Pedro Castillo’s Legacy of Poverty | David Dusta | economy

The recent release of INEI data indicating that poverty in Peru will increase to 27.5% by 2022 is the sad result of using a government plan that failed from the start. In 2022, it was still difficult to resume post-pandemic levels of activity and global inflation evaporated Peruvians’ pockets. Shrinking potential for strong growth and job creation. More than 600,000 Peruvians will increase the level of poverty in 2022 because of a president who says he cares about the poor.

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The problem we have from now is that if the annual projection to 2023 continues at the current meager pace of close to 2.0% each time – it will take more than two decades to recover to the poverty rate we had before Covid-19. chapter. Politically, this is very dangerous because under these circumstances social conditions are more likely to affect the conditions of governance.

Having said the above, one need only check the economic literature which shows compelling evidence of the role of productivity-based economic growth in reducing poverty. In the Peruvian case, it suffices to recall that between 2004 and 2014 the steep decline in the poverty rate in Peru was almost 40 percentage points from levels bordering on 60%. Back then, the economy used to grow at around 4.0% – 5.0%. Figures that seem impossible today.

The problem with the decline in growth is that more than a decade on, we have begun to observe a worrying turn in public policy decisions, paying more attention to redistributive measures – which may be good – but setting aside needed pro-competitive reforms. The country must continue to grow. Thus, we have been living long enough to see reform fatigue, growing political instability, epidemics, and Pedro Castillo, the crowning disaster.

Today we have a new government, unfortunately with major weaknesses: no political party supports it; With much less popularity; campaigning against them abroad with a furious attack on local left-wing parties and regional governments with similar political views; The legacy of a bureaucracy in ruins that needs to be rearmed; A misguided Congress that can turn the country upside down anytime. Of course, the rise of a weak productive machinery and increasing poverty.

President Polwart’s government has been nothing short of a 180-degree turn from his predecessor’s policies. To do this, it is not enough to repeat your interest in giving confidence to a private investment, but propose concrete measures that will allow you to remove the obstacles that prevent its rapid deployment. With a view to increasing investment commitment, let’s remember that one of the sectors that today has significant sensitivity to these policies is the mining sector, which was one of the main victims of Castillo’s policy. If this government does not take responsibility for this urgent need, we will be left with a country where discontent will not only lead to repeated mistakes, but worse.