lunes, 30 de marzo de 2015

lunes, marzo 30, 2015
The Americas

Peru Is Chavismo’s Next American Target

Corruption scandals give the left an opening in the 2016 presidential election.

By Mary Anastasia O’Grady

March 29, 2015 5:02 p.m. ET 
Lima, Peru


For the citizens of a nation that boasts one of the world’s most spectacular long-run growth spurts since the 1990s, Peruvians are amazingly short on confidence. This country has so far repelled the authoritarian populism that has swept the South American continent since Hugo Chávez came to power in Venezuela in 1999. Its reward has been an average annual economic expansion of 5.1% for 15 years through 2014—including only 1% in 2009, when global growth collapsed, and a mediocre performance last year of just 2.4%.


                                            Peru's President Ollanta Humala Photo: Reuters 
 
              
Fast growth has produced a vibrant consumer class that is entrepreneurial and creative. Shopping malls, modern supermarkets and pharmacies now span this city, which is also marked by shiny office towers and small businesses. Demand for private-school education among aspirational middle-class parents is soaring as they reject the failing government system.

Credit has been expanding quickly yet with commodity prices falling and the global economy slowing, growth may not reach 4% this year. That’s too low to meet rising expectations.

Peruvians I talked to are worried that in the next presidential election set for April 2016, a fickle electorate will give in to populism.

Complicating the matter for anyone associated with the establishment are corruption allegations involving President Ollanta Humala’s wife and a former Humala campaign chief.

Local supporters of chavismo, who believe Peru needs a strongman, will make the spurious claim that corruption and the market economy are somehow linked.

All of this means that if the market model is to be preserved, its advocates will need to vigorously defend its moral legitimacy over the next year.

That Peru hasn’t already fallen prey to the nationalism and populism launched by Chávez—thus following some pied piper of its own off a cliff—is best explained by the structural reforms that generated the strong growth. The country has done a reasonably good job of diversifying its exports since 1990. That’s when it began to dismantle a punishing system of import tariffs and quotas, and ended a hyperinflation that reached an annualized 20,000%.
 
When Mr. Humala ran for office in 2011 he campaigned on a hard-left nationalist, socialist platform. He moderated his message when he faced a runoff against Keiko Fujimori, the daughter of former president Alberto Fujimori. But once he was in power his base expected him to increase the state’s role in the economy and to consolidate power in the spirit of Venezuela’s Bolivarian revolution.

He has done neither, most likely because he knew that going backward on reform would hit his own constituents the hardest. His government has been fiscally conservative, inflation is low, and property rights have been largely respected. The Pacific Alliance, a new trade pact with Colombia, Mexico and Chile is opening markets further.

On a visit to the Journal’s New York offices earlier this month, Peru’s ambassador to the U.S., Luis Miguel Castilla, told me that while mining still makes up a large share of total exports, openness to imports has made the country globally competitive in the export of coffee, fish meal, fish oil and nontraditional agriculture products like asparagus, artichokes and grapes. Today Peru exports footwear, textiles, ceramics, chemicals and liquid natural gas.

The former finance minister also noted that foreign direct investment to Peru increased by a factor of 4.8 between 2004 and 2014, and exports increased 3.1 times. Peruvian gross domestic product almost doubled during those years, and the poverty rate dropped to 24% from 59%.

Still, the downturn in commodity prices is eating into growth and the slowdown that began last year continues. Market forecasts for GDP growth are in the 3% range for 2015. Peru’s economy is performing far better than most in the region, but lackluster is not what Peruvians have come to expect.

The obvious answer to this lethargy is more aggressive trade opening on key products like sugar and corn, more tax cutting and deregulation. But Mr. Humala’s popularity is sagging and he is unlikely to do anything bold. Meanwhile, opponents of economic freedom will turn slower growth into opportunity by linking stagnant incomes in the market economy and corruption.

U.S. readers will understand how this could happen if they think back about how a community organizer from Chicago with less than one term in the U.S Senate used the 2008 housing bust to tap into resentment against crony capitalism and drive an anti-market agenda that has undermined U.S. economic freedom and growth.

Peru’s governing institutions are far more fragile than the U.S.’s. One can envision a Peruvian version of Obamamania if there is a sense that the system is rigged. It won’t take much for a clever demagogue to generate a frenzy of condemnation toward representative government.

It doesn’t have to happen. But to avoid it Peruvians have to counter the claims of the same despotic ideology that has ruined so many of its neighbors. The facts are on their side.

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