening the institutional framework for social-labour relations at the national level would help to maintain a fluid dialogue, generate confidence and follow up on the social commitments that have been made.