Pedro Castillo: pending in economic matters after the first year of Government

Ad portas to fulfill his first year in charge of the country, the president’s speech peter castle to redirect the economy has not been without promises that fell on deaf ears or were completely forgotten.

Stop the monopolies

In his message for the bicentennial of independence, Castillo Terrones emphasized that his management “will curb the abuses of monopolies that charge high sums for basic goods and services, such as domestic gas and medicines.”

In this line, the Executive presented to Congress a fourth constitutional reform to prohibit monopolies, oligopolies and price agreements, as well as the abuse of dominant positions in the market in favor of free competition.

However, specialists such as the economist José Tavara, explained to La República that the initiative has formulation errors, since the current legislation already pursues collusion and abuse of the dominant position.

“I think the law is poorly focused and misguided; what should be done is to strengthen Indecopi in line with what is suggested by the OECD”, he recommended.

Banco de la Nación competing with the private

The president pointed out that the Banco de la Nación “must be able to help citizens with all available services” based on reasonable utility rates to compete in the private market “but without usury.”

All this was no more than a mere statement. Over the months, it was from the Consumer Defense Commission that a project was promoted so that the BN grants loans from S/ 500 to S/ 60,000 to micro and small entrepreneurs, and with rates lower than those of the market: of between 10% and 45% the current market oscillates between 15% and 90%. To date, this initiative remains stalled in the Legislative.

pension reform

The Government of Pedro Castillo promised on several occasions prioritize pension reform, but so far there has been no progress. After almost a year of mandate, it was only on July 10 that the Multisectoral Commission was created to prepare technical reports that contain an evaluation of the Peruvian pension system, as well as a regulatory proposal to create the new pension system.

This occurs in a context in which AFP affiliates show their dissatisfaction with the losses of their individual funds, due to the negative profitability of these investments, which have been in decline for seven months now. In addition, a new withdrawal of funds is underway, after the enactment of Law 31478.

State food purchases

Castillo said that they will promote state purchases of quality, nutritious local products to curb hunger and malnutrition in rural and urban areas.

Recently, the president of the Valle del Chira Board of Users, Ángel Zapata, warned that large companies are still benefiting from the participation of social programs such as Qaliwarma and glasses of milk.

In this regard, the owner of Produce, George Louis Pradopointed out —in the framework of a meeting with rice producers— that “to make state purchases effective, we have to work in association”, making himself available to take accurate steps.

“Put order in mining”

Castillo stressed that clear rules were going to be implemented for the mining sector, but the social conflict and the misunderstanding of previous appointments in the Ministry of Energy and Mines (Minem) They have put the sector on the ropes.

Also, despite the request for tax powers to intensify collection in a context of mining surpluses, Congress did not give approval to this chapter. Since then, the issue has not been mentioned again on the Executive’s agenda.

Second agrarian reform

Another of Pedro Castillo’s letters is the second agrarian reform, but this is stalled. He thus put on standby the changes in technology, irrigation and industrialization that were promised for the benefit of 2.2 million small farmers.

In the opinion of Laureano del Castillo, executive director of the Peruvian Center for Social Studies (Cepes), the main reason for the frustrated second agrarian reform is the absence of a norm that supports the measure; while Clímaco Cárdenas, president of the National Agricultural Convention (Conveagro), maintains that without a budget increase there will never be such a reform.

It is worth emphasizing that the multisectoral delegations of the National Council for Agrarian and Rural Development, and the Agrarian Development Cabinet —created in January— have not yet been installed.