“Peru’s macroeconomic strength, its stability, the solidity of its economic institutions, have allowed us to have one of the most stable economies in Latin America (…). These macroeconomic fundamentals have been key to facing various adverse shocks and ensuring the rapid recovery of the Peruvian economy in the post-pandemic period,” said the president of the Council of Ministers, Betssy Chávez, in her speech at the plenary session that debated the 2023 budget. What is the strength to which you refer? The former Minister of Economy and Finance Luis Miguel Castilla affirms that the 1993 Constitution, to which the government, the premier, Peru Libre, among other allies of the Executive, want to change.
Castilla stressed that the autonomy of the BCR was established in the Magna Carta, which it did not have before. “Before, it did not have this autonomy and it financed government deficits through inorganic issuance. That produced hyperinflation,” he assured.
He also highlighted a factor that has allowed the stability of which the head of the PCM speaks: Congress has no spending initiative, according to article 79 of the Constitution. For the former head of the MEF, it should also be noted that this Constitution establishes the “economic freedoms that have been fundamental for Peru to grow.”
“In addition, it establishes something very important that has caused investment to skyrocket in the country, foreign direct investment, and it is the constitutional protection of contracts and equality in national and foreign investment (articles 62 and 63),” he said. .
He explained from 1992 to 2021 the foreign disbursement in Peru “has increased 75 times.” Although this also responds to other measures and rules, Luis Miguel Castilla assured that one of the advantages is that the economic chapter of the Magna Carta has been respected.
“The 1993 Constitution marks a before and after in the economic management of the country. Without this Constitution, our level of indebtedness would probably be higher; we would not have access to cheap financing. In addition, it explains the reduction of poverty and inequality. What has failed is public management, ”he added.
REACTIVATION
Meanwhile, the former Vice Minister of Economy and current main professor of Economics at the Universidad del Pacífico (UP), Carlos Casas, highlighted that the fact that there is free competition, freedom of contracting and that there is no difference between national and foreign investment It has generated a reactivation of the economy for approximately 30 years.
He mentioned that article 60 of the Magna Carta states that “only by express law, the State can carry out subsidiarily business activity, directly or indirectly.” For the former official, this is important because it has been shown that “we are not prepared to have state companies” as a result of mismanagement.
“Due to the bad experience, this would not work. We have the case of Petroperú to realize that, ”he commented.
DATA
-In 1992, the GDP amounted to US$35.970 million; by 2021, the figure amounted to US$223.2 billion, according to World Bank data.
-Article 63 of the Constitution states that national and foreign investment are subject to the same conditions.
