In Peru there is a negative view of the role of the business community that must change because it affects economic growth, highlighted the president of the Central Reserve Bank (BCR), Julio Velarde.
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During his presentation at CADE Executives 2024, Velarde stated that in our country there is a very negative view towards entrepreneurs, when the fundamental factor for growth in a capitalist economy is them.
He stated that this attitude has spread to various layers of the population with the myth that we are rich or very rich, but that others take our wealth. He pointed out that this invention that is made, taking out of context what Antonio Raimondi said at some point, has caused the population to minimize the business community. However, he stated that it is just a myth.
He highlighted that this myth is used in elections by radical positions. He stated that Pedro Castillo repeated the same argument that others take the wealth.
For this reason, Velarde maintained that this situation must change because it affects economic growth.
“That has to be changed, I don’t know how to do it, it is a job of education, but it does affect growth, it affects perspectives. It makes radical options have a better chance of being elected,” he asserted.
Reforms
At another time, Velarde referred to the reforms that our country needs so that our economy can grow at rates greater than 5% per year.
The head of the monetary authority highlighted that among the most urgent is the improvement of education. He argued that with current levels it is impossible for us not to continue having poor people.
According to economist Elmer Cuba, only 40% of primary school students understand what they read, and only 20% of said students can solve math problems for their age.
“To grow you need economic stability, you need education,” Velarde said.
Among other reforms, he referred to politics. He said that outside the country there is a perception that the head of state can be changed or Congress closed at any time. For this reason, he indicated that care must be taken to use ‘nuclear weapons’ such as the presidential vacancy and the dissolution of Parliament.
Likewise, he mentioned that a more predictable Judiciary is required.
In the fiscal area, he highlighted that it is necessary to improve the quality of spending, given that, without this, the public investment that has been made will not bear fruit.
Velarde was against the tax cuts that have been taking place, such as the reduction of VAT for restaurants and hair salons. He said that over time this encourages mercantilism.
“It is necessary to stop the pressure we have seen in recent years from certain groups to reduce taxes in sectors such as restaurants and hair salons. This is clearly a mistake, since instead of encouraging companies to focus on reducing costs and increasing productivity, it is more profitable to allocate efforts to Congress to achieve a reduction in VAT for specific activities,” he commented.
Data
-Without reforms, the Peruvian economy would grow at a level of 3% per year, said Julio Velarde.
-The credibility of the BCR that has been earned over time prevents the institution from having to adjust its rates abruptly.
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